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Bayer not liable for drug injury
CORPUS CHRISTI, Texas (Reuters) -- A jury decided on Tuesday that Bayer AG was not liable for injuries an elderly man claimed were caused by recalled cholesterol drug Baycol in the first of more than 8,000 lawsuits faced by the German company. The court victory could help Bayer's position as it tries to resolve pending cases that could cost it billions of dollars in damages. "This will put Bayer in a stronger position when they talk about settlements in the future and could make settlements quicker," said analyst Andreas Theisen of WestLB Panmure. The jury rejected claims that Bayer should pay $560 million in damages to 82-year-old Hollis Haltom, a decision that sent Bayer's stock up nearly 40 percent. Bayer warned last week that damages from Baycol cases could exceed its insurance coverage if plaintiffs prevailed, and analysts estimated the company's total liability could reach $10 billion. "We believe it is a vindication of Bayer and its position all through this litigation that it acted responsibly when developing and marketing the drug, and finally with its decision to pull Baycol from the market," said Philip Beck, Bayer's lead attorney. No negligence foundHaltom, who developed a potentially fatal muscle disorder called rhabdomyolysis after taking Baycol, claimed Bayer was negligent in the way it sold the drug. After three days of deliberating, the 12-member jury determined that Baycol's design and marketing instructions were not defective. The victory may be particularly telling for Bayer because Texas juries are considered sympathetic to plaintiffs in personal injury cases, analysts said. "The Corpus Christi jurisdiction is a plaintiff-friendly one, so it is a good case for them to win and it sets a precedent for future cases," said J.P. Morgan analyst Colin Isaac. Baycol, known as Lipobay outside the United States, was withdrawn from the market in 2001 after more than 100 deaths were linked to the drug. About six million patients took Baycol. Beck said the "vast majority" of the 8,400 cases filed against Bayer involved no adverse side effects and the company would not pay settlements to patients who suffered no injury. Bayer said it would continue to pursue its policy of trying to compensate anyone who experienced serious adverse effects from Baycol, but the company would not settle with plaintiffs they believe were not harmed by the drug. "We have a great many cases we are discussing right now in terms of settlement and I'm hopeful this will cause some plaintiffs' lawyers to reassess and to accept our invitation to negotiate settlements," Beck said. More settlements could comeBayer so far has settled with more than 500 individuals for about $150 million and is in talks to settle hundreds more. It had offered a settlement to Haltom but the patient decided to pursue the trial. Next on the horizon for Bayer is a case in Minnesota, where plaintiffs' lawyers are seeking class-action status for several thousand patients who claim they were injured by Baycol. Haltom's attorneys said they would continue to fight for people they believe were injured by Bayer's handling of Baycol. "This matter is far from over," the law firm of Mikal Watts said in a statement. Analysts said the decision bolstered Bayer's claims that it acted responsibly in its marketing of the cholesterol drug. "The verdict has got to be a big boost for Bayer, but it's just one case out of the way," said Barbara Ryan, a pharmaceuticals analyst for Deutsche Bank Securities. Ryan said many other plaintiffs would be asking "what Bayer knew and when they knew it," in terms of potential safety concerns about Baycol. Documents presented during the trial appeared to show that Bayer executives knew about the safety problems with the drug even as they extended their marketing efforts and introduced a higher dosage into the U.S. market. Attorneys for Haltom, who received double the recommended dose for someone starting on the drug, said in closing arguments Bayer put profit ahead of the safety of Baycol patients. But the jury rejected that assertion. Bayer's shares in Germany jumped 39 percent to 14.30 euros after the jury's verdict was announced. Prior to the ruling, Bayer's shares had lost two-fifths of their value since the beginning of the year on fears about the Baycol liabilities. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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