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Bayer Is Cleared in Baycol Suit

The firm is not liable for injuring an 82-year-old man who used its drug. Victory strengthens its position in 8,000 cases.

March 19, 2003|From Reuters

A jury decided Tuesday that Bayer was not liable for injuries that an elderly man claimed were caused by recalled cholesterol drug Baycol in the first of more than 8,000 lawsuits filed against the German company.

The victory in a Corpus Christi, Texas, court 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," 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%. 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.

Haltom, 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," J.P. Morgan analyst Colin Isaac said.

Baycol was withdrawn from the market in 2001 after more than 100 deaths were linked to the drug. About 6 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 those who experienced serious adverse effects from Baycol.

"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.

Bayer 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, who decided to pursue the trial.

Next on the horizon for Bayer is a Minnesota case in which plaintiffs' lawyers are seeking class-action status for several thousand patients who say Baycol injured them.

Shares of Bayer rose $4.16 to $15.40 on the New York Stock Exchange.

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