AstraZeneca Faces 10,000 Lawsiuits Over Seroquel Drug

(February 13, 2007) -- AstraZeneca Plc, the U.K.'s second- largest drugmaker, has been sued by almost 10,000 people in the U.S. over claimed injuries from defects in the company's antipsychotic drug Seroquel, according to a court filing.

Patients claim in their complaints that AstraZeneca didn't adequately warn of possible side effects, including severe weight gain and risk of diabetes. Many of the suits contend the London- based company and its affiliates promoted the drug for unapproved uses, contrary to U.S. Food and Drug Administration regulations.

The lawsuits are similar to claims filed over injuries from the antipsychotic drug Zyprexa against Eli Lilly & Co., which has settled more than 28,000 cases for as much as $1.2 billion. The Lilly settlements may have set off many of the Seroquel lawsuits, said law professor Howard Erichson.

``The fact that Zyprexa litigation resulted in a massive settlement has to draw the attention of plaintiffs' lawyers and plaintiffs themselves,'' said Erichson, a professor at Seton Hall Law School in Newark, New Jersey. ``Mass torts litigation will develop over a particular product and then develop over similar products.''

AstraZeneca said in a preliminary annual report filed Feb. 1 that it knew of about 1,200 lawsuits containing the claims of about 8,000 plaintiffs. The company ``has not determined how many additional cases, if any, may have been filed,'' AstraZeneca said in the filing. The company said in May it faced 232 Seroquel suits, including those with multiple claims.

Seroquel Sales

Seroquel's worldwide sales increased 24 percent in 2006 to $3.4 billion, up from $2.75 billion in 2005. Seroquel, AstraZeneca's second-largest selling product behind the ulcer treatment Nexium, had become the 16th best-selling drug in the world by the third quarter of 2006, according to data compiled by Bloomberg.

There are no defects in Seroquel, and AstraZeneca doesn't intend to settle the suits, company spokesman Jim Minnick said.

``We are vigorously defending them all,'' he said in an interview. ``We believe Seroquel is safe and effective.''

AstraZeneca may settle even though it believes the cases have no merit, said analyst Max Herrmann of ING Financial Markets in London. ``You'd rather not settle, but it's not the biggest issue they're facing.''

Those suing are seeking actual and punitive damages and disgorgement of profits from the drug, their complaints said.

The patients suing haven't provided evidence of injuries, Minnick said. ``In most cases, there is little or no factual information regarding the alleged injury,'' he said.

A settlement of as much as $500 million wouldn't harm AstraZeneca financially, because it would be ``a one-off charge,'' Herrmann said.

A New Drug

Seroquel, approved for use for schizophrenia and bipolar disorder, is part of a class of newer antipsychotic drugs including Zyprexa and Johnson & Johnson's Risperdal. Seroquel passed Zyprexa last year as the top-selling atypical antipsychotic, Minnick said.

AstraZeneca has been sued by 9,956 individuals in U.S. courts over Seroquel, according to a Feb. 5 filing in federal court Orlando, Florida, where the lawsuits have been consolidated in a multidistrict litigation for evidence-gathering and pre- trial hearings.

This includes claims by 7,171 plaintiffs in federal courts, primarily. The claims are made in about 1,500 lawsuits, many of which have multiple plaintiffs.

The suits claim that AstraZeneca knew the risks of Seroquel and didn't warn patients in the U.S. ``until they were finally forced to do so by the FDA,'' according to a complaint filed in federal court in Massachusetts, on behalf of 997 plaintiffs.

`Aggressive Marketing'

The growth in sales of the drug, from $66 million in 1998 to $2.75 billion in 2005, was spurred by ``AstraZeneca's aggressive marketing of Seroquel,'' according to these patients, whose cases have been transferred to federal court in Orlando.

The marketing ``consisted chiefly of overstating the drug's uses and benefits (including massive off-label promotion), while understating and consciously concealing its life-threatening side effects,'' their complaint said.

Lawyers representing Seroquel users have agreed to limit the claims filed to people who said they developed serious health problems after taking the drug, said attorney Paul Pennock, lead plaintiffs' counsel in the multi-district litigation.

``Everybody involved took a blood oath that we were only going to pursue cases where there was a real injury, like pancreatitis, diabetes or severe exacerbation of existing diabetes,'' said Pennock of Weitz & Luxenberg in New York. ``This was as opposed to the Zyprexa litigation where a lot of people took on all comers,'' he said.

Pennock represents more than 1,700 plaintiffs, about 67 percent of whom were prescribed the medication for off-label uses, including insomnia, depression, anxiety, post-traumatic stress disorder and Alzheimer's, he said.

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Astrazeneca American depositary receipts, each representing one share, rose 14 cents to $56.93. Earlier, shares of the company rose 11 pence to 2,932 pence in London.

The federal lawsuits against AstraZeneca are consolidated as In re Seroquel Products Liability Litigation, MDL-1769, U.S. District Court, Middle District of Florida (Orlando).

Source: Bloomberg

Last updated: 02/07

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