Wyeth says fen-phen cases may be "wrapped up" soon
February 09, 2006The chief financial officer of Wyeth on Thursday said he was hopeful tens of thousands of remaining product-liability lawsuits involving the company's recalled "fen-phen" diet drugs may be "wrapped up" within the next 12 to 24 months.
Kenneth Martin made the comments at an annual Merrill Lynch health-care conference being held in New York.
Wyeth has taken combined charges of more than $21 billion since Pondimin and Redux were recalled in 1997, to cover liabilities to 6 million Americans who had taken the appetite suppressants. Industry analysts have fretted that Wyeth may need to take additional charges to settle still-unresolved lawsuits filed by plaintiffs who claim the drugs left them with heart-valve damage.
The Madison, New Jersey-based company has $5.7 billion in remaining fen-phen reserves. "Our expectation is that 80 percent of that could be paid out in the next 12 to 24 months," Martin said.
Martin said the company had recently reached settlements or tentative settlements with 30,000 former fen-phen users and was attempting to reach deals with a handful of law firms that represent another 25,000 plaintiffs.
Natexis Bleichroeder analyst Jon LeCroy said he is doubtful the concluding chapter in fen-phen's costly history will arrive so quickly, despite Martin's optimistic comments.
LeCroy said Wyeth may indeed eliminate "the bulk" of remaining fen-phen cases within the next 24 months.
But he predicted it will take Wyeth at least four more years to eliminate cases involving serious heart-valve damage and others involving perhaps 200 fen-phen users who developed a highly fatal lung condition called primary pulmonary hypertension.
"So we are assuming Wyeth will need to take another $4 billion in fen-phen charges through 2010," LeCroy said.
Wyeth's Martin could not immediately be reached for further comment.
Shares of Wyeth were up 64 cents, or 1.4 percent, to $46.17, in midday trading on the New York Stock Exchange.
