Bristol-Myers agrees to settle shareholder suits

April 27, 2005

NEW YORK (Reuters)—Bristol-Myers Squibb Co. on Wednesday said it reached an agreement to settle shareholder lawsuits related to an accounting scandal and accusations that the company had misled investors about the safety of an experimental drug.

Bristol-Myers said that under the agreement to settle federal derivative lawsuits, it would adopt "certain governance enhancements," including the election of all directors to one-year terms instead of staggered terms. The settlement covers six lawsuits that had been consolidated into a single suit. Bristol-Myers continues to face a number of other shareholder lawsuits and two government investigations, a spokesman said. A federal court has given preliminary approval to the settlement.

The New York-based drugmaker, which previously admitted it boosted earnings over a three-year period by inflating revenue by $2.5 billion, said a final settlement hearing is scheduled for May 13 before Judge Loretta Preska of the U.S. District Court for the Southern District of New York.

The suits also accused the company of misleading investors about the safety of its experimental blood-pressure drug Vanlev, whose development was stopped after safety problems emerged, and by Bristol's investment in biotechnology company ImClone Systems Inc., whose former chief executive was later jailed in an insider-trading scandal. The suits also accused the company of trying to thwart generic competition for drugs to treat anxiety and cancer.

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