The Daily Caveat has posted previously about Bristol-Myers Squibb's continuing legal issues. This week saw a notable settlement in securities class action case brought against the pharmaceutical giant in relation to the never marketed hypertension drug Vanlev. Word of the settlement first appeared months ago but only recently have the exceedingly interesting details been made public.

The plaintiffs alledged in the case that BMS did not play straight with investors when reporting potential problems with BMS's long-in-the pipeline supposed high-blood-pressure uber-drug, Vanlev. While BMS had seemed willing to take this case to trial, Bruce Carton at Securities Litigation Watch called it correctly back in June'05 when he predicted that the case would settle out. The suit, brought on behalf of Amalgamated Bank settled for $185 million dollars.

Potentially severe side-effects and the drug’s ultimately ho-hum performance relative to products already on the market meant that Vanlev would never make it to the street. But according to attorneys at lead plaintiff firm Labaton Sucharow, that didn’t stop BMS from coasting for a few quarters on the good word of mouth Vanlev had been getting. Their complaint alledged that BMS withheld negative findings in early 2000, prior to the announcement that the drug was DOA.

Now what makes this case and the terms of this settlement more intriguing than your usual run of the mill securities investigation is the product involved. Bristol-Myers Squibb doesn’t make some obscure techno-widget that fits inside your computer, toaster or flat-screened television - they manufacture the drugs that are designed to make and keep us all well. Thus, not half so interesting as the high dollar figure are the other mandates of the settlement, to which BMS will be bound for the next decade.

Along with the close-to $200 million dollar figure involved in the settlement, the court has mandated a variety of new procedures for BMS's drug development and disclosure process that go beyond simply censuring overzealous execs. While you won't find hide nor hair of any mention of a legal settlement on BMS's website, what you will now find is a publicly accessible database for their clinical trial disclosures, warts and all which will include any and all drugs approved for marketing to the public.

BMS is bound to the terms of this agreement for ten years and, get this, any change that could potentially reduce the level of disclosure must be approved by the former lead plaintiffs in the case, Amalgamated Bank. Again, not that you will find mention of this on BMS's website. They do tout their Clinical Trial Communication Commitment they just don't happen to mention that their "commitment" was apparently court-mandated.

View the Labaton press release on Vanlev settlement terms.

-- MDT

Labels: database