Bristol-Myers Squibb Co., New York, and Amalgamated Bank's LongView Collective Investment Fund reached a tentative settlement in a securities class action, calling for the company to pay shareholders a combined $185 million and possibly undertake corporate governance reforms by making unprecedented disclosures about drug studies.
"Not only is this ($185 million) the largest settlement dealing with drug development disclosure, but it is also precedent-setting in that BMS has agreed to publicly disclose the clinical study design and the results of clinical trials, including the reporting of adverse events, for each and every drug that is marketed in the United States or any other country," said Thomas Dubbs, the partner leading the litigation for Labaton Sucharow & Rudoff, lead counsel in the suit brought by the Longview fund, the lead plaintiff.
The settlement is also one of the 20 largest securities class-action settlements ever, Mr. Dubbs added.
"The parties have reached an agreement in principle on financial terms and are seeking to finalize non-financial aspects of a potential settlement," according to a statement from Bristol-Myers Squibb. Laura Hortas, BMS spokesman, said confirmation on the non-financial aspects of the case was unavailable. The company recorded a $185 million reserve in anticipation of the potential settlement, the statement said.
Amalgamated's Longview fund filed the suit in 1999 in U.S. District Court in Trenton, N.J. Longview claimed it lost about $2 million on BMS stock as a result of the alleged securities fraud, Mr. Dubbs said. The suit, which was scheduled to go to trial this year, accused Bristol-Myers Squibb of failing to disclose critical information to investors and consumers about Vanlev, a hypertension drug BMS was trying to bring to the market with potential sales of more than $1 billion, causing the stock price to be artificially inflated, according to the suit. Vanlev was never marketed and is no longer being actively developed, said Ms. Hortas.
Amalgamated is owned by the UNITE-HERE labor union, which has been active in securities litigation and corporate governance.
The settlement is pending court approval and a number of conditions that were not disclosed, according to a BMS statement.