zyprexa lawsuit: Eli Lilly settles in suit

January 4, 2007

Eli Lilly settling more Zyprexa suits

The drugmaker Eli Lilly and Co. said Thursday it will settle more liability

lawsuits for its anti-psychotic medication Zyprexa for less than $500 million.

The settlement covers more than 18,000 claims that the company did not

adequately warn patients taking the medication of a heightened diabetes risk.

The Indianapolis-based company did not disclose the exact dollar amount of the

new settlement.

In June 2005, Lilly settled more than 8,000 similar claims for a little less

than $700 million.

About 1,200 claims would still be outstanding after the latest round of

settlements, and the first of those could go to trial this spring.

Lilly spokeswoman Tarra Ryker said in an interview that the new settlement

covered more plaintiffs for less money as these particular cases were less

viable because a 2003 Zyprexa labeling change addressed a possible diabetes

risk.

Lilly will record a settlement charge in the fourth quarter. Analysts surveyed

by Thomson Financial expect fourth-quarter earnings per share of 82 cents.

" While we remain confident that these claims are without merit, we took this

difficult step because we believe it is in the best interest of the company, the

patients who depend on this medication, and their physicians, " Sidney Taurel,

chief executive and chairman, said in a statement.

Ryker said the company plans to go to trial and vigorously defend itself

against the 1,200 remaining claims beginning in April. Ryker said these claims

are not being settled for " various reasons. "

Zyprexa sales accounted for 28 percent of Lilly's $3.86 billion in revenue in

the most recent quarter.

In December, The New York Times reported Lilly has played down safety data on

Zyprexa. Lilly countered that the Times was using illegally obtained documents

leaked by a plaintiff lawyer and was using internal memos out of context.

Lilly shares slipped 6 cents to $52.19 in early trading Thursday on the New

York Stock Exchange. They have traded in a 52-week range of $50.19 to $59.24.

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