Pfizer details new costs to settle some litigation
Drug giant Pfizer Inc. recorded charges totaling $472 million as it reached agreements to settle about one-third of the lawsuits it faces over whether hormone replacement drugs made by its Wyeth subsidiary caused breast cancer or other harm to women.
In a regulatory filing late Thursday, Pfizer said it took a $172 million charge in the first quarter to cover those agreements, plus verdicts in lawsuits it has lost. Pfizer also recorded a $300 million charge in the quarter for "the minimum expected costs to resolve all of the other outstanding hormone-replacement therapy actions against Pfizer and its affiliated companies."
Pfizer said that if those estimates are inaccurate, additional charges might be required. The company noted it had previously recorded a total of $300 million in charges for settlements and verdicts in earlier quarters.
The figures were disclosed in Pfizer's regular quarterly filing with the Securities and Exchange Commission.
Wyeth, a drugmaker that Pfizer bought in October 2009, had been hit by thousands of lawsuits over its hormone replacement pills, Premarin and Prempro, after widely publicized research indicated that such medicines increased risk of breast cancer and other diseases.
The SEC filing also noted that:
—Pfizer in March reached a settlement with about 40,000 claimants in the bankruptcy proceeding of its Quigley Co. subsidiary. Until the early 1970s, Quigley sold products containing asbestos such as linings for furnaces and incinerators. The settlement provides for payments to claimants of $500 million and then $300 million, plus $17 million in legal fees. Pfizer said it expects to contribute more than $550 million more to a trust to be set up to cover any future claims of asbestos-related injury from exposure to Quigley products.
—It spent $1.15 billion in the first quarter on charges related to the Wyeth acquisition and its recent purchase of pain drug maker King Pharmaceuticals. That included $667 million for employee termination costs, $243 million for depreciation and restructuring of research and other assets, and $179 million for integration costs such as consulting and systems integration.