Gensia Inc. and its research and development spin-off, Aramed Inc.,Friday settled class action shareholders' lawsuits spurred by failure ofa former lead product, Protara, which was being developed to preventheart attacks during bypass surgery.
Under terms of the settlement, the plaintiffs will split $4 millionworth of Gensia common stock and $13 million in cash, which willbe paid by the company's insurance carriers. Neither Gensia's norAramed's cash position will be affected.
The settlement ends lawsuits brought in 1992 and 1994 concerningProtara, which until November 1993 was called Arasine. Theplaintiffs include people who purchased Gensia or Aramed sharesbetween Feb. 27, 1992, and Oct. 17, 1994.
Aramed was formed by Gensia to support funding of the company'sadenosine regulating agent (ARA) technology, which was used todevelop Protara.
On Feb. 27, 1992, Gensia reported positive Phase II results of Protarathat sent its stock up to $62 a share. By September 1992, the stockhad dropped to $22 on results of a failed Phase III international trial.After data from a subsequent Phase III U.S. study demonstrated nostatistical significance, Gensia stopped work on the drug. Thoseresults were reported Oct. 17, 1994, sending Gensia's stockplummeting to $5.06 and Aramed's to $11.
A spokeswoman for Gensia said the price of the shares to be paid tostockholders under the settlement of the lawsuits won't be determineduntil the time they are distributed. Gensia has about 32 million sharesoutstanding while Aramed has 2.9 million shares.
Gensia's stock (NASDAQ:GNSA) closed Friday at $2.87, down 12cents and Aramed (NASDAQ:ARAM) was at $10, unchanged._Charles Craig
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