Shareholders of Synergen Inc., now owned by Amgen Inc., willreceive $28 million in a settlement of their class action lawsuitaccusing Synergen of withholding information about Antril prior tothe drug's failure in sepsis trials in 1993.
Amgen's spokesman David Kaye said Wednesday the payment was acombination of Amgen cash and Synergen insurance, but he wouldnot detail the amount of each portion. Amgen, of Thousand Oaks,Calif., is biotechnology's biggest company with 1994 revenuestotaling $1.65 billion. The firm also reported it had about $700million in cash at the end of last year.
The shareholders' lawsuit was filed against Synergen in late February1993 following the company's release of Phase III trial data showingAntril failed in the treatment of sepsis. The Boulder, Colo.company's stock dropped 68 percent, from $42.13 to $13.50.
The class action lawsuit covered shareholders who bought and lostmoney on Synergen between November 1991 and February 1993.More than 5,200 people purchased shares during that time, but not allof them were losers. Those who did lose money accused Synergen ofmisleading investors about Antril.
A federal judge in Denver approved the settlement Tuesday. Leadattorneys for the plaintiffs said stockholders who were damaged willget $21 million while the 23 law firms involved in the case will share$7 million.
Following the February 1993 failure, Synergen continued with itsdevelopment of Antril for sepsis until July 1994 when another PhaseIII trial ended in disappointment. The company's stock dropped 50percent to $4.50. Synergen discontinued development of the drug,scaled back its operations and personnel and began looking for abuyer.
Amgen stepped in and purchased the company in November 1994 for$262 million. Among the conditions of the acquisition was thesettlement of the shareholder lawsuit. Attorneys for the plaintiffs saidthe settlement negotiations began several months prior to theannouncement that Amgen was purchasing Synergen.
-- Charles Craig
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