AHP takes $7.5 billion charge for fen-phen
American Home Products has posted a net loss of $3.82 billion or $2.91per share for the fourth quarter of 2000, compared with a net profit of $593 million, or $0.45 per share in the like, year-earlier period. The loss was due to the firm taking a $7.5 billion charge connected with litigation over the diet drugs Pondimin (fenfluramine) and Redux (dexfenfluramine; Marketletters passim). Fourth-quarter sales were $3.51 billion, up 13.6%.
Speaking of the settlement, AHP's chief executive, John Stafford, said that "although it will cost more than we originally expected [$2.75 billion more than originally forecast], we believe it is clearly in the best interest of AHP shareholders to resolve the diet drug litigation quickly.'' He added that the group expects no further charges will be required and that the strength of its business will enable AHP to meet earnings targets despite higher interest costs.
AHP can now focus on "superb pipeline"
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