Amgen Settles Fraud Case For $82 Million

Amgen, the largest biotechnology company in the USA, has agreed to payan investment group more than $17 million to settle a lawsuit against Synergen, one of its subsidiaries. The suit, filed by Kim Stephens representing Tousley Brain PLLC, alleged that Synergen committed securities fraud by not revealing negative test data involving Antril (anakinra) to treat sepsis. Should Antril ever be marketed, the settlement could be worth as much as $82 million.

Mr Stephens argued that Antril's Phase II results were misrepresented to investors and media in November 1991, in that chief executive Jon Saxe said the drug would win Food and Drug Administration approval and be on the market mid-1994. In January 1992, however, nine of Synergen's senior executives, including Mr Saxe, sold over 187,000 shares for $12 million within days of one another, a surprise as they were prepared to "forego the future profits they were telling the public Synergen would make," said Mr Stephens.

Mark Johnson, a partnership investor and named plaintiff in the lawsuit, said: "if Antril's efficacy was proven to be flawed, then Synergen should have terminated the project." He went on to express his disgust that the company "squandered millions of dollars and years of work." In total, Synergen raised approximately $500 million from investors, including a $225 million offering in December 1991.