TWO BMS EXECUTIVES OUSTED IN WAKE OF FAILED PLAVIX DEAL
Repercussions from the failed Plavix settlement continue at Bristol-Myers Squibb (BMS), with the apparently forced departure of CEO Peter Dolan and Senior Vice President and General Counsel Richard Willard on the recommendation of a federal monitor.
The shake-up follows the collapse of a patent settlement between BMS, sanofi-aventis and Apotex over rights to blockbuster blood thinner Plavix, which BMS markets in the U.S. for sanofi-aventis. Apotex launched its generic version of the drug right after the deal fell apart following rejection by states' attorneys and the Department of Justice.
At the meeting held by BMS' board of directors to discuss the ongoing litigation with Apotex, independent monitor Frederick Lacey, a former federal judge, recommended terminating the two executives, BMS said in a statement. The company did not specify why Lacey suggested that the company should fire Dolan and Willard.
Lacey was retained by BMS to ensure it complies with the terms of an agreement forged to resolve fraud charges filed in the U.S. District Court for the District of New Jersey by the SEC, which claimed BMS executives improperly reported $1.5 billion in revenues to mislead investors about the company's performance. As a result, BMS in March 2003 restated its earnings for 2000 and 2001, causing investors to lose millions of dollars. The U.S. attorney for the District of New Jersey agreed to defer prosecuting BMS as long as the company complies with the terms of the agreement, which remains in effect until June 2007. If BMS observes the terms, the U.S. attorney will dismiss the suit with prejudice.
Lacey's recommendation followed an inquiry by him and the U.S. attorney into issues related to corporate governance in connection with the negotiation of the Plavix settlement, BMS said, adding that neither Lacey nor the U.S. attorney said that there had been any violation of the agreement by either the company or any of its employees.