Bayer’s Baycol Cases Could Reach 15,000 - Reuter’s English News Service - January 28, 2003

Bayer’s Baycol Cases Could Reach 15,000
Reuter’s English News Service
January 28, 2003

FRANKFURT, Jan 29 (Reuters) The number of court cases against Germanys Ba;yer AG over its recalled cholesterol drug Baycol could touch 15,000, HSBC said in a research not on Tuesday, quoting a lawyer for the plaintiffs.

HSBC said attorney Kenneth Moll told a conference call it had organized last Friday that Bayer was paying his clients up to $1.25 million each in out-of-court settlements of cases involving death.

Moll characterized the payment as very fair,HSBC said in the note, reiterating its buy rating on the stock.

A Bayer spokesman reached by Reuters said he had no comment on the note.

Bayer withdrew Baycol, sold under the name Lipobay outside the United States, in August 2001 after it was linked with more than 50 deaths worldwide. The number of deaths linked to the drug has since risen to more than 100.

The note said Moll saw Bayer trying to resolve cases before the first trial set for February 17 in Texas, and quoted him saying he saw no reason why any of his clients should not settle out of court.

He estimated that some 400 cases had been settled at an average of $250,000-$300,000 per case, with the total litigation cost working out at $120 million so far, HSBC said.

HSBC said it was more positive with regard to the maximum cost of Baycol litigation to Bayer, and that it continued to believe the worst-case cost to Bayer would be $1.6 billion.

Bayer said earlier this month the number of damage suits it faced from the costly recall of Baycol in 2001 had risen to 7,400 from 5,700. It said it had settled 400 cases out of court, up from its last count of 190.

Bayer has said in the past it has made no special provisions for Baycol as it had taken insurance for such possible cases.

Bayer shares were up 1.8 per cent at 16.78 euros while the blue-chip DAX index was up 1.9 per cent at 0938 GMT.