BAYRY Bayer Aktiengesellschaft (PK)

By Sara Randazzo 

Bayer AG and Johnson & Johnson have agreed to pay $775 million to resolve claims that the blood thinner Xarelto causes excessive bleeding, according to the companies.

The deal, reached with plaintiffs attorneys, will resolve 25,000 claims and is structured to limit liability going forward.

The two companies, which jointly developed the drug and will evenly split the settlement cost, have won all six Xarelto cases that have gone to trial so far.

Xarelto is Bayer's top-selling drug and remains on the market. The companies aren't admitting liability as part of the deal, which allows them to pull out if not enough eligible plaintiffs sign onto it.

Bayer said Monday the settlement "allows the company to avoid the distraction and significant cost of continued litigation" and that it remains committed to the more than 45 million patients world-wide who have been prescribed Xarelto.

Johnson & Johnson said "We believe this is the right thing to do for patients and their doctors" and that they stand by the safety of the drug.

Andy Birchfield, a lawyer at Beasley Allen who represents the plaintiffs, said the elderly plaintiff population and a warning-label change in 2015 that restricts future claims made now the right time to settle. "This is really difficult and challenging litigation," he said. "I think this provides fair compensation to the claimants here."

The settlement resolves a legal headache for Bayer and Johnson & Johnson, but several more remain for both companies.

Bayer is fighting claims that its popular weedkiller Roundup causes non-Hodgkin lymphoma and other cancers; uncertainty over the litigation and two adverse jury verdicts have depressed the company's stock price. Other lawsuits challenge the safety of two Bayer birth-control drugs.

Johnson & Johnson faces lawsuits claiming its talcum-based baby powder causes cancer as well as claims over hip implants, pelvic mesh and diabetes medication.

Plaintiffs' lawyers have flooded the airwaves in recent years with television advertisements warning about the risks of Xarelto. Approved in 2011, Xarelto belongs to a new generation of blood thinners aiming to better balance keeping blood thin enough to avoid clotting but sufficiently thick to prevent bleeding episodes.

The lawsuits, which have accumulated mostly over the past five or so years, claim the drugmakers played down Xarelto's risks, resulting in injuries including internal bleeding, stroke and death.

In light of the agreement, U.S. District Judge Eldon Fallon in New Orleans on Monday halted litigation in his courtroom that had consolidated thousands of Xarelto lawsuits filed in federal court. The judge put in place extra burdens for anyone looking to pursue claims outside the settlement process, including submitting a report from a licensed physician supporting claims that injuries were caused by Xarelto. Mr. Birchfield said he didn't expect many new claims to be filed.

Under the settlement, payments will be substantially less for anyone who was prescribed the drug after Dec. 1, 2015, when its warning label changed, or for those whose first alleged injury came after March 1, 2016. Payments are also capped for anyone hospitalized for two or fewer consecutive days.

Xarelto has been a large revenue generator for Bayer, which is looking to develop new drugs as the patents on Xarelto and other top drugs are set to expire in coming years.

Write to Sara Randazzo at sara.randazzo@wsj.com

(END) Dow Jones Newswires

March 25, 2019 13:26 ET (17:26 GMT)

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