Exhibit 99.1
FOR IMMEDIATE RELEASE
Media Contacts: Investor Contact:
Lowell Weiner Thomas Cavanagh
American Home Products American Home Products
(973) 660-5013 (973) 660-5706
Douglas Petkus
Wyeth-Ayerst Laboratories
(973) 660-5034
AMERICAN HOME PRODUCTS ANNOUNCES
DIET DRUG SETTLEMENT PLAN
Madison, N.J., October 7, 1999 -- American Home Products Corporation (NYSE: AHP)
today announced a comprehensive, national settlement to resolve litigation
against the Company brought by people who used Redux-TM- (dexfenfluramine) or
Pondimin-Registered TradeMark- (fenfluramine).
This nationwide, class action settlement is open to all Redux or Pondimin users
in the U.S., regardless of whether they have lawsuits pending. It offers a range
of benefits depending on
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a participant's particular circumstances, including:
- a refund program for the cost of the drugs;
- medical screening;
- additional medical services or cash payments; and
- substantial compensation in the event of serious heart valve problems.
Additional details are provided in the attached summary.
"This settlement provides fair and equitable terms for both diet drug claimants
and American Home Products," said John R. Stafford, Chairman, President and
Chief Executive Officer. The agreement was developed by attorneys for the
Company and by plaintiffs' attorneys involved in various federal and state
cases.
"Settling this matter was in the best interest of those who used Pondimin or
Redux as well as of the company," said Mr. Stafford. "We believe that this
agreement is a sound way to resolve the claims raised by diet drug users and
represents a prudent course for our company. It offers peace of mind to those
who used the drugs and permits the company to move beyond the uncertainty and
distractions of litigation."
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"We agreed to this settlement so that we can focus on the business of making
innovative pharmaceutical products. Today, we have in our research pipeline
products to help solve some of the world's most pressing health problems and
this settlement allows us to pursue and expand that effort," said Mr. Stafford.
"In designing the agreement with the plaintiffs' attorneys, we wanted to ensure
that the benefits are attractive to the claimants and provide a strong incentive
for participation," said Louis L. Hoynes, Jr., Senior Vice President and General
Counsel for American Home Products. "We are confident that well-informed
claimants will conclude that the range of benefits of this settlement is
preferable to lengthy and uncertain litigation. The scientific studies conducted
to date and clinical experience indicate that the health of the overwhelming
majority of people who took Redux or Pondimin has not been adversely affected.
The studies also show no increased risk of valvular heart disease among persons
who took the drugs for three months or less - more than 75% of those who took
the drugs. Yet this settlement provides a quality package of benefits for all
individuals who used the drugs and financial protection in the event a person
should develop serious heart valve disease."
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The settlement agreement is subject to judicial approval. A judicially-approved
notice program will provide potential participants with details regarding the
settlement procedures. This will be followed by hearings to obtain judicial
approval of the settlement.
Initial payments by American Home Products into the settlement funds are
anticipated to begin later this year. Payments will continue for approximately
16 years after final judicial approval if needed to provide settlement benefits
to members of the class. Payments to be made during the next two years are
anticipated to total $1.85 billion. In the aggregate, all payments under the
settlement cannot exceed $3.75 billion in present value. Future payments will be
made only as and if needed, and are subject to annual maximum amounts. In
addition, American Home Products will receive credits for future payments to
persons who opt out of the settlement under certain circumstances.
The Company will record a charge of $4.75 billion pretax ($3.29 billion after
tax, equal to $2.51 per share) to provide for expected payments to the
settlement funds, other judgments and settlements, and legal costs.
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The charge, which is net of available insurance, will be reflected in the 1999
third quarter financial results.
Redux and Pondimin were indicated for the treatment of obesity as part of a
broader weight management program, including diet and exercise. On September 15,
1997, Wyeth-Ayerst Laboratories, the pharmaceutical division of American Home
Products, voluntarily withdrew Redux and Pondimin from the market after the FDA
presented to the Company new and preliminary information about possible heart
valve abnormalities in some patients using these products.
More recent well-controlled clinical trials -- many of which have already been
published in peer-reviewed journals and presented at major medical meetings ---
indicate that serious heart valve disease among former diet drug users is rare
and the actual prevalence of heart valve regurgitation is far lower than was
suggested at the time of the products' withdrawal. These findings are consistent
with the clinical experience of cardiologists.
A toll-free telephone number (1-800-386-2070) has been established to provide
information on the settlement.
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Wyeth-Ayerst Laboratories is a major research-oriented pharmaceutical company
with leading products in the areas of women's health care, cardiovascular
disease therapies, central nervous system drugs, anti-inflammatory agents,
vaccines and generic pharmaceuticals. American Home Products is one of the
world's largest research-based pharmaceutical and health care products
companies. It is a leader in the discovery, development, manufacturing and
marketing of prescription drugs and over-the-counter medications. It is also a
global leader in vaccines, biotechnology, agricultural products and animal
health care.
The statements in this press release that are not historical facts are
forward-looking statements that involve risks and uncertainties including,
without limitation, court approval of the settlement agreement, the outcome of
any appeals, and the extent to which opt out rights are exercised, and other
risks and uncertainties, including those detailed from time to time in AHP's
periodic reports, including quarterly reports on Form 10-Q and the annual report
on Form 10-K, filed with the Securities and Exchange Commission. Actual results
may differ from forward-looking statements.
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