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24 janvier, 2007 14:28
Cell Therapeutics will pay $10.5 million to settle federal investigation
By Seattle Times staff
Cell Therapeutics said Tuesday it has reached an oral agreement with the U.S. Attorney's Office to pay $10.5 million to end the government's investigation of company practices in marketing the cancer drug Trisenox.
The preliminary agreement doesn't end the lawsuit that prompted the two-and-half-year federal investigation, the Seattle biotechnology company said in a filing with the Securities and Exchange Commission. The lawsuit was filed under seal by an unidentified person who is apparently a former employee.
"The corporation would not make any admission of wrongdoing as part of this settlement," and would get "a release of all government claims" in the case, Cell Therapeutics said.
Trisenox is the only product Cell Therapeutics has brought to market. It was sold to Cephalon in July 2005 for $71.9 million so Cell Therapeutics could finance other drug-development efforts.
In August 2004, the company disclosed in SEC filings that the U.S. Attorney's Office was investigating whether the company had improperly marketed the drug for unapproved uses. It said investigators were examining Cell Therapeutics' promotion practices, revenue reporting and statements made by company representatives and consultants regarding Medicare reimbursement for off-label uses of Trisenox.
While Cell Therapeutics owned Trisenox, it was prescribed by doctors "largely for uses not approved by the FDA," the company said. Doctors can and frequently do write prescriptions for so-called off-label uses, but it's against the law for drug companies to promote off-label prescribing.
Cell Therapeutics also said Tuesday it has filed a lawsuit in King County Superior Court against the companies that advised it on seeking Medicare reimbursement for Trisenox.
The identity of the person who filed the sealed lawsuit has not been disclosed, but evidently is is a former employee — Cell Therapeutics said the suit includes wrongful termination claims.
Trading in Cell Therapeutics closed today at $1.74, up 2 cents from its opening price.
