Newport Pharmaceuticals Inc. Reports $820,000 Loss, Lawsuit

Newport Pharmaceuticals International Inc. reported Friday a fiscal 1986 net loss of $820,000 and said it had been sued for $50 million by Alvin J. Glasky, a company co-founder and its former chairman, president and chief executive.

The company attributed part of the loss for fiscal 1986, ended April 3, to expenses incurred while gearing up for a domestic marketing campaign for its controversial drug, Isoprinosine, which Newport believes can be used as a treatment for AIDS. The campaign never materialized, however, because the Food and Drug Administration rejected Newport’s application to sell the drug in February.

Newport’s annual loss of $820,000 is in contrast to a net gain of $647,000 in fiscal 1985. Revenue was $10.1 million, down 3.6% from $10.5 million. For the fourth fiscal quarter the company posted a net loss of $443,000 versus a net income of $79,000 in the comparable period a year ago. Revenue for the quarter was $2.2 million, down 10.2% from $2.5 million.

Glasky filed the wrongful termination suit last week in response to an earlier lawsuit by Newport, in which the company claimed that he removed official documents without authorization when he cleared out his office last March.

The litigation stems from Glasky’s dismissal in March by Newport’s board of directors. Company officials say the action came because directors believed Newport needed a fresh face at the helm.

Newport initially sued Glasky, seeking the return of corporate documents he is alleged to have taken when leaving the company. The suit against Glasky also seeks punitive damages of at least $1 million, said Randy Erickson, one of Glasky’s attorneys.

Erickson said Glasky did remove some company documents but has returned them and retains only his personal files.

In response to Newport’s suit, Glasky last week filed his wrongful termination complaint, seeking $25 million each from the company and the board of directors.