Amgen to Pay to Settle Securities Fraud Case

Amgen Inc. has agreed to pay $17 million to settle a securities fraud lawsuit against its Synergen unit. Amgen acquired Synergen in December 1994. The suit was filed in U.S. District Court in Seattle in 1995 by a partnership that invested $52 million in the development of a drug to treat blood infections. “Only after squandering millions of dollars of the partnership’s money during clinical trial after clinical trial did Synergen finally admit that [the drug, then called] Antril provides no treatment” for blood infections, said Kim Stephens, an attorney for the partnership. Synergen executives held back news of Antril’s problems until after they’d sold more than 187,000 shares in January 1992 while Synergen’s stock hovered near $74, Stephens said. After news of the poor test results was released in February 1993, the stock fell to a low of $13.50, he said. Stephens said Amgen agreed to pay $17 million in return for investors’ dropping the class action. David Kaye, a spokesman for Thousand Oaks-based Amgen, said any alleged misconduct by Synergen officials occurred before Amgen bought the company. “What we’ve done here is pay $17 million to acquire clear ownership of” the drug, Kaye said. The company has since renamed the drug, which it is continuing to develop. Amgen stock rose $1.19 to close at $55 on Nasdaq.