Lawsuit costs Bentley
A European lawsuit and settlement has cost Bentley Pharmaceuticals more than $10 million, the company announced Thursday.
Almost $9 million of the loss was charged in the last quarter, contributing to a net loss of $7.2 million, or 33 cents a share, the Exeter-based generic drug company said.
The legal costs spoiled a record quarterly sales report of $25.2 million, and the news that the federal Food and Drug Administration approved the company’s potentially lucrative insulin nasal spray has been approved for Phase 2 testing.
Ethypharm, based in Spain and France, had alleged that Bentley – which manufactures and sells most of its products in Europe – had illegally appropriated Ethypharm’s pellet technology. As a result Bentley agreed to a settlement of $4 million up front, and another four payments of $1 million annually. In addition, the company incurred up to $1.4 million in defense costs for the third quarter of 2006 alone.
In the first three quarters, the company, the litigation and legal expenses added up to $10.27 million, of which $8.9 million were charged to the third quarter.
The company’s third-quarter sales of $25.2 million were 7 percent higher than the sales during the same period last year, but because of increased expenses, the company’s net sales were $9.7 million below the third quarter of 2005, when Bentley made some $2.5 million. This resulted in a 44-cent-a-share downturn. – BOB SANDERS