Wyeth (WYE) announced that the Philadelphia Court of Common Pleas has overturned the verdict related to the hormone therapy drug, Prempro in favor of the company in the case of Jennie Nelson v. Wyeth.

The Jennie Nelson case, which was a “reverse bifurcation” phased trial, was first tried in October of 2006. Jennie Nelson of Dayton, Ohio had taken Wyeth’s hormone replacement therapy drug, Prempro for five years before being diagnosed with breast cancer in 2001.

In the first phase of the trial, in which the jury determined causation and compensatory damages, the Pennsylvania state court jury on Oct.4, found that Wyeth’s hormone replacement therapy was a cause of the plaintiff’s breast cancer and determined that the amount of compensatory damages would be $1 million for Jennie Nelson and $500,000 for her husband. The second phase, in which the jury was to determine liability and punitive damages, was scheduled to begin on Oct. 14.

Following a motion filed by Wyeth, the judge threw out the verdict of the first phase of the trial and declared a mistrial. The judge did not give a reason for declaring the mistrial. Since a mistrial was declared, the case did not proceed to the second phase and the couple did not receive any of the compensatory damages.

The retrial of Jennie Nelson case began on January 11, 2007 in the Philadelphia Court of Common Pleas. The jury on Feb.20, 2007 found Wyeth liable for failing to provide adequate warnings about breast-cancer risks of Prempro and this time, awarded Jennie Nelson $2.4 million in damages and an additional $600,000 to her husband.

Wyeth had appealed the verdict and the company’s attorneys, blamed Jennie Nelson’s cancer on other factors, including her family history.

Wyeth’s hormone replacement therapy drugs, Premarin and Prempro touted as “magic bullets” are indicated for the relief of hot flashes and night sweats, associated with menopause. After the U.S. government’s Women’s Health Initiative study found that healthy postmenopausal women enrolled in the study who were treated with the hormone replacement therapy drugs, Premarin and Prempro had increased risk of invasive breast cancer, stroke and blood clots, Wyeth came under fire. The study , which was to continue until 2005, came to an abrupt halt in early June 2002.

Wyeth won the first hormone therapy trial in September, 2006 in federal court in Little Rock, Arkansas.

Premarin has been in use since 1942 while Prempro was approved by the FDA in 1994. In late 2002, Wyeth added a boldface warning on Prempro and on Premarin. In 2003, the drugs’ label sported the FDA’s strictest black box warning.

Premarin and Prempro had combined sales of $2 billion in 2001. Following the study results, the sales of Premarin and Prempro took a beating, dropping to $1.3 billion in 2003 and $880 million in 2004. The drugs generated $910 million in 2005. However, last year, Wyeth’s hormone-replacement drugs generated sales of $1.05 billion, an increase of 16% over 2005.

WYE is currently up 1.04% or $0.60 trading at $58.10 on a volume of 3.22 million shares.

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