BYU now $450 million richer?

[Sullyute]

It look like BYU will be coming into a good chunk of money:

Pharmaceutical giant Pfizer and Brigham Young University have settled a multibillon-dollar lawsuit involving the drug Celebrex.

Terms of the agreement, apparently reached in talks over the weekend in San Francisco, were not disclosed.

But a footnote in Pfizer's quarterly financial report released Tuesday refers to a "$450 million charge in connection with an agreement-in-principle to settle a lawsuit by Brigham Young University related to Celebrex

It could have been more:

Celebrex sales have topped $35 billion since going on the market in 1999. BYU contended it deserved "reasonable royalties" of 15 percent or $9.7 billion. The figure could have stretched to more than $100 billion if BYU had also sought compensation for punitive damages, profit margin, interest and future sales.

[falafel]

$450M seems pretty low for what BYU was asking. I wonder if that is just an initial payment on a larger settlement.

[Indy Coug]

That should be enough to buy off Slim Pickens.

[Jeff Lebowski]

BYU prof Dan Simmons is going to be incredibly rich. He will have claim to 45% of the proceeds if they follow the standard tech transfer policy.

[Moliere]

I no longer feel bad for sending my annual BYU donation to the Romney campaign. BYU will be just fine without my money for one year.

[Viking]

BYU prof Dan Simmons is going to be incredibly rich. He will have claim to 45% of the proceeds if they follow the standard tech transfer policy.

It's great for him.

[TripletDaddy]

This is disturbing news. Why was BYU sponsoring research?

[Jeff Lebowski]

This is disturbing news. Why was BYU sponsoring research?

No kidding. They need to send a formal apology to Utah State ASAP! A few more cases like this and USU will be nothing more than a community college. It is a zero sum game, you know.

[old_gregg]

It look like BYU will be coming into a good chunk of money:


It could have been more:

$450M seems pretty low for what BYU was asking. I wonder if that is just an initial payment on a larger settlement.

i'm curious about why they wouldn't seek punitive and other damages?

[Indy Coug]

i'm curious about why they wouldn't seek punitive and other damages?

They used the same attorneys that reviewed the MTN contract.

[Eddie]

i'm curious about why they wouldn't seek punitive and other damages?

I suspect that $450 mil was just the beginning. A down payment. I would assume that there would be some residual as sales of the drug continues.

I would guess that the "agreement in principle" says that there will be this chunk up front - and that there will be additional payments as well. It will be interesting to see if any totals ever come out.

[Jacob]

I suspect that $450 mil was just the beginning. A down payment. I would assume that there would be some residual as sales of the drug continues.

I would guess that the "agreement in principle" says that there will be this chunk up front - and that there will be additional payments as well. It will be interesting to see if any totals ever come out.

Any expert here can correct me, but as Pfizer is a public company, they must disclose all material contracts in their SEC reports, which is how we saw this $450m number. If the real amount of the settlement is in the billions, it will show up in future reports, but I would have thought that if they've already entered into an agreement for a much larger amount, they would have had to disclose it. I think they will have to disclose the final agreement within 4 or 8 days of when they sign the agreement. Anyway, the amount of the settlement is not something Pfizer can keep secret from its shareholders i.e. the public.

[Katy Lied]

May 01, 2012 06:59 AM Eastern Daylight Time
Pfizer Inc. Issues Statement Regarding Pending Court Case



NEW YORK--(BUSINESS WIRE)--Pfizer Inc. today issued the following statement regarding a pending court case in Utah:
"The parties to Brigham Young University and Dr. Daniel Simmons v. Pfizer Inc. et al., a matter in the United States Court for the District of Utah, Central Division, announce that they have reached an amicable settlement on confidential terms. As part of the resolution, BYU will establish the Dan Simmons Chair in recognition of Dr. Simmons' lifelong work and contributions towards advancing human health in a number of important areas including oncology, pain and Alzheimer's.
“We are pleased to resolve this matter and the uncertainty of litigation and to be in a position to support Dr. Simmons' research efforts at BYU."



Contacts

Pfizer Inc.
Media Contact:
Chris Loder, 212-733-7897
or
Investor Contact:
Suzanne Harnett, 212-733-8009

here's the small print on their first qtr report:

3. Other Deductions – Net
($ in millions)
First-Quarter
(b)

In 2012, primarily relates to a $450 million charge in connection with an agreement-in-principle to settle a lawsuit by Brigham Young University related to Celebrex and charges for hormone-replacement therapy litigation. In 2011, primarily relates to charges for hormone-replacement therapy litigation.

[Moliere]

Any expert here can correct me, but as Pfizer is a public company, they must disclose all material contracts in their SEC reports, which is how we saw this $450m number. If the real amount of the settlement is in the billions, it will show up in future reports, but I would have thought that if they've already entered into an agreement for a much larger amount, they would have had to disclose it. I think they will have to disclose the final agreement within 4 or 8 days of when they sign the agreement. Anyway, the amount of the settlement is not something Pfizer can keep secret from its shareholders i.e. the public.

Yes, they have to disclose it. It's a FAS 5 contingency and under accounting rules they have to recognize the full payment now, not just the initial payment....unless the initial payment represents the amounts paid up through today and the billions are to come later as sales are made. Then Pfizer would just recognize a liability to BYU as sales are made and that liability would be paid down as periodic payments are made to BYU.

[Donuthole]

Yes, they have to disclose it. It's a FAS 5 contingency and under accounting rules they have to recognize the full payment now, not just the initial payment....unless the initial payment represents the amounts paid up through today and the billions are to come later as sales are made. Then Pfizer would just recognize a liability to BYU as sales are made and that liability would be paid down as periodic payments are made to BYU.

Yikes. Leave it to the accountant to turn up the boring meter in an already-pretty-boring thread.