It's a headache no pill can cure. For Wyeth Corp. investors, the company's diet-drug woes are producing one surprise after another-and none of them positive. First, its two diet drugs, Pondimin (the fen in the diet-drug cocktail fen-phen) and Redux, were withdrawn from the market in 1997 after they were linked to valvular heart disease. Then, over the ensuing years, the cost of the problem continued to escalate-with the company taking big charges for the mess ever since. Now it looks like the final tab is likely to go higher still. A $3.75 billion settlement trust designed in 2000 to compensate those who suffered valve damage after taking the drugs is near collapse, as a flood of claims threatens to overwhelm it. In early May, the court agreed to temporarily halt payouts from the trust to people with the least serious injuries while a new deal gets worked out. Many plaintiffs' attorneys believe the odds are good that enough diet-drug users will agree to go along with a new arrangement-which in turn would drastically lower payments to some claimants. But if a new accord can't be reached, the trust would likely go bust, forcing some plain-tiffs to go after Wyeth in federal court.
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