Corvas International Settles Lawsuit with Shareholder Class

Corvas International Inc., a biopharmaceutical company based in San Diego, has agreed to settle a lawsuit brought against the company, its directors, and Centocor Inc. by a plaintiff on behalf of a shareholder class. The lawsuit alleged that the defendants failed to disclose certain information related to Corvas' business activities with Centocor under their strategic alliance. Corvas has denied all claims of wrongdoing and believes that the settlement is in the best interests of the company. The settlement will result in a $535,000 charge to earnings in the fourth quarter of 1994.

Key Takeaways:

Corvas International Inc. has entered into an agreement in principle to settle a lawsuit brought against the company, its directors, and Centocor Inc. by a plaintiff on behalf of a shareholder class.
The lawsuit alleged that the defendants failed to disclose certain information related to Corvas' business activities with Centocor under their strategic alliance.
Corvas has denied all claims of wrongdoing and maintains this denial as part of the settlement agreement.
The settlement will involve Corvas contributing $200,000 in cash and 125,000 newly-issued shares of Corvas common stock.
Corvas will record a $535,000 charge to earnings in the fourth quarter ended Dec. 31, 1994, to reflect the settlement.
Corvas' insurer and Centocor will contribute additional, undisclosed amounts to the settlement.
The settlement is intended to avoid further legal expense, risk, and uncertainties, as well as the unproductive use of management time.

Statistics:

$535,000: The amount of the charge to earnings in the fourth quarter ended Dec. 31, 1994, to reflect the settlement.
$200,000: The amount of cash that Corvas will contribute as its portion of the settlement.
125,000: The number of newly-issued shares of Corvas common stock that Corvas will contribute as part of the settlement.

Sources:

Corvas International Inc. press release dated Feb. 27, 1995 (Business Wire).