Allergan wins new trial in big Botox damages case

(Reuters) - Allergan Inc has been granted a new trial in a case brought by a man who won a $212 million jury verdict last year after claiming he was disabled by taking Botox injections.

Douglas Ray Jr’s jury award had already been slashed to less than $13 million total under Virginia state law, and now, after a federal judge’s ruling on Friday, he will have to make his case all over again.

Ray accused Allergan of failing to warn doctors of the risk that Botox injections could cause autoimmune reactions that lead to brain damage. Ray alleged that he suffered a severe reaction that left him completely disabled after receiving Botox injections to treat a movement disorder in his right hand -- an off-label-use for the wrinkle-smoothing drug.

In April of last year, jurors in U.S. District Court in Richmond, Virginia, awarded Ray $12 million in compensatory damages, along with $200 million in punitive damages that were later reduced to $350,000 due to a cap under Virginia law.

But Judge Robert Payne ruled Friday that Allergan deserved a new trial because it should have been made clear to the jury that the company could not add a so-called “black-box” warning to Botox packing inserts on health dangers without prior approval from the U.S. Food and Drug Administration.

“This was prejudice on a core issue respecting Allergan’s liability, and the only remedy for it is a new trial,” Payne wrote.

Ray’s lawsuit, filed in 2010, was one of at least four that have gone to trial as Botox users sued Allergan for personal injuries, or in one case, a wrongful death. Several of the lawsuits focus on off-label uses of the drug.

Allergan agreed in September 2010 to plead guilty and pay $600 million to resolve a federal investigation into its off-label promotion of Botox. The Justice Department accused Allergan of illegally promoting the drug to treat headaches, pain, spasticity and juvenile cerebral palsy -- uses that had not been approved by the FDA.

Ray Chester, a lawyer for Ray, said he was “disappointed in the decision, obviously.”

“We thought it was a good verdict and should have stood,” said Chester, of the law firm McGinnis Lochridge & Kilgore.

Cathy Taylor, a spokeswoman for Allergan, said that while the company “is sympathetic to Douglas Ray and his family, we are pleased that the U.S. District Court in Virginia granted Allergan’s motion for a new trial and we look forward to re-trying the case.”

A hearing in the case was expected for June 9. The judge also ordered the parties to schedule a settlement conference.

Allergan has had mixed results in the cases that have gone to trial. A state court jury in Santa Ana, California, ruled for Allergan in March 2010 in a lawsuit seeking $60 million in damages for the alleged wrongful death of a 7-year-old, Kristen Spears.

In February, another Santa Ana jury hung in a case seeking $60.5 million for Thomas McGee of Missouri, who sued the company after taking Botox and developing Guillain-Barre Syndrome. The case settled earlier this month on confidential terms.

Allergan separately is awaiting an appellate decision in Oklahoma on a $15 million jury verdict in May 2010 in favor of Sharla Helton, who claimed to have suffered pain and lost her job after using Botox.

Chester, who has represented the plaintiffs in all of the trials, said he has eight Botox cases pending. He said he expected to go to trial in November in a case pending in Oklahoma state court.

Allergan shares were down $2.08, or 2.3 percent, at $88.17 in late afternoon trading.

Reporting By Nate Raymond; Editing by Martha Graybow, Gary Hill