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Mentor agrees to $24 million settlement of breast-implant suits

SANTA BARBARA, Calif. -- Mentor Corp. said Wednesday it has agreed to settle some 1,000 lawsuits it faces over silicone-gel breast implants, setting up a $24 million fund to pay plaintiffs.

While insisting it did nothing wrong, Mentor also announced plans to stop selling the controverial implants within 18 months of finalizing the settlement, which remains subject to court approval.

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'We believe this settlement is in the best interests of the company, ' said Christopher J. Conway, chairman and chief executive officer. 'It will allow Mentor to move beyond this controversy and concentrate on the future.'

Mentor said it plans to make payments to the settlement fund over the next four years, adding that it expects its insurance carriers to cover part of the cost.

The company said that as a result of the settlement, it expects to incur a one-time charge of $1.15 to $1.30 per share in its fourth quarter ended March 31 -- which will probably push Mentor into the red for the fiscal year. In the nine months ended Dec. 31, Mentor earned $8. 2 million, or 76 cents a share, on sales of $87 million.

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Wednesday's agreement makes Mentor the first of four U.S. silicone- gel implant makers to settle with a committee representing plaintiffs who have filed suits over the devices.

Other implant makers facing suits include Dow Corning Wright of Midland, Mich.; Bioplasty Inc. of St. Paul, Minn.; and Inamed Corp. of Santa Barbara, Calif.

Doctors use silicone-gel breast implants for post-mastectomy reconstructive surgery and cosmetic breast augmentation.

But some claim silicone from leaking implants causes serious autoimmune disorders. The controversy heated up in late 1991, when a California jury ordered Dow Corning Wright to pay $7.3 million to one implant recipient.

Last year, federal regulators placed a moratorium on implant sales because of questions about the devices' long-term health effects.

On Wednesday, Margaret Moses Branch, spokeswoman for the plaintiffs' committee, said discussions with Mentor had been ongoing for many months and remained unrelated to discussions with other implant makers.

'We are very pleased that because Mentor has acted responsibly, the company's limited resources will not be dissipated in prolonged litigation and we are able to deliver the optimum benefit -- in light of the company's limited fund status -- to women who have Mentor implants,' Branch said.

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She added that women with Mentor silicone-gel implants will still have a claim against Dow Corning because that company supplied Mentor with gel it used in the devices. Santa Barbara, Calif.-based Mentor produced hundreds of thousands of implants since 1984.

Several months ago, the company received Food and Drug Administration approval to sell implants specifically for post-mastectomy breast reconstruction. The FDA decision made Mentor the only remaining manufacturer in the U.S. market.

On Wednesday, Mentor said it is also developing an alternative filler material to replace silicone gel.

Additionally, Mentor and Inamed produce saline-breast implants, which the FDA's moratorium does not include.

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