Arkansas is seeking $1.1 billion in penalties after a jury found Johnson & Johnson and its Janssen Pharmaceutical division guilty of “false or deceptive acts” in the marketing of the antipsychotic drug Risperdal, violating the state’s consumer protection laws. In 2003 the company sent a letter to more than 6,000 doctors in the state saying Risperdal was safer than competing drugs. Bloomberg reports that it’s the third jury verdict against J&J by states alleging the drugmaker hid Risperdal’s risks and tricked Medicaid regulators into paying more than they should have for the medicine. Juries in Louisiana and South Carolina also found J&J guilty of deceptive marketing practice. It’s the third jury verdict against J&J, the second-biggest maker of health products, in cases where states alleged the drugmaker hid Risperdal’s risks and tricked Medicaid regulators into paying more than they should have for the medicine. Louisiana and South Carolina juries also found the company’s Risperdal marketing violated consumer-protection laws. Sales of Risperdal peaked at $4.5 billion in 2007 before it lost patent protection. The United States has been investigating allegations that the company marketed the drug for unapproved uses, and the U.S. Justice Department is demanding that J&J pay about $1.8 billion to resolve the civil claims by federal regulators and some state attorneys general, according to Bloomberg.

Novartis AG said a patient treated with its oral multiple-sclerosis drug Gilenya has been diagnosed with a progressive multifocal leukoencephalopathy, or PML, a rare brain disease that is often fatal. The patient had been previously treated with Biogen Idec and Elan’s Tysabri, which has already been associated with several cases of PML. “The current assessment is that Tysabri is the drug most likely associated with this case of PML. However, a contribution of Gilenya to the evolution of this case can't be excluded,” said Novartis in a statement. Gilenya’s safety profile is currently under review by the European Medicines Agency, which is expected to conduct a review on April 20. Novartis said it didn’t know of any confirmed PML cases in patients treated with Gilenya who had never been treated with Tysabri. Gilenya is currently the only oral multiple sclerosis treatment on the market, and has been approved in more than 55 countries, with more than 25,000 patients having been prescribed it, according to Bloomberg.

The U.S. Food and Drug Administration has notified Merck it must change the labels on its baldness drug Propecia and enlarged prostate drug Proscar to add reports of sexual side effects. The active ingredient in both drugs is finasteride. Although sexual side effects were included in the labels of both drugs when they were first approved, new events reported to the agency “suggest a borader range of adverse effects than previously reported in patients taking these drugs,” says the FDA. However, it noted that no causal relationship had been established and only a small percentage of men who use the drugs have experienced sexual side effects. The new label for Propecia will include problems with libido, ejaculation, and orgasms that continued after patients stopped using the drugs. Proscar’s label will include the problem of decreased libido.

Billionaire investor Carl Icahn a lawsuit against Amylin Pharmaceuticals in order to see its records relating to Bristol-Myers Squibb’s $3.5 billion offer to acquire the company. Icahn, Amylin’s third largest investor, is looking to start a proxy fight against Amylin’s board of directors. He had already filed a separate suit aimed at bylaws that keep investors from seeking to vote out current directors, according to a Bloomberg report. “Amylin has flatly refused to provide any books and records in response” to Icahn’s request, according to the lawsuit. The BMS offer was turned down in February, according to sources familiar with the bid. Amylin has never confirmed the offer. Icahn has urged Amylin to pursue a sale, according to Bloomberg. He has also been critical of a recent public offering of Amylin shares at $16 a share, significantly below the purported $22 a share offer price from BMS. Icahn is seeking documents related to the offer and executive stock grants. The case is filed in Delaware Chancery Court as Icahn v. Amylin, CA7418.

Optimer Pharmaceuticals removed Michael Chang as chairman of its board of directors because of “his failure to identify and effectively manage compliance, record keeping, and conflict of interest issues” in connection with a grant of 1.5 million shares that he received from Optimer’s Taiwanese affiliate OBI. The company’s chief financial officer John Prunty and vice president Youe-Kong Shue were also dismissed because they didn’t follow proper procedures when they became aware of the issues related to the issuance of the shares to Chang. Although Chang remains a member of its board, he has been asked to resign his position. “Clearly, we are disappointed that we had to take these actions,” said Hank McKinnell, who was appointed to takes Chang’s place as chairman. He said that the board’s decision related solely to the company’s relationship with the Taiwanese affiliate. The company said it has disclosed the matter to the relevant U.S. authorities and is cooperating with those authorities in reviewing the matter.