SOURCE: Curative Health Services

July 26, 2005 15:38 ET

Curative Health Services Announces Settlement in Prescription City Litigation

Terms of Settlement Include $5.5 Million to Curative

NASHUA, NH -- (MARKET WIRE) -- July 26, 2005 -- Curative Health Services, Inc., (NASDAQ: CURE), announced today that the Company has reached a settlement with Prescription City, Inc. in connection with a complaint filed in November 2003 seeking rescission, compensatory and punitive damages and other relief.

Under the terms of the settlement the Company received $4.5 million in cash, and is released from its obligation to pay a $1 million promissory note in connection with the asset purchase of Prescription City, Inc.

"We are pleased to bring closure to this litigation," said Paul F. McConnell, President and Chief Executive Officer of Curative. "Although this suit was not a distraction, we appreciate putting it behind us, increasing our liquidity, and continuing our focus on providing high-quality clinical services to our customers."

Curative acquired certain assets of Prescription City, Inc., formerly a Spring Valley, New York specialty pharmacy business, on June 10, 2003. The asset purchase was structured to provide indemnification, representations and warranties by the sellers. A search warrant relating to a criminal investigation was issued by a U.S. Magistrate Judge, Southern District of New York, executed on November 4, 2003. Curative was not a target of the investigation and cooperated fully with the U.S. Attorney's Office in its investigation.

About Curative Health Services

Curative Health Services, Inc. seeks to deliver high-quality care and clinical results for patients with serious or chronic medical conditions.

The Specialty Infusion business, through its national footprint of local pharmacy branches, provides products, related clinical services and disease management support to patients with chronic or severe conditions such as hemophilia and other bleeding disorders, chronic or severe infections, gastrointestinal illnesses that prohibit oral digestion and other severe conditions requiring nutritional support, immune system disorders, cancer and susceptibility to respiratory syncytial virus.

The Wound Care Management business is a leader in the area of disease management specializing in chronic wound care management. The Wound Care Management business manages, on behalf of hospital clients, a nationwide network of Wound Care Center® programs that offer a comprehensive range of services for treatment of chronic wounds.

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This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Factors that might cause such differences include, but are not limited to, risks associated with our acquisition of Critical Care Systems including, but not limited to, integration risks and costs, risks of client retention, and risks associated with the operations of the acquired business, as well as risks in our current businesses such as the substantial level of indebtedness incurred in connection with the acquisition of Critical Care Systems, the potential for termination or non-renewal of a material number of contracts, an inability to obtain new contracts, changes in government regulations relating to the Company's Specialty Infusion or Wound Care Management businesses, changes in the regulations governing third party reimbursements for the Company's services, manufacturing shortages of products sold by Curative's Specialty Infusion business, the impact of competitive products and pricing, the ability to maintain pricing arrangements with suppliers that preserve margins, the seasonality and variability of operating results, the Company's ability to implement its strategies and achieve its objectives and the other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission. Readers of this release are referred to the Company's Annual Report on Form 10-K for the year ending December 31, 2004, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 for further discussion of these and other risk factors that could affect future results.

Contact Information

  • Contact:
    Sean Mahoney
    Investor Relations
    Curative Health Services
    Critical Care Systems, Inc.
    Email Contact