U. K. pharmaceutical group AstraZeneca PLC (AZN. LN) said it has reached a $198 million settlement over claims regarding the antipsychotic drug Seroquel in the U. S.

AstraZeneca has faced numerous product-liability lawsuits alleging that the use of Seroquel caused diabetes and other injuries, and that the company failed to warn the drug's side-effects.

The group has also faced long-running allegations it improperly promoted the drug which is approved to treat schizophrenia, bipolar disorder and depression.

The settlement relates to 17,500 product liability claims, and the company said the mediation process over claims is ongoing in both federal and state jurisdictions.

The company stated that they remain committed to a strong defense effort but continue to participate in good faith in court-ordered mediation.

Federal prosecutors and authorities from several U. S. states have been probing allegations AstraZeneca promoted Seroquel off-label, not approved by the U. S. Food and Drug Administration. In April, the company announced a settlement of $520 million with the U. S. Justice Department over the matter.

In March, the company said it would not appeal a preliminary ruling by a British regulatory panel, the Prescription Medicines Code of Practice Authority that found the drug maker failed to accurately reflect side-effects of Seroquel in an advertisement to doctors, published in 2004.

AstraZeneca reported global Seroquel sales of $4.9 billion last year and drug-data tracker IMS Health ranked it as the fifth best-selling drug in the world.

AstraZeneca shares rose 25 pence to 3280 pence, valuing the company at GBP47.64 billion. But the analysts said the settlement figure is small.

Matrix Corporate Capital analyst Navid Malik said that it it is very low compared to the settlement (value) per patient and it is also difficult for patients to prove liability, which is positive news for the stock.

Shore Capital analysts said that there may be additional outstanding liability claims in other geographies but the agreement in principle confirms the limited nature of any financial exposure.

The company said their core earnings per share guidance for 2010 remains unchanged at a range of $6.35 to $6.65