02/14/2013 05:11:52 PM EST
Merck To Pay $688M To Settle 2 Securities Class Action Lawsuits
WHITEHOUSE STATION, N.J. - (Mealey's) Merck and Co. Inc.
will pay $688 million to settle two securities class action lawsuits filed in
New Jersey federal court alleging that the drug maker and others failed to
disclose adverse results of a clinical trial for two cholesterol drugs Merck
was developing, according to a Merck press release issued Feb. 14 (In Re:
Merck & Co., Vytorin/Zetia Securities Litigation, No. 2:08-CV-2177, D.
N.J.; See September 2009, Page 28; In Re: Schering-Plough Corp./ENHANCE
Securities Litigation, 08-397, D. N.J.; See July 2010, Page 43).
Under the terms of the settlements, which are subject to
court approval in the U.S. District Court for the District of New Jersey, Merck
will pay $215 million to resolve federal securities law claims against Merck
and certain of its current and former officers and directors and another $473
million to settle claims against Merck subsidiary Schering-Plough Corp. and
certain of its current and former officers and directors stemming from both
sets of defendants' alleged failure to disclose the adverse results of the
ENHANCE (Ezetimibe and Simvastatin in Hypercholesterolemia Enhances
Atherosclerosis Regression) clinical trial for Vytorin and Zetia.
According to the press release, "[t]he plaintiffs are
investors who purchased certain securities issued by Merck and Schering-Plough
between December 2006 and March 2008 and claim that they lost money when the
results of the ENHANCE trial were published in early 2008."
In both actions, In Re: Merck & Co., Vytorin/Zetia
Securities Litigation In Re: Merck & Co., Vytorin/Zetia Securities
Litigation and In Re: Schering-Plough Corp./ENHANCE Securities
Litigation, the shareholders alleged that the defendants violated Sections
10(b), 20(a) and 20A of the Securities Exchange Act of 1934 and Securities and
Exchange Commission Rule 10b-5 by failing to disclose the ENHANCE clinical
Merck is represented by Theodore V. Wells Jr. and Daniel
J. Kramer of Paul, Weiss, Rifkind, Wharton & Garrison in New York.
The shareholders in both actions are represented by Jay
W. Eisenhofer, Geoffrey C. Jarvis, John C. Kairis, James R. Banko and Traci L.
Goins of Grant & Eisenhofer in Wilmington, Del., and Salvatore J. Graziano and Sean O'Dowd of
Bernstein, Litowitz, Berger & Grossman in New York.
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