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.; In Re: Schering-Plough Corp./ENHANCE Securities Litigation, 08-397, D. N.J.).
(Press release available. Document #57-130311-002X.)
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 LitigationIn 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 trial results.
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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