Judge Grants Final Approval of $688M Settlement in Two Securities Class Actions

Judge Grants Final Approval of $688M Settlement in Two Securities Class Actions

 NEWARK, N.J. — (Mealey’s) A federal judge in New Jersey on Oct. 1 granted final approval of a $688 million settlement in two securities class action lawsuits alleging that Merck and Co. Inc. and others failed to disclose adverse results of a clinical trial for two cholesterol drugs Merck was developing (In Re:  Merck & Co., Vytorin/Zetia Securities Litigation, No. 2:08-CV-2177, D. N.J.; In Re: S chering-Plough Corp./ENHANCE Securities Litigation, 08-397, D. N.J.; See March 2013, Page 8).

U.S. Judge Dennis M. Cavanaugh of the District of New Jersey issued the order granting final approval of the settlements and released Merck and subsidiary Schering-Plough Corp. from any further litigation.  Neither defendant admitted any wrongdoing.

Under the terms of the settlements, 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 Schering-Plough 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.

Claims Made

In both actions, 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 trial results.

Judge Cavanaugh also issued orders awarding attorney fees and costs and expenses in both actions yesterday.

In Merck, Judge Cavanaugh awarded lead counsel 28 percent of the settlement fund in attorney fees and another $4 million in costs and expenses.  In addition, lead plaintiffs were awarded a combined nearly $110,000 in costs and expenses for their role in the litigation.

In Schering-Plough, Judge Cavanaugh awarded lead counsel 16.92 percent of the settlement fund, as well as more than $3.6 million in costs and expenses.  Lead plaintiffs were awarded more than $102,000 in costs and expenses.

Counsel

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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