Judge Approves $688M Vytorin Securities Fraud Class Action Settlement

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Judge Approves $688M Vytorin Securities Fraud Class Action Settlement

By John Curran

U.S. District Court Judge Dennis Cavanaugh approved two securities fraud class action settlements regarding the anti-cholesterol drug Vytorin that, combined, will offer investors in Merck & Co. and Schering-Plough Corp. $688 million. The Vytorin class action settlement resolves claims that the defendants failed to apprise investors of regarding a critical clinical trial.

Merck has agreed to pay $215 million and its subsidiary, Schering-Plough, will pay $473 million under the Vytorin class action settlement deal.

Investor plaintiffs in the class action lawsuit alleged that at the time the ENHANCE trial concluded in 2005, which tested Vytorin against the statin drug Zocor, Schering-Plough officials reportedly were aware of a lack of positive data that would influence the possibility of the Food and Drug Administration approving the drug for use in reducing cholesterol levels. Through 2007, employees allegedly did not publicize the data before and after an August 2007 initial public offering of Schering-Plough stock. As a result, Schering-Plough’s $473 million settlement involving stock in that company covers a Class of investors who invested between January 3, 2007, and March 28, 2008.

Since Merck & Co. bought the company on November 4, 2009, its stock may also have been affected by the lack of publicity regarding the negative results of the Vytorin ENHANCE trial, according to the class action lawsuit. Anyone who bought Merck stock or invested in options between December 6, 2005, and through March 28, 2008, may be eligible for a portion of the $215 settlement regarding Merck shares.

While the litigation took nearly five years to resolve, neither Merck nor Schering-Plough have admitted wrongdoing by agreeing to the class action settlement approved by Judge Cavanaugh in U.S. District Court in New Jersey. In addition to the $688 million settlement with plaintiffs, however, the two drug makers will also pay legal fees of $140 million, recommended by special masters due to the length of time the lawyers took in pursuing a legal remedy for the entire Class.

The two cases in the Vytorin Securities Class Action Lawsuit Settlement are: In re: Merck & Co., Inc. Vytorin/Zetia Securities Litigation, Case No. 08-cv-2177 and In re: Schering-Plough Corporation / ENHANCE Securities Litigation, Case No. 08-cv-397, U.S. District of New Jersey.

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