Merck & Co. has agreed to a combined $688 million dollar settlement regarding two securities class actions against the company and Schering-Plough, which merged with Merck in late 2009. The settlement came just several weeks before the case was set to go to trial. This recent Merck settlement puts it among the top 25 securities class actions of all time, and is likely the largest settlement involving a pharmaceutical company.
According to the lawsuits, Merck and Schering-Plough misrepresented claims about a clinical trial called “ENHANCE”, which involved the anti-cholesterol drugs Zetia and Vytorin. The claimants named in the suits state that the two companies and certain directors and officers were not forthcoming regarding poor clinical trials for the drug. The settlement indicates that Merck will responsible for $215 million to resolve the class action against Merck defendants and $473 million to resolve the class action against Schering-Plough defendants.
While the settlement has not been finalized by the court, affected investors include those that purchased certain securities issued by Merck and Schering-Plough between December 2006 and March 2008, according to the press release issued by Merck. A settlement has been reached in principle, but the claims administrator is not yet accepting claims. When the settlement is approved by the court in the coming months, claims will then be accepted.