May 8, 2008
Expanded Class Action Lawsuit Filed Against Merck & Co., Inc., Announces Labaton Sucharow LLP
NEW YORK (May 8, 2008) – Labaton Sucharow LLP filed a class action lawsuit on May 5, 2008 in the United States District Court for the District of New Jersey, on behalf of purchasers of the securities of Merck & Co., Inc. (“Merck” or the “Company”) (NYSE: MRK) between July 24, 2006 and March 28, 2008, inclusive (the “Class Period”). This action expands the class period in the previously filed Merck action. The complaint names Merck and Richard T. Clark as defendants (collectively, “Defendants”).
The judge presiding over the action in New Jersey is the Honorable Dennis M. Cavanaugh, who is also presiding over a related securities class action against Schering-Plough Corp. (“Schering”) that arises from facts similar to the Merck action.
If you are a member of this class you can obtain a copy of the complaint from the Court (the civil action number is 08-cv-2177) or view a copy of the complaint at http://www.labaton.com/en/cases/Newly-Filed-Cases.cfm
The complaint alleges that during the Class Period, Defendants violated the Securities Exchange Act of 1934 by issuing materially false and misleading statements about the results of a study that showed that Vytorin, an expensive cholesterol drug, offered no benefits over generic drugs selling for a fraction of Vytorin’s price, which had the effect of artificially inflating the market price of Merck’s securities.
More specifically, the complaint alleges, inter alia, that Defendants failed to release the results of a study of Vytorin for nearly two years because they knew the results were unfavorable, and only after articles questioned the unusually long delay and U.S. Congressmen wrote to Merck questioning whether the delay was legitimate. Vytorin is a cholesterol-lowering medication that is a combination of two other drugs, Zetia and Zocor, and is co-marketed by Merck and Schering. The clinical trial (called “ENHANCE”) was conducted to test whether Vytorin was more effective than much cheaper “statin” drugs in preventing progression of atherosclerosis (plaque buildup) in the carotid artery, a major risk factor for heart attacks and strokes. The study was designed to test the effectiveness of Vytorin against simvastatin, the generic form of Zocor.
On Sunday, March 30, 2008, the full negative ENHANCE trial results were finally disclosed to the market. The results were negative, and showed that Vytorin was not more effective than much cheaper generic drugs in slowing the progression of atherosclerosis. The New England Journal of Medicine took the unusual step of printing two editorials which recommended doctors only turn to Zetia and Vytorin after they had exhausted all other options. Additionally, a panel of experts issued a unanimous statement calling on cardiologists to rein in the use of Zetia and Vytorin, and urged doctors to turn back to statins.
In reaction to the release of the full study results on Sunday, March 30, 2008, Merck’s stock price fell from $44.51 on March 28, 2008 to a close on March 31, 2008 (the next trading day) of $37.95 on extremely heavy volume, a one-day decline of approximately 15%.
The complaint alleges that the unusually long delay in the release of the study results was undertaken to avoid releasing bad results that would harm sales of Vytorin, which were touted during the Class Period.
Plaintiff is represented by the law firm Labaton Sucharow LLP. Labaton Sucharow is one of the country’s premier national law firms that represent individual and institutional investors in class action, complex securities and corporate governance litigation. The firm has been a champion of investor rights for over 40 years and has been recognized for its reputation for excellence by the courts.
If you bought Merck securities between July 24, 2006 and March 28, 2008, inclusive, you may move to serve as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the United States District Court for the District of New Jersey no later than June 3, 2008. A lead plaintiff is a court-appointed representative for absent class members. You do not need to seek appointment as lead plaintiff to share in any class recovery in this action.
If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action. If you would like to consider serving as lead plaintiff or have any questions about the lawsuit, you may contact one of our representatives of Labaton Sucharow at 800-321-0476.
Labaton Sucharow LLP, with offices in New York, New York and Wilmington, Delaware, is one of the country’s premier law firms representing institutional investors in class action and complex securities litigation, as well as consumers and businesses in class actions seeking to recover damages for anticompetitive practices. The Firm has been a champion of investor and consumer rights for over 45 years, seeking recovery of current losses and necessary governance reforms to protect investors and consumers. Labaton Sucharow has been recognized for its excellence by the courts and its peers. More information about Labaton Sucharow is available at www.labaton.com.