Taking on Big Pharma's Unhealthy BehaviorIn re Schering-Plough/Enhance Securities Litigation
Described as "herculean efforts of Plaintiffs' Counsel" in the Special Masters' Report, the recovery is the largest securities class action settlement ever against a pharmaceutical company, among the top 25 securities class action settlements of all time, and among the 10 largest recoveries ever in a securities class action that did not involve a financial reinstatement.Schering and its directors allegedly failed to disclosure their knowledge of negative clinical trial results of two prescription drugs and made false statements about the drugs' commercial viability. The release of the full trial results, after stalling for more than a year, resulted in Schering's stock price falling by more than 52 percent, wiping out more than $23 billion in market capitalization.
Without a smoking gun such as a reinstatement or criminal conviction like in other securities cases, Labaton Sucharow and co-counsel undertook an intensive discovery effort to provide evidence of their knowledge of wrongdoing. The nature of the case involved complex scientific data and statistical analyses. The discovery and review included millions of pages and depositions of 11 expert witnesses.
After five years of litigation, and three weeks before trial, the defendants finally succumbed to the $473 million settlement. This settlement highlights the value of private civil litigation to protect shareholders' rights. Multiple government agencies investigated the matter, but our case was what yielded a significant financial benefit for Schering's investors.
Also noted in the Special Masters' Report, "the outstanding result achieved for the class is the direct product of outstanding skill and perseverance by co-lead counsel...no one else...could have produced the result here—no government agency or corporate litigant to lead the charge and the Settlement Fund is the product solely of the efforts of plaintiffs' counsel."