Schering-Plough Wins Approval of $165 Million Investor Accord
July 29, 2010
Schering-Plough Corp., the drugmaker acquired by Merck & Co., won a U.S. judge’s approval of a $165 million settlement to resolve lawsuits over alleged fraudulent statements to investors about the Clarinex allergy medicine.
U.S. District Judge Katharine Hayden in federal court in Newark, New Jersey, gave final approval to the class-action settlement, which affects as many as 280,000 investors. The accord was “reasonable and fair” after seven years of litigation and a “robust mediation process,” she ruled.
“While Schering-Plough arguably could pay more, pushing for more in the face of risks and delays would not be in the interests of the class,” Hayden ruled Dec. 31.
Investors claimed Schering-Plough made false statements from May 2000 to February 2001 that failed to adequately disclose “serious and widespread deficiencies” in manufacturing and quality operations, which risked a delay in approval by the U.S. Food and Drug Administration of Clarinex, a successor drug to Claritin, according to court filings.
Schering-Plough announced Feb. 15, 2001, that the FDA cited manufacturing deficiencies at its facilities in New Jersey and Puerto Rico, causing the agency to withhold approval of Clarinex. Schering-Plough shares fell 15 percent the next day.
Article: Bloomberg
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