By Peter Loftus Of DOW JONES NEWSWIRES
A U.S. judge has approved a legal settlement that requires Merck & Co.'s (MRK) drug research arm to inform the company's board of directors of delays in reporting clinical trial results.
The settlement ends part of the litigation that followed the 2008 release of results of the "Enhance" clinical trial of Merck's cholesterol drug Vytorin, which raised questions about its efficacy, nearly two years after the study was completed in 2006. The data caused Vytorin sales to decline.
Merck and its cholesterol-drug partner at the time, Schering-Plough, were accused of delaying the release of the Enhance trial results to protect solid sales growth for Vytorin and a related drug, Zetia. The companies, which merged in 2009, said the delay was needed to analyze issues with data quality.
A shareholder derivative lawsuit was filed in federal court in New Jersey in 2008 against Schering and certain officers and directors, including its former chief executive, Fred Hassan, alleging the defendants withheld the Enhance results and made false and misleading statements about the study. Merck subsequently became a party to the lawsuit.
In December 2011, the parties agreed to a settlement that would terminate the litigation.
Under the terms of the settlement, Merck Research Laboratories will provide an annual report to the research committee of Merck's board, describing any clinical trials with results that haven't been reported within 12 months of completion, including the reasons for the delay and any corrective action taken.
The clinical trials subject to this policy are for Merck-sponsored studies of products marketed in the U.S., for which Merck is required to register and post results under federal law. The policy doesn't cover experimental drugs that aren't yet on the market.
Merck will retain this change in its corporate governance for at least three years, unless a majority of the independent directors deem it no longer in the best interest of Merck.
The settlement doesn't require Merck to make any monetary payments beyond attorneys' fees and expenses of no more than $5.1 million.
U.S. District Judge Dennis Cavanaugh approved the settlement Tuesday.
"We feel the settlement is an appropriate resolution of the case," said Merck spokesman Ron Rogers. He added that Merck has made no admission of wrongdoing or liability.
An attorney for the plaintiffs couldn't immediately be reached.
Merck has previously settled other lawsuits related to the Enhance trial, though some litigation continues.
Merck shares declined 2 cents to $38.36 in recent trading.
-By Peter Loftus, Dow Jones Newswires; +1-215-982-5581; email@example.com
Wednesday, February 29, 2012
Merck Legal Settlement To Bolster Clinical Data Reporting - WSJ.com