WHITEHOUSE STATION (dpa-AFX) - Healthcare giant Merck & Co. Inc. (MRK), has agreed to pay $688 million to settle two class-action lawsuits by investors, who alleged that the company cheated them by delaying the release of adverse trial results of its cholesterol drug Vytorin.
'This agreement avoids the uncertainties of a jury trial and will resolve all of the remaining litigation in connection with the Enhance study,' said Bruce Kuhlik, executive vice president and general counsel of Merck. 'We believe it is in the best interests of the company and its shareholders to put this matter behind us, and to continue our focus on scientific innovations that improve health worldwide.'
Vytorin was developed by a joint venture of Merck and Schering-Plough Pharmaceuticals, the company which Merck acquired in 2009. Vytorin was a combination of Schering's Zetia and Merck's Zocor.
The companies conducted the trial Enhance to determine whether the combination of Zetia and Zocor was better than Zetia alone, however, the trial was a failure. Investors alleged that both the companies knew a year in advance about the trial's failure, but still withheld the news. The companies released the top line results of the trial on January 2008 and the full results on March 2008.
Merck said it continues to believe that both companies acted responsibly in connection with the Enhance study, and this agreement contains no admission of liability or wrongdoing.
Under the proposed agreement, Merck said it will pay $215 million to the Merck defendants and $473 million to Schering-Plough defendants. Merck recorded a charge of $493 million, which reflects anticipated insurance recoveries.
The charge reduced Merck's previously reported fourth-quarter earnings results to $0.30 per share from $0.46 and full-year earnings to $2.00 per share from $2.16 per share.
MRK closed Thursday's trading at $41.19, up $0.04 or 0.10%, on the NYSE.
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