Schering-Plough Corp., the drug maker acquired by Merck & Co., has received court approval of a $165 million settlement to resolve lawsuits over fraudulent statements to investors about the Clarinex allergy medicine. A U.S. District Judge in Newark, N.J., has given final approval to the class-action settlement, which affects as many as 280,000 investors. The settlement was “reasonable and fair” after seven years of litigation and a “robust mediation process,” according to the court’s order approving the settlement.
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. That failure to disclose risked a delay in approval by the U.S. Food and Drug Administration of Clarinex, a successor drug to Claritin. Schering-Plough announced on February 15, 2001, that the FDA found manufacturing deficiencies at its facilities in New Jersey and Puerto Rico, causing the agency to withhold approval of Clarinex. Schering-Plough shares fell 15% the next day.
The settlement is one of the five largest securities class-action cases in a New Jersey federal court. The lead Plaintiff in the case was the Florida State Board of Administration. The lead counsel was Barrack, Rodos & Bacine of Philadelphia which worked very hard over a long period of time and got a good result for members of the class.
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