UPDATE 1-Merck to pay $688 mln to settle Enhance lawsuits
Feb 14 (Reuters) - Merck & Co on Thursday said it has agreed to pay $688 million to settle two U.S. investor lawsuits over disclosures of the results of a clinical trial involving the anti-cholesterol drug Vytorin.
The lawsuits alleged that Merck and Schering-Plough Corp knew far in advance that the trial was a failure, but withheld that information from investors.
The trial, known as Enhance, had sought to demonstrate that Vytorin, a combination drug marketed by the two companies, was more effective than a competing drug in combating plaque build-up on artery walls.
The companies announced in January 2008 that Vytorin did not stop plaque any better than an inexpensive statin, Zocor, in high-risk patients with an inherited form of heart disease, though it did significantly reduce cholesterol levels.
Investors claimed they lost money in both companies' securities after results of the clinical trial were published.
Merck and Schering-Plough merged in November 2009.
The plaintiffs' law firms, Bernstein Litowitz Berger & Grossmann and Labaton Sucharow, said the combined settlements are among the 10 largest in a securities class-action case that did not involve a restatement of results.
In a statement, Merck said it will pay $215 million to settle a lawsuit brought against Merck defendants, and $473 million to settle a lawsuit against Schering-Plough defendants.
Both settlements require court approval.
Merck said it has recorded a $493 million after-tax charge for the settlements. It said this reduced previously reported fourth-quarter profit per share to 30 cents from 46 cents.
Shares of Merck closed Wednesday at $41.15 on the New York Stock Exchange.