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Schering-Plough Corp.

SCHERING-PLOUGH CORP. (Kenilworth NJ), the drugmaker acquired by Merck & Co. (Whitehouse Station NJ), 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% the next day. The settlement is one of the five largest securities class-action cases in New Jersey federal court, according to the opinion.

The case is: In re Schering-Plough Corporation Securities Litigation, 01-cv-829, U.S. District Court, District of New Jersey (Newark).
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Title Annotation:CORPORATE; acquires Merck & Co.
Article Type:Brief article
Date:Jan 11, 2010
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