Relationship Between CEO Statements, and SGP Stock Price

As I started to flesh out toward the end of this earlier post, I was very surprised that the CEO of Schering-Plough asserted, at least twice on public web-casts, that the decline in Schering-Plough’s stock price was due — at least in part — to “press” or “media” over-reactions. That seemed (to me, to be) plainly false, even at the moment he made those statements.

On the other hand, when the independent market-forces, or expert-medical voices, had their say, the stock price reflected the severity of the ENHANCE-driven fall-off in Vytorin and Zetia profits. So, I thought it might be worthwhile to depict, in a graphical time-line fashion, the effect of these various statements, on the Adjusted NYSE Closing Prices of Schering-Plough stock. In each case, the price below reflects the first closing price after the relevant statement. Click the below to enlarge it. Note, in each case, that the rather steady stock price declines are stemmed by the CEO statement that falls in the middle of it. Note also that the decline resumes (or continues), and in fact, accelerates, once more independent voices are at the fore.

This is going to be an increasingly-troublesome set of facts for the CEO, and his Executive-Team, should Schering-Plough’s stock price not shortly return to something like $27.50, after today. And, in my opinion, the chances of that happening are now — at best — remote.

It is rather hard to fathom what kind of advice holds that the CEO should have taken this course, here — especially now, that his Executive-Team has come forward with a drastic, newly-sized-up $1 billion cost-cutting program — largely to stem the very real tide of the ENHANCE fall-out. It was, and is, real. Blaming the press for the early stages of it may have caused many more investors additional losses. That much is unfortunate, in the extreme.

Something Apparently-Overlooked in Sen. Grassley’s February 2008 Letter. . . .

~~~~~~~~~~~~~~~
U P D A T E D
04.08.08 @ 10 AM
See this Link.
~~~~~~~~~~~~~~~

I have reproduced the full-text of one of Sen. Chuck Grassley’s letters on this subject below, but for the moment, I want to focus on something that drew very little attention back in February 2008, when it was originally released.

I think this may turn out to be important. When one couples the paragraph quoted below (from Sen. Grassley’s February letter), with this Schering-Plough SEC-Filed Timeline on the ENHANCE study. . . . one learns that more than a few people at Schering may have known ENHANCE was in deep trouble by January 2007 — a full-year before when, it is generally-believed that important Schering executives knew the specifics of the ENHANCE study’s failure to meet the end-goal.

The salient quote, then:

. . . .It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded. . . .

. . . .My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin. . . .

[Emphasis supplied.]

Here is the full-text of the above letter. More to come:

February 11, 2008
Via Electronic Transmission

Mr. Fred Hassan
Chairman of the Board, Chief Executive Officer
Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, NJ 07033

Dear Mr. Hassan:

As the Ranking Member of the United States Senate Committee on Finance (Committee), I have an obligation to the more than 80 million Americans who receive health care coverage under Medicare and Medicaid to ensure that taxpayer and beneficiary dollars are spent in a fiscally sound manner. This also includes the responsibility to conduct oversight of the medical and pharmaceutical industries to ensure that Medicare and Medicaid dollars are spent appropriately on safe and effective drugs and devices.

I am following up on my prior letter to you regarding the delayed release of the ENHANCE trial by Schering-Plough and Merck.[1] This study examines whether Vytorin provides better health benefits than generic simvastatin. Vytorin is a pill that combines the statin, simvastatin, with a drug called ezetimibe that decreases absorption of cholesterol by the digestive tract.

It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded.

According to your own press release on the ENHANCE results, “There was no statistically significant difference between treatment groups on the primary endpoint.” My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin.

My Committee investigators have learned that the ENHANCE trial data were routed from all of the trial centers to Dr. John J.P. Kastelein of the University of the Netherlands. Dr. Kastelein then transmitted the data to the Schering-Plough Research Institute in Kenilworth, New Jersey.

Accordingly, please respond to the following questions and request for documents. For each response, first repeat the enumerated question followed by the appropriate answer.

1. Please explain how the ENHANCE carotid ultrasound data was transferred from the core laboratory to the Schering-Plough Research Institute.

2. Please name all Schering-Plough employees who had access to the ENHANCE data during or after completion of the trial. For each individual, please provide

a. Name;

b. Title;

c. Technical expertise (lawyer, statistician, medical doctor, etc.)

3. Please provide the names of all statisticians at the Schering-Plough Institute. Please indicate which of these employees were involved in any analysis of the ENHANCE trial analysis.

4. Please provide all emails, documents and communications discussing the results of the ENHANCE trial, including any simulations regarding the results. The scope of this request covers employees at the Schering-Plough Institute or elsewhere within the company, from the period of July 2005 to the present.

5. Please provide any and all e-mails and communications between Dr. John Kastelein and Schering-Plough employees from July 2005 until the present.

In cooperating with the Committee’s review, no documents, records, data, or other information related to these matters, either directly or indirectly, shall be destroyed, modified, removed, or otherwise made inaccessible to the Committee.

I look forward to hearing from you by no later than February 22, 2008.

Sincerely,

United States Senator
Ranking Member,
Committee on Finance

[More to Come.]

Isn’t it at least possible, then, that Schering’s own time-line, sworn-to before the SEC, will establish that management knew ENHANCE was “dead in the water” by late January 2007? And didn’t the President of the operating subsidiary, and EVP of Schering-Plough, among other other executives, sell stock (or, in the case of the chief lawyer, surrender SARs) shortly thereafter, at prices near, or above, $30 per share?

We’ll see — but here is the company’s version of this last bit (PDF-file).

Something Apparently-Overlooked in Sen. Grassley’s February 2008 Letter. . . .

~~~~~~~~~~~~~~~
U P D A T E D
04.08.08 @ 10 AM
See this Link.
~~~~~~~~~~~~~~~

I have reproduced the full-text of one of Sen. Chuck Grassley’s letters on this subject below, but for the moment, I want to focus on something that drew very little attention back in February 2008, when it was originally released.

I think this may turn out to be important. When one couples the paragraph quoted below (from Sen. Grassley’s February letter), with this Schering-Plough SEC-Filed Timeline on the ENHANCE study. . . . one learns that more than a few people at Schering may have known ENHANCE was in deep trouble by January 2007 — a full-year before when, it is generally-believed that important Schering executives knew the specifics of the ENHANCE study’s failure to meet the end-goal.

The salient quote, then:

. . . .It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded. . . .

. . . .My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin. . . .

[Emphasis supplied.]

Here is the full-text of the above letter. More to come:

February 11, 2008
Via Electronic Transmission

Mr. Fred Hassan
Chairman of the Board, Chief Executive Officer
Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, NJ 07033

Dear Mr. Hassan:

As the Ranking Member of the United States Senate Committee on Finance (Committee), I have an obligation to the more than 80 million Americans who receive health care coverage under Medicare and Medicaid to ensure that taxpayer and beneficiary dollars are spent in a fiscally sound manner. This also includes the responsibility to conduct oversight of the medical and pharmaceutical industries to ensure that Medicare and Medicaid dollars are spent appropriately on safe and effective drugs and devices.

I am following up on my prior letter to you regarding the delayed release of the ENHANCE trial by Schering-Plough and Merck.[1] This study examines whether Vytorin provides better health benefits than generic simvastatin. Vytorin is a pill that combines the statin, simvastatin, with a drug called ezetimibe that decreases absorption of cholesterol by the digestive tract.

It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded.

According to your own press release on the ENHANCE results, “There was no statistically significant difference between treatment groups on the primary endpoint.” My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin.

My Committee investigators have learned that the ENHANCE trial data were routed from all of the trial centers to Dr. John J.P. Kastelein of the University of the Netherlands. Dr. Kastelein then transmitted the data to the Schering-Plough Research Institute in Kenilworth, New Jersey.

Accordingly, please respond to the following questions and request for documents. For each response, first repeat the enumerated question followed by the appropriate answer.

1. Please explain how the ENHANCE carotid ultrasound data was transferred from the core laboratory to the Schering-Plough Research Institute.

2. Please name all Schering-Plough employees who had access to the ENHANCE data during or after completion of the trial. For each individual, please provide

a. Name;

b. Title;

c. Technical expertise (lawyer, statistician, medical doctor, etc.)

3. Please provide the names of all statisticians at the Schering-Plough Institute. Please indicate which of these employees were involved in any analysis of the ENHANCE trial analysis.

4. Please provide all emails, documents and communications discussing the results of the ENHANCE trial, including any simulations regarding the results. The scope of this request covers employees at the Schering-Plough Institute or elsewhere within the company, from the period of July 2005 to the present.

5. Please provide any and all e-mails and communications between Dr. John Kastelein and Schering-Plough employees from July 2005 until the present.

In cooperating with the Committee’s review, no documents, records, data, or other information related to these matters, either directly or indirectly, shall be destroyed, modified, removed, or otherwise made inaccessible to the Committee.

I look forward to hearing from you by no later than February 22, 2008.

Sincerely,

United States Senator
Ranking Member,
Committee on Finance

[More to Come.]

Isn’t it at least possible, then, that Schering’s own time-line, sworn-to before the SEC, will establish that management knew ENHANCE was “dead in the water” by late January 2007? And didn’t the President of the operating subsidiary, and EVP of Schering-Plough, among other other executives, sell stock (or, in the case of the chief lawyer, surrender SARs) shortly thereafter, at prices near, or above, $30 per share?

We’ll see — but here is the company’s version of this last bit (PDF-file).

Something Apparently-Overlooked in Sen. Grassley’s February 2008 Letter. . . .

~~~~~~~~~~~~~~~
U P D A T E D
04.08.08 @ 10 AM
See this Link.
~~~~~~~~~~~~~~~

I have reproduced the full-text of one of Sen. Chuck Grassley’s letters on this subject below, but for the moment, I want to focus on something that drew very little attention back in February 2008, when it was originally released.

I think this may turn out to be important. When one couples the paragraph quoted below (from Sen. Grassley’s February letter), with this Schering-Plough SEC-Filed Timeline on the ENHANCE study. . . . one learns that more than a few people at Schering may have known ENHANCE was in deep trouble by January 2007 — a full-year before when, it is generally-believed that important Schering executives knew the specifics of the ENHANCE study’s failure to meet the end-goal.

The salient quote, then:

. . . .It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded. . . .

. . . .My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin. . . .

[Emphasis supplied.]

Here is the full-text of the above letter. More to come:

February 11, 2008
Via Electronic Transmission

Mr. Fred Hassan
Chairman of the Board, Chief Executive Officer
Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, NJ 07033

Dear Mr. Hassan:

As the Ranking Member of the United States Senate Committee on Finance (Committee), I have an obligation to the more than 80 million Americans who receive health care coverage under Medicare and Medicaid to ensure that taxpayer and beneficiary dollars are spent in a fiscally sound manner. This also includes the responsibility to conduct oversight of the medical and pharmaceutical industries to ensure that Medicare and Medicaid dollars are spent appropriately on safe and effective drugs and devices.

I am following up on my prior letter to you regarding the delayed release of the ENHANCE trial by Schering-Plough and Merck.[1] This study examines whether Vytorin provides better health benefits than generic simvastatin. Vytorin is a pill that combines the statin, simvastatin, with a drug called ezetimibe that decreases absorption of cholesterol by the digestive tract.

It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded.

According to your own press release on the ENHANCE results, “There was no statistically significant difference between treatment groups on the primary endpoint.” My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin.

My Committee investigators have learned that the ENHANCE trial data were routed from all of the trial centers to Dr. John J.P. Kastelein of the University of the Netherlands. Dr. Kastelein then transmitted the data to the Schering-Plough Research Institute in Kenilworth, New Jersey.

Accordingly, please respond to the following questions and request for documents. For each response, first repeat the enumerated question followed by the appropriate answer.

1. Please explain how the ENHANCE carotid ultrasound data was transferred from the core laboratory to the Schering-Plough Research Institute.

2. Please name all Schering-Plough employees who had access to the ENHANCE data during or after completion of the trial. For each individual, please provide

a. Name;

b. Title;

c. Technical expertise (lawyer, statistician, medical doctor, etc.)

3. Please provide the names of all statisticians at the Schering-Plough Institute. Please indicate which of these employees were involved in any analysis of the ENHANCE trial analysis.

4. Please provide all emails, documents and communications discussing the results of the ENHANCE trial, including any simulations regarding the results. The scope of this request covers employees at the Schering-Plough Institute or elsewhere within the company, from the period of July 2005 to the present.

5. Please provide any and all e-mails and communications between Dr. John Kastelein and Schering-Plough employees from July 2005 until the present.

In cooperating with the Committee’s review, no documents, records, data, or other information related to these matters, either directly or indirectly, shall be destroyed, modified, removed, or otherwise made inaccessible to the Committee.

I look forward to hearing from you by no later than February 22, 2008.

Sincerely,

United States Senator
Ranking Member,
Committee on Finance

[More to Come.]

Isn’t it at least possible, then, that Schering’s own time-line, sworn-to before the SEC, will establish that management knew ENHANCE was “dead in the water” by late January 2007? And didn’t the President of the operating subsidiary, and EVP of Schering-Plough, among other other executives, sell stock (or, in the case of the chief lawyer, surrender SARs) shortly thereafter, at prices near, or above, $30 per share?

We’ll see — but here is the company’s version of this last bit (PDF-file).

Something Apparently-Overlooked in Sen. Grassley’s February 2008 Letter. . . .

~~~~~~~~~~~~~~~
U P D A T E D
04.08.08 @ 10 AM
See this Link.
~~~~~~~~~~~~~~~

I have reproduced the full-text of one of Sen. Chuck Grassley’s letters on this subject below, but for the moment, I want to focus on something that drew very little attention back in February 2008, when it was originally released.

I think this may turn out to be important. When one couples the paragraph quoted below (from Sen. Grassley’s February letter), with this Schering-Plough SEC-Filed Timeline on the ENHANCE study. . . . one learns that more than a few people at Schering may have known ENHANCE was in deep trouble by January 2007 — a full-year before when, it is generally-believed that important Schering executives knew the specifics of the ENHANCE study’s failure to meet the end-goal.

The salient quote, then:

. . . .It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded. . . .

. . . .My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin. . . .

[Emphasis supplied.]

Here is the full-text of the above letter. More to come:

February 11, 2008
Via Electronic Transmission

Mr. Fred Hassan
Chairman of the Board, Chief Executive Officer
Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, NJ 07033

Dear Mr. Hassan:

As the Ranking Member of the United States Senate Committee on Finance (Committee), I have an obligation to the more than 80 million Americans who receive health care coverage under Medicare and Medicaid to ensure that taxpayer and beneficiary dollars are spent in a fiscally sound manner. This also includes the responsibility to conduct oversight of the medical and pharmaceutical industries to ensure that Medicare and Medicaid dollars are spent appropriately on safe and effective drugs and devices.

I am following up on my prior letter to you regarding the delayed release of the ENHANCE trial by Schering-Plough and Merck.[1] This study examines whether Vytorin provides better health benefits than generic simvastatin. Vytorin is a pill that combines the statin, simvastatin, with a drug called ezetimibe that decreases absorption of cholesterol by the digestive tract.

It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded.

According to your own press release on the ENHANCE results, “There was no statistically significant difference between treatment groups on the primary endpoint.” My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin.

My Committee investigators have learned that the ENHANCE trial data were routed from all of the trial centers to Dr. John J.P. Kastelein of the University of the Netherlands. Dr. Kastelein then transmitted the data to the Schering-Plough Research Institute in Kenilworth, New Jersey.

Accordingly, please respond to the following questions and request for documents. For each response, first repeat the enumerated question followed by the appropriate answer.

1. Please explain how the ENHANCE carotid ultrasound data was transferred from the core laboratory to the Schering-Plough Research Institute.

2. Please name all Schering-Plough employees who had access to the ENHANCE data during or after completion of the trial. For each individual, please provide

a. Name;

b. Title;

c. Technical expertise (lawyer, statistician, medical doctor, etc.)

3. Please provide the names of all statisticians at the Schering-Plough Institute. Please indicate which of these employees were involved in any analysis of the ENHANCE trial analysis.

4. Please provide all emails, documents and communications discussing the results of the ENHANCE trial, including any simulations regarding the results. The scope of this request covers employees at the Schering-Plough Institute or elsewhere within the company, from the period of July 2005 to the present.

5. Please provide any and all e-mails and communications between Dr. John Kastelein and Schering-Plough employees from July 2005 until the present.

In cooperating with the Committee’s review, no documents, records, data, or other information related to these matters, either directly or indirectly, shall be destroyed, modified, removed, or otherwise made inaccessible to the Committee.

I look forward to hearing from you by no later than February 22, 2008.

Sincerely,

United States Senator
Ranking Member,
Committee on Finance

[More to Come.]

Isn’t it at least possible, then, that Schering’s own time-line, sworn-to before the SEC, will establish that management knew ENHANCE was “dead in the water” by late January 2007? And didn’t the President of the operating subsidiary, and EVP of Schering-Plough, among other other executives, sell stock (or, in the case of the chief lawyer, surrender SARs) shortly thereafter, at prices near, or above, $30 per share?

We’ll see — but here is the company’s version of this last bit (PDF-file).

Something Apparently-Overlooked in Sen. Grassley’s February 2008 Letter. . . .

~~~~~~~~~~~~~~~
U P D A T E D
04.08.08 @ 10 AM
See this Link.
~~~~~~~~~~~~~~~

I have reproduced the full-text of one of Sen. Chuck Grassley’s letters on this subject below, but for the moment, I want to focus on something that drew very little attention back in February 2008, when it was originally released.

I think this may turn out to be important. When one couples the paragraph quoted below (from Sen. Grassley’s February letter), with this Schering-Plough SEC-Filed Timeline on the ENHANCE study. . . . one learns that more than a few people at Schering may have known ENHANCE was in deep trouble by January 2007 — a full-year before when, it is generally-believed that important Schering executives knew the specifics of the ENHANCE study’s failure to meet the end-goal.

The salient quote, then:

. . . .It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded. . . .

. . . .My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin. . . .

[Emphasis supplied.]

Here is the full-text of the above letter. More to come:

February 11, 2008
Via Electronic Transmission

Mr. Fred Hassan
Chairman of the Board, Chief Executive Officer
Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, NJ 07033

Dear Mr. Hassan:

As the Ranking Member of the United States Senate Committee on Finance (Committee), I have an obligation to the more than 80 million Americans who receive health care coverage under Medicare and Medicaid to ensure that taxpayer and beneficiary dollars are spent in a fiscally sound manner. This also includes the responsibility to conduct oversight of the medical and pharmaceutical industries to ensure that Medicare and Medicaid dollars are spent appropriately on safe and effective drugs and devices.

I am following up on my prior letter to you regarding the delayed release of the ENHANCE trial by Schering-Plough and Merck.[1] This study examines whether Vytorin provides better health benefits than generic simvastatin. Vytorin is a pill that combines the statin, simvastatin, with a drug called ezetimibe that decreases absorption of cholesterol by the digestive tract.

It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded.

According to your own press release on the ENHANCE results, “There was no statistically significant difference between treatment groups on the primary endpoint.” My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin.

My Committee investigators have learned that the ENHANCE trial data were routed from all of the trial centers to Dr. John J.P. Kastelein of the University of the Netherlands. Dr. Kastelein then transmitted the data to the Schering-Plough Research Institute in Kenilworth, New Jersey.

Accordingly, please respond to the following questions and request for documents. For each response, first repeat the enumerated question followed by the appropriate answer.

1. Please explain how the ENHANCE carotid ultrasound data was transferred from the core laboratory to the Schering-Plough Research Institute.

2. Please name all Schering-Plough employees who had access to the ENHANCE data during or after completion of the trial. For each individual, please provide

a. Name;

b. Title;

c. Technical expertise (lawyer, statistician, medical doctor, etc.)

3. Please provide the names of all statisticians at the Schering-Plough Institute. Please indicate which of these employees were involved in any analysis of the ENHANCE trial analysis.

4. Please provide all emails, documents and communications discussing the results of the ENHANCE trial, including any simulations regarding the results. The scope of this request covers employees at the Schering-Plough Institute or elsewhere within the company, from the period of July 2005 to the present.

5. Please provide any and all e-mails and communications between Dr. John Kastelein and Schering-Plough employees from July 2005 until the present.

In cooperating with the Committee’s review, no documents, records, data, or other information related to these matters, either directly or indirectly, shall be destroyed, modified, removed, or otherwise made inaccessible to the Committee.

I look forward to hearing from you by no later than February 22, 2008.

Sincerely,

United States Senator
Ranking Member,
Committee on Finance

[More to Come.]

Isn’t it at least possible, then, that Schering’s own time-line, sworn-to before the SEC, will establish that management knew ENHANCE was “dead in the water” by late January 2007? And didn’t the President of the operating subsidiary, and EVP of Schering-Plough, among other other executives, sell stock (or, in the case of the chief lawyer, surrender SARs) shortly thereafter, at prices near, or above, $30 per share?

We’ll see — but here is the company’s version of this last bit (PDF-file).

Something Apparently-Overlooked in Sen. Grassley’s February 2008 Letter. . . .

~~~~~~~~~~~~~~~
U P D A T E D
04.08.08 @ 10 AM
See this Link.
~~~~~~~~~~~~~~~

I have reproduced the full-text of one of Sen. Chuck Grassley’s letters on this subject below, but for the moment, I want to focus on something that drew very little attention back in February 2008, when it was originally released.

I think this may turn out to be important. When one couples the paragraph quoted below (from Sen. Grassley’s February letter), with this Schering-Plough SEC-Filed Timeline on the ENHANCE study. . . . one learns that more than a few people at Schering may have known ENHANCE was in deep trouble by January 2007 — a full-year before when, it is generally-believed that important Schering executives knew the specifics of the ENHANCE study’s failure to meet the end-goal.

The salient quote, then:

. . . .It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded. . . .

. . . .My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin. . . .

[Emphasis supplied.]

Here is the full-text of the above letter. More to come:

February 11, 2008
Via Electronic Transmission

Mr. Fred Hassan
Chairman of the Board, Chief Executive Officer
Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, NJ 07033

Dear Mr. Hassan:

As the Ranking Member of the United States Senate Committee on Finance (Committee), I have an obligation to the more than 80 million Americans who receive health care coverage under Medicare and Medicaid to ensure that taxpayer and beneficiary dollars are spent in a fiscally sound manner. This also includes the responsibility to conduct oversight of the medical and pharmaceutical industries to ensure that Medicare and Medicaid dollars are spent appropriately on safe and effective drugs and devices.

I am following up on my prior letter to you regarding the delayed release of the ENHANCE trial by Schering-Plough and Merck.[1] This study examines whether Vytorin provides better health benefits than generic simvastatin. Vytorin is a pill that combines the statin, simvastatin, with a drug called ezetimibe that decreases absorption of cholesterol by the digestive tract.

It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded.

According to your own press release on the ENHANCE results, “There was no statistically significant difference between treatment groups on the primary endpoint.” My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin.

My Committee investigators have learned that the ENHANCE trial data were routed from all of the trial centers to Dr. John J.P. Kastelein of the University of the Netherlands. Dr. Kastelein then transmitted the data to the Schering-Plough Research Institute in Kenilworth, New Jersey.

Accordingly, please respond to the following questions and request for documents. For each response, first repeat the enumerated question followed by the appropriate answer.

1. Please explain how the ENHANCE carotid ultrasound data was transferred from the core laboratory to the Schering-Plough Research Institute.

2. Please name all Schering-Plough employees who had access to the ENHANCE data during or after completion of the trial. For each individual, please provide

a. Name;

b. Title;

c. Technical expertise (lawyer, statistician, medical doctor, etc.)

3. Please provide the names of all statisticians at the Schering-Plough Institute. Please indicate which of these employees were involved in any analysis of the ENHANCE trial analysis.

4. Please provide all emails, documents and communications discussing the results of the ENHANCE trial, including any simulations regarding the results. The scope of this request covers employees at the Schering-Plough Institute or elsewhere within the company, from the period of July 2005 to the present.

5. Please provide any and all e-mails and communications between Dr. John Kastelein and Schering-Plough employees from July 2005 until the present.

In cooperating with the Committee’s review, no documents, records, data, or other information related to these matters, either directly or indirectly, shall be destroyed, modified, removed, or otherwise made inaccessible to the Committee.

I look forward to hearing from you by no later than February 22, 2008.

Sincerely,

United States Senator
Ranking Member,
Committee on Finance

[More to Come.]

Isn’t it at least possible, then, that Schering’s own time-line, sworn-to before the SEC, will establish that management knew ENHANCE was “dead in the water” by late January 2007? And didn’t the President of the operating subsidiary, and EVP of Schering-Plough, among other other executives, sell stock (or, in the case of the chief lawyer, surrender SARs) shortly thereafter, at prices near, or above, $30 per share?

We’ll see — but here is the company’s version of this last bit (PDF-file).

Something Apparently-Overlooked in Sen. Grassley’s February 2008 Letter. . . .

~~~~~~~~~~~~~~~
U P D A T E D
04.08.08 @ 10 AM
See this Link.
~~~~~~~~~~~~~~~

I have reproduced the full-text of one of Sen. Chuck Grassley’s letters on this subject below, but for the moment, I want to focus on something that drew very little attention back in February 2008, when it was originally released.

I think this may turn out to be important. When one couples the paragraph quoted below (from Sen. Grassley’s February letter), with this Schering-Plough SEC-Filed Timeline on the ENHANCE study. . . . one learns that more than a few people at Schering may have known ENHANCE was in deep trouble by January 2007 — a full-year before when, it is generally-believed that important Schering executives knew the specifics of the ENHANCE study’s failure to meet the end-goal.

The salient quote, then:

. . . .It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded. . . .

. . . .My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin. . . .

[Emphasis supplied.]

Here is the full-text of the above letter. More to come:

February 11, 2008
Via Electronic Transmission

Mr. Fred Hassan
Chairman of the Board, Chief Executive Officer
Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, NJ 07033

Dear Mr. Hassan:

As the Ranking Member of the United States Senate Committee on Finance (Committee), I have an obligation to the more than 80 million Americans who receive health care coverage under Medicare and Medicaid to ensure that taxpayer and beneficiary dollars are spent in a fiscally sound manner. This also includes the responsibility to conduct oversight of the medical and pharmaceutical industries to ensure that Medicare and Medicaid dollars are spent appropriately on safe and effective drugs and devices.

I am following up on my prior letter to you regarding the delayed release of the ENHANCE trial by Schering-Plough and Merck.[1] This study examines whether Vytorin provides better health benefits than generic simvastatin. Vytorin is a pill that combines the statin, simvastatin, with a drug called ezetimibe that decreases absorption of cholesterol by the digestive tract.

It has come to my attention that Schering Plough and Merck would not need to unblind the data to understand that Vytorin performed no better than generic simvastatin. The ENHANCE trial is a non-inferiority study. These studies try to detect a statistically significant difference between treatment groups on the primary endpoint. Once the results are recorded, the study is then unblinded to determine which drug is the better performer. However, if the drugs performed the same, meaning there is no statistically significant difference in the treatments, then this information is apparent before the study has been unblinded.

According to your own press release on the ENHANCE results, “There was no statistically significant difference between treatment groups on the primary endpoint.” My concern is that anyone who had access to the blinded data could have run simulations and learned that Vytorin performed just the same as simvastatin.

My Committee investigators have learned that the ENHANCE trial data were routed from all of the trial centers to Dr. John J.P. Kastelein of the University of the Netherlands. Dr. Kastelein then transmitted the data to the Schering-Plough Research Institute in Kenilworth, New Jersey.

Accordingly, please respond to the following questions and request for documents. For each response, first repeat the enumerated question followed by the appropriate answer.

1. Please explain how the ENHANCE carotid ultrasound data was transferred from the core laboratory to the Schering-Plough Research Institute.

2. Please name all Schering-Plough employees who had access to the ENHANCE data during or after completion of the trial. For each individual, please provide

a. Name;

b. Title;

c. Technical expertise (lawyer, statistician, medical doctor, etc.)

3. Please provide the names of all statisticians at the Schering-Plough Institute. Please indicate which of these employees were involved in any analysis of the ENHANCE trial analysis.

4. Please provide all emails, documents and communications discussing the results of the ENHANCE trial, including any simulations regarding the results. The scope of this request covers employees at the Schering-Plough Institute or elsewhere within the company, from the period of July 2005 to the present.

5. Please provide any and all e-mails and communications between Dr. John Kastelein and Schering-Plough employees from July 2005 until the present.

In cooperating with the Committee’s review, no documents, records, data, or other information related to these matters, either directly or indirectly, shall be destroyed, modified, removed, or otherwise made inaccessible to the Committee.

I look forward to hearing from you by no later than February 22, 2008.

Sincerely,

United States Senator
Ranking Member,
Committee on Finance

[More to Come.]

Isn’t it at least possible, then, that Schering’s own time-line, sworn-to before the SEC, will establish that management knew ENHANCE was “dead in the water” by late January 2007? And didn’t the President of the operating subsidiary, and EVP of Schering-Plough, among other other executives, sell stock (or, in the case of the chief lawyer, surrender SARs) shortly thereafter, at prices near, or above, $30 per share?

We’ll see — but here is the company’s version of this last bit (PDF-file).

Why this Blog Carries the Goofy Name it Does. . . .

This blog is both a play on the name of the company, as well as a comment on what happened on, and after January 14, 2008, to the “Shearlings“. Many long-suffering investors believed CEO Fred Hassan when he said that post-January 14, 2008 Schering-Plough stock price declines were simply an “over-reaction by the press” to the ENHANCE results [Via Web-cast March 18, 2008]. So, they simply took that “haircut” in stride.

Those “Shearlings” (who then proceeded to lose some 20 percent of their value, pre-January 14, 2008), believed Mr. Hassan. They believed it was all simply the crazy media’s over-reaction to a “sensationalized” study outcome.

Then, on March 31, 2008, the remaining Shearlings were completely “Plowed Under” by the ACC Panel discussion results, from the day before. On that single trading-day, Schering-Plough investors saw a stock that closed on Friday at $19.47 (and had traded as high as $19.87 that day), fall to an intra-day low on Monday of $14.00, and only saw a recovery to $14.41, at the close on Monday. On Wednesday, April 2, 2008, SGP closed at $13.86. From Friday’s high to Wednesday’s low, then, these “Scherlings” were plowed under by ANOTHER 30 percent.

Overall, for believeing Mr. Hassan, they lost up to $13.14 per share (on January 14, 2008, SGP opened at $27.00; on April 2, 2008, it closed at $13.86). That is a 50 percent decline, in just under three months.

Then, after the market closed on that Wednesday, April 2, CEO Hassan annouced a drastic $1.5 billion cost-cutting program ($1 billion of that was new, incremental “shearing“!). . . .

That seems tantamount to an admission that this was no frenzied media over-reaction — no, these cuts — going out through 2012 — look a lot like Mr. Hassan expects this downturn in sales of (and profits on) Vytorin and Zetia to be. . . substantially-permanent.

So, this blog bears the mantle of those poor little “S[c]he[a]r[l]ings” that got completely “plo[ugh]wed” under, last week.

Why this Blog Carries the Goofy Name it Does. . . .

This blog is both a play on the name of the company, as well as a comment on what happened on, and after January 14, 2008, to the “Shearlings“. Many long-suffering investors believed CEO Fred Hassan when he said that post-January 14, 2008 Schering-Plough stock price declines were simply an “over-reaction by the press” to the ENHANCE results [Via Web-cast March 18, 2008]. So, they simply took that “haircut” in stride.

Those “Shearlings” (who then proceeded to lose some 20 percent of their value, pre-January 14, 2008), believed Mr. Hassan. They believed it was all simply the crazy media’s over-reaction to a “sensationalized” study outcome.

Then, on March 31, 2008, the remaining Shearlings were completely “Plowed Under” by the ACC Panel discussion results, from the day before. On that single trading-day, Schering-Plough investors saw a stock that closed on Friday at $19.47 (and had traded as high as $19.87 that day), fall to an intra-day low on Monday of $14.00, and only saw a recovery to $14.41, at the close on Monday. On Wednesday, April 2, 2008, SGP closed at $13.86. From Friday’s high to Wednesday’s low, then, these “Scherlings” were plowed under by ANOTHER 30 percent.

Overall, for believeing Mr. Hassan, they lost up to $13.14 per share (on January 14, 2008, SGP opened at $27.00; on April 2, 2008, it closed at $13.86). That is a 50 percent decline, in just under three months.

Then, after the market closed on that Wednesday, April 2, CEO Hassan annouced a drastic $1.5 billion cost-cutting program ($1 billion of that was new, incremental “shearing“!). . . .

That seems tantamount to an admission that this was no frenzied media over-reaction — no, these cuts — going out through 2012 — look a lot like Mr. Hassan expects this downturn in sales of (and profits on) Vytorin and Zetia to be. . . substantially-permanent.

So, this blog bears the mantle of those poor little “S[c]he[a]r[l]ings” that got completely “plo[ugh]wed” under, last week.