What did Carrie Cox say, on the day BEFORE she began selling?

I am having a nice back-and-forth with the ever-sharp Salmon, in the comments, here — about what might have caused the run-up in Schering stock prices from January 1, 2007 to May 1, 2007. . . . do read that, but here is what the Complaint alleges was said by Carrie Cox one day before she began the series of $29 million (gross — about $11 million, net) liquidations of her options positions — about Vyotrin’s benefits (see pages 28 to 29 of the full complaint — in 237 page PDF format):

. . . .During Schering’s First Quarter 2007 Earnings Call on April 19, 2007, Hassan stated: “We continue to grow VYTORIN and ZETIA despite the new wave of generics that has recently entered the market. As we have said before, physicians and their patients are following the evolving medical science; evolving medical science that is indicating that lower LDL cholesterol is better. And now we will be extending the core of our cholesterol business into Japan.”

During the call, Defendant Cox added: “At last month’s American College of Cardiology meeting, lowering LDL was again validated as the primary target of lipid therapy and with lower clearly better, we believe this plays right into the strength of our cholesterol franchise. Only VYTORIN provides more than a 50% LDL reduction at the usual starting dose and across the dosing range. More than Lipitor and more than Crestor.”. . .

According to Schering’s press release, in that First Quarter 2007, Vytorin/Zetia sales grew at an explosive 48 percent (over the comparable First Quarter of 2006); and Equity Income (or profit) from those sales was up a full 21 percent. Wow. That’s some mo-jo, right there.

So — what did she really know? And when did she — and CEO Fred Hassan — know it?

That is a very significant part of what this litigation is all about.

Why did Fred Hassan DOWNPLAY the potential of ENHANCE — on April 19, 2007?

Again — almost a full year before the complete disclosure of ENHANCE (at ACC, on March 31 to April 1, 2008) — way back on April 19, 2007, according to the complaint, here is what CEO Hassan had to say in response to a question, on the dearth of ENHANCE updates — from analyst Tim Anderson (then at Prudential) — quoting from the bottom of page 45, now:

. . . .122. Defendant Hassan began deliberately downplaying the importance of ENHANCE and discrediting its results as early as April 2007, if not earlier, including, for instance, on the Company’s April 19, 2007 first quarter 2007 earnings conference call. Tim Anderson, an analyst at Prudential Equity, asked Hassan, “Your first big kind of quasi-outcomes trial is coming up on VYTORIN, which is ENHANCE, and I have not heard you talk much about that despite that trial and all those results almost being in hand. It seems like they could be fairly important to [the] VYTORIN franchise. I’m wondering if you are at all worried about the outcome of this trial in terms of what it shows?” Hassan replied:

First, I think we’ve already discussed on previous occasions that the data analysis is ongoing for the ENHANCE trial. That as you know is a surrogate market trial in a very special population with very special doses. There is a much larger trial called the IMPROVE-IT trial which is more of an outcomes trial. So one has to look at the overall mix of the data. The overall regression curve in terms of LDL, lower LDL, is better, is being proven in numerous studies, so we are pretty confident about the overall pattern of data for VYTORIN.

In this statement, Hassan made a vague reference to the fact that the ENHANCE study involved “a very special population.”. . .

Why did he do that, on the very same day — in the very same public conference-call in which he also announced the spectacular 48 percent quarterly sales growth garnered by Vytorin/Zetia?

The answer to that question will likely be very illuminating — in Mr. Hassan’s deposition (read: under oath). Buckle-up.

What did Carrie Cox say, on the day BEFORE she began selling?

I am having a nice back-and-forth with the ever-sharp Salmon, in the comments, here — about what might have caused the run-up in Schering stock prices from January 1, 2007 to May 1, 2007. . . . do read that, but here is what the Complaint alleges was said by Carrie Cox one day before she began the series of $29 million (gross — about $11 million, net) liquidations of her options positions — about Vyotrin’s benefits (see pages 28 to 29 of the full complaint — in 237 page PDF format):

. . . .During Schering’s First Quarter 2007 Earnings Call on April 19, 2007, Hassan stated: “We continue to grow VYTORIN and ZETIA despite the new wave of generics that has recently entered the market. As we have said before, physicians and their patients are following the evolving medical science; evolving medical science that is indicating that lower LDL cholesterol is better. And now we will be extending the core of our cholesterol business into Japan.”

During the call, Defendant Cox added: “At last month’s American College of Cardiology meeting, lowering LDL was again validated as the primary target of lipid therapy and with lower clearly better, we believe this plays right into the strength of our cholesterol franchise. Only VYTORIN provides more than a 50% LDL reduction at the usual starting dose and across the dosing range. More than Lipitor and more than Crestor.”. . .

According to Schering’s press release, in that First Quarter 2007, Vytorin/Zetia sales grew at an explosive 48 percent (over the comparable First Quarter of 2006); and Equity Income (or profit) from those sales was up a full 21 percent. Wow. That’s some mo-jo, right there.

So — what did she really know? And when did she — and CEO Fred Hassan — know it?

That is a very significant part of what this litigation is all about.