Yet Another Pair of “Merger Updates” From Merck, As Filed With the SEC Tonight

You may access the full text of both, right here, and here (this latter one talks about the potential for changes to retirement plans, after 2009, but does not explain what those might be). The most-useful, and broadly applicable information from both, is excerpted verbatim, below — “straight from the horse’s mouth“:

. . . .If the Merck and Schering-Plough merger proceeds like many others before it, here is what you can expect:

Regulatory and Shareholder Approval

▲ The U.S. Securities and Exchange Commission (SEC) reviews and approves the joint merger proxy materials. Merck and Schering-Plough filed these last month.

▲ The companies send the joint merger proxy materials to their shareholders for voting.

▲ The companies conduct separate special meetings of their shareholders to consider the merger plan.

▲ If shareholders approve the proposal for a combined company, the merger progresses.

▲ If shareholders do not approve the proposal, the companies may take other steps to secure approval, such as making a tender offer for outstanding shares, or may decide not to go forward with the transaction.

▲ Regulators worldwide review and approve the proposal for a combined company from an anti-trust perspective.

▲ If regulators in the United States or other countries express anti-trust concerns about the new company, they may require disposal of some assets.

▲ Countries that have additional requirements for local approval of the merger will provide that approval based on completion of those requirements.

▲ The proposed new company seeks approval to list its shares on a major exchange, such as the New York Stock Exchange. . . .

~~~~~~~~~~~~~~~

. . . .FAQs on the Integration

Q. I am an employee in the United States and I’m wondering how the merger will affect my retirement. I am hoping to retire in the fourth quarter of 2009, but if that is when we are closing the merger, what should I do?

A. There are currently no plans to change the U.S. retirement program for 2009. In general, Merck plans to retain its employee benefit plans prior to the closing of the merger. We don’t anticipate Merck’s benefit plans will change in any material way when the merger closes.

Merck’s Global Benefits team regularly reviews benefits to ensure they are appropriate, and will continue to do so after the merger closes. Routine changes to benefits, including retirement benefits, are not dependent upon the close of the merger of Merck and Schering-Plough. . . .

There you have it. All in one place.

I Was Reading Some Letter Briefs, Recently Filed in the Manson Litigation, Tonight. . . .

And a couple of things lept out at me — I guess I hadn’t fully appreciated them, before.

For example, it might interest readers to know that Dr. John Kastelein, the “P.I.”, or Principal Investigator, on the ENHANCE study, and the man Schering-Plough turned to, on March 30, 2008, to present the full ENHANCE study results, at the American College of Cardiology (ACC) Conference that day, told The Wall Street Journal, on March 31, 2008 — one day later — that as far as he was concerned, the ENHANCE data was ready to be published (see item (ii), in the second paragraph on page 2 of that link) in March of 2007.

That’s a full year earlier than when Schering actually did so.

More importantly, for Ms. Cox, personally — her cashless exercises of options and simultaneous sales (netting north of $11 million) all occured after the date that the ENHANCE P.I., Dr. Kastelein, said he felt the data was “ready” for publication. But that publication didn’t begin until January 14, 2008 — and it wasn’t completed until March 30, 2008. But Dr. Bots — Schering’s own expert in these matters — had opined that the data were “fine” a full-year earlier.

Finally, that March 2007 date is a full four months before Schering-Plough officers, including Ms. Cox, and Mr. Hassan, caused Schering-Plough to sell $2.8 billion of equity, and mandatory convertible securities, to the public — at $27.50.

Schering-Plough’s common stock closed on the NYSE at $13.62, shortly after that ACC meeting [click to enlarge]:

Fascinatingly, the Arkansas Teacher Retirement Fund, a lead plaintiff in the Manson (Securities Act of 1933) federal putative class action litigation, can apparently prove that it bought the Schering common at the $27.50 public offering price, and can trace its purchase of the mandatory convertible preferred, to the offering’s underwriters.

The issuer itself — Schering-Plough — has strict liability to the purchasers — like the Arkansas Fund — under the Securities Act of 1933 (there are essentially no defenses, other than that every statement made in the offering was literally free of any material omission — see page 2 of this). In such a ‘33 Act “public offering” claim — there is no need to prove “scienter“, or “guilty knowledge“, at all. But it seems there is plenty of it, anyway.

On the other hand, Ms. Cox’s primary defense to the civil insider trading (an inference of scienter) will be to show that she “could not have known” about the ENHANCE results in April of 2007. The problem is that Dr. Kastelein was already meeting resistance to publishing the results, by then. Her biggest problem, though, I think, will be that by then, over on CafePharma (a board company officers were monitoring), anonymous people had written that ENHANCE was a “bust“. Stick. A. Fork. In. Her. She’s. All. Done.

Now, as the company’s highest officer, director, and a signer of the offering documents, Mr. Hassan’s only defense to personal liability on these Arkansas Fund claims, will be that “he could not have known” about the ENHANCE debacle, in August of 2007, even if he was “duly diligent” in asking after it.

During that period (August-September 2007), Dr. Kastelein was sending e-mails to (and getting profane internal replies(!) from) Schering and Merck officers, decrying the “lack of attention” being paid to finishing up the ENHANCE publication process — getting the study published.

Mr. Hassan’s “due diligence” most-certainly should have uncovered this state of affairs, given that Vytorin/Zetia were more than 60 percent of ALL the company’s profitability, at that time.

I’d say he, and she, are both in a lot of trouble. It is just taking time for the whirlwind to fully-form.

Here’s the letter I mentioned in the title of this post — it is a PDF file. [I'll likely come back, late-afternoon, tomorrow -- and fill in various links to all the salient time-line items mentioned above.] Done.

On Asenapine: the erstwhile Salmon offers improvements — and corrections — for which I am genuinely appreciative. . . .

Salmon, as ever, has done a more complete — and thoughtful — job of saying something I “would have meant to say“, had I had it in me(!). Thanks!

Importantly, Salmon also was able to find, in the Federal Register yesterday (where I failed), the notice of the now tentatively-scheduled July 30, 2009 FDA Advisory Committee meeting to consider Saphris (Asenapine). His comment is here — do go read it all; but I have corrected mine of two days past, based on his, thus:

. . . .Well Schering-Plough announced February 20, 2009, that the [Asenapine FDA] complete response was filed. The review clock on that is six months so the decision will [presumably] come mid-August 2009.

I just found the advisory committee announcement for the hearing on asenapine. It was in today’s Federal Register and will be held July 30, 2009.

Today’s advisory committee hearing [on pediatric indications for the latest class of FDA-approved anti-psychotics] was as I predicted, very misleading. . . .

Do go read it — it is illuminating!