As you may recall, Judge Cavanaugh has authorized the appropriate Hague Convention paperwork to allow the sworn deposition of Dr. Kastelein (the principal investigator on the singularly ill-starred Vytorin® Enhance study) to be taken in the Netherlands.
Now, via an overnight electronic filing in Judge Cavanaugh’s chambers, it seems that a significant institutional investor will take over day to day case management and decision-making duties from Mary Cain. Unfortunately, Mrs. Cain is ill, and her husband has passed away, leaving her essentially confined to being cared for, in her home.
Enter the Plymouth County Contributory Retirement System, a holder of at least 13,000 New Merck shares. It will likely handle the duties of pursuing these seven consolidated matters, on a go-forward basis, once Judge Cavanaugh grants the order. Here is a bit from the motion to intervene (an 11 page PDF file):
. . . .This above-captioned shareholder derivative action was filed by Plaintiffs Mary E. Cain and James D. Cain, as joint owners of Schering stock, on behalf of Nominal Defendant, Schering, and all Schering shareholders. The Cains are represented by the [same law firm as the Retirement System]. According to the Amended Complaint filed by the Cains (Docket Entry 13 in Cain v. Hassan, Civil Action No. 08-1022), this action is brought against the Board of Directors and certain officers of Schering, for breach of their fiduciary obligations of loyalty, and good faith by (i) unconscionably manipulating or disregarding the manipulation of unfavorable results of a critical clinical trial, called ENHANCE, involving Schering’s principal product, VYTORIN; (ii) engaging or allowing false, deceptive and unethical marketing practices; (iii) engaging in or turning a blind eye to $45 million of insider trading [by Cox and Sabatino]; and (iv) awarding the CEO [Fred Hassan] who orchestrated the misconduct with excessive executive compensation [with the assent of Han Becherer, Schering-Plough Board’s Compensation Committee chairman. The Cain v. Hassan action has been consolidated with the two securities class actions, the two ERISA cases and the other shareholder derivative action that have been brought against Schering and Merck arising out of the Vytorin clinical trial.]
The ENHANCE clinical trial was completed in April 2006, but Schering waited until January 14, 2008 (21 months) to release the results. The Defendants’ misconduct ignited investigations in both houses of Congress, the Food and Drug Administration, the Department of Justice, numerous state attorney generals, and a raft of private class action lawsuits involving various aspects of Schering’s business operations. In fact, Schering, along with its joint venture partner Merck & Co., Inc. (“Merck”) in conducting the ENHANCE trial, settled a consolidated consumer class action involving ENHANCE-related allegations for $41.5 million in August 2009. The settlement resolves some 145 lawsuits pending in this Court that were seeking class action status to represent consumers and insurers who purchased, used or paid money toward the purchase of Vytorin or Zetia. Despite the decimation to Schering’s stock price, reputation and exposure to litigation and investigations, Schering failed to initiate any claims against the directors and officers responsible for the clinical trial while pocketing nearly $45 million in insider trades. . . .
Unfortunately, Mr. Cain recently passed away, leaving Mrs. Cain as the sole owner of Schering stock in her household. Regrettably, Mrs. Cain is in poor health and has many medical concerns that limit her to her home. After Mr. Cain’s passing, it has been difficult for Mrs. Cain, who is under constant care, to remain current with the case and to correspond with her counsel.
The Retirement System is a pension fund overseeing investments worth hundreds of millions of dollars. As set forth in the attached Affidavit of William R. Farmer, the Retirement System first purchased shares of Schering in 2002, it retained its ownership through the Schering-Merck merger, and it currently holds more than 13,000 shares of New Merck. . . .
Stay tuned (and Merry Christmas, to Cox, Hassan, Becherer and Sabatino!), as the under-oath Netherlands depositions — of Drs. Kastelein and Bots get underway. These doctors are likely to significantly improve the plaintiffs’ evidence of at least questionable delays — in releasing the materially bad news — of what was essentially Enhance’s null result (Vytorin’s non-inferiority, over simvastatin alone).