The eminently capable New Jersey federal District Court Judge Stanley R. Chesler published an opinion (that’s a 13 page PDF file) earlier today, in the 2004-’05-era Vioxx® Securities and ERISA Class Action, allowing the plaintiffs to add additional claims. This time, the added allegations point to misleading statements made (by Merck) in 2000, which — it is claimed — were designed to remove suspicions about the safety of Vioxx. Those allegedly misleading disclosures have been dubbed the “4% Statement”.
You can read it all, by clicking this, or the above link — but below is a bit:
. . . .[The Amendment would include]. . . allegations that Defendants falsely stated that the inclusion of a high-risk subgroup of patients in the VIGOR trial supported Merck’s claims that the results of the trial were attributable to naproxen’s purported cardioprotective effect (as opposed to Vioxx’s propensity to increase the risk of a negative cardiovascular event, or prothrombotic effect). In particular, Plaintiffs seek to add factual allegations that Defendants deceived investors regarding the safety profile of Vioxx by explaining that four percent of the participants in the VIGOR trial should have been receiving prophylactic aspirin therapy to prevent heart attacks and strokes and insinuating that these were the VIOXX-taking participants who suffered the majority of the heart attacks. . . .
The 4% Statement appeared in two publications. According to the proposed Sixth Amended Complaint, it was first made in a Merck press release dated May 24, 2000 and then repeated, in essence, in a November 23, 2000 article in the New England Journal of Medicine concerning the VIGOR study. . . .
In short, the Court concludes that amendment of the Complaint to add allegations concerning the 4% Statement satisfies the standard of Rule 15. As alleged, the 4% Statement, read in context, bolsters the naproxen hypothesis (Merck’s explanation of the VIGOR results as attributable to the cardioprotective qualities of naproxen as opposed to the prothrombotic effect of Vioxx) and thus relates to the core of Plaintiffs’ § 10(b) claim. For the reasons stated, the Court finds that Plaintiffs have sufficiently alleged that the 4% Statement is actionable under § 10(b) and Rule 10b-5. . . .
Of course, this is not a finding that the Plaintiffs have actually proved any of this — it merely means that they may attempt to prove it, in court, at some future date. So — net, net — not material, at this point. On balance, in my opinion, it slightly increases the odds that Merck will need to settle this — to avoid a “bet the company” type trial — at some future point. We will keep you posted.