The prior incarnation of Schering’s ERISA/securities fraud suit woes (the Zho case) was recently certified as a class action — making it far more likely to result in an increased settlement payment from Schering-Plough. H/T Ed Silverman.
. . . .The suit charges that Schering-Plough and its board of directors hurt the firm financially by, among other things, going after regulatory approval from the Food and Drug Administration of a new allergy drug, Clarinex, to replace the company’s already successful allergy drug, Claritin, whose patent was set to expire.
According to the suit, company’s efforts to get approval of Clarinex were hamstrung because of Schering-Plough’s failure to comply with FDA regulations regarding good manufacturing practices—a failure that led to the imposition of a $500-million fine, capital expenditures of $50 million for new equipment, and the additional hiring of new quality control employees.
During this time, Schering-Plough stock dropped from approximately $60 per share to below $20 per share, according to the lawsuit.
The case is Zho v. Schering-Plough Corp., D.N.J., No. 03-1204. . . .