Category Archives: Manson v. Schering-Plough Corporation Securities Fraud

ENHANCE: What Did Carrie Cox Know — And When Did She Know It?

We’ll post a little more tonight, from the Amended Consolidated ENHANCE Securities Fraud Complaint — at pages 83 to 84 — note that “CW” refers to “confidential witnesses” — and the number following the “CW” refers to individual confidential witnesses. CW 1, for example, avers s/he knows Carrie Cox knew there would be “no good news from ENHANCE.” That was in the summer of 2006. Let’s look in, now:

. . . .211. Based on interviews with former Schering employees conducted by counsel for Lead Plaintiffs, Exchange Act Defendants Hassan and Cox were closely involved with ENHANCE and regularly briefed on its details. As discussed above, CW 1 interacted with Schering’s Brand Team on a daily basis regarding ZETIA and VYTORIN, and updates regarding ENHANCE were shared in quarterly Brand Review Meetings that CW 1 attended, which were conducted by Defendant Cox. According to CW 1, there was a quality control assessment of ENHANCE data done in late 2005 to early 2006, and by the Summer of 2006, CW 1’s team “knew that they were not going to get any good news from” ENHANCE.

212. CW 1’s statements are corroborated by CW 3. According to CW 3, throughout the Class Period, Cox attended a monthly meeting with the cholesterol franchise Brand Team and the individuals in charge of ENHANCE, Drs. Veltri and Strony. CW 3 was personally involved in the preparation of certain materials for these meetings. According to CW 3, the Company’s other senior executives, including Hassan, also attended certain of these meetings. According to CW 3, ENHANCE, its progress, and results, were regularly discussed by Drs. Veltri and Strony with Cox and the other senior executives in attendance. At the meetings, discussions and detailed PowerPoint presentations updated the participants on developments with VYTORIN and ZETIA, involving not only the marketing and commercial aspects of the drugs, but also the status of ongoing research. As CW 3 has stated: “Nobody keeps this kind of stuff from management when it is going to have a huge impact on the product.” When CW 3 asked Drs. Veltri and Strony how ENHANCE was going, “years ago,” “they always seemed a bit worried.” They told CW 3 that “they did not like the kind of results they were seeing and that they had to take another look at something.”

213. According to CW 3, Schering’s marketing department for the drugs, headed by Ray Russo, “wanted to control the science; it was very much marketing driven and not science driven,” and Schering is “not concerned with the data as much as they are selling the drug”. . . .
[Emphasis supplied.]

Again — we do know Carrie Cox exercised and sold on the twentieth day of April, 2007 and first day of May 2007 — netting something like $11 million, on a series of transactions which grossed around $29 million.

Fascinating — and all filed with the SEC on Forms 4 — right here, and immediately above. . . .