Merck & Co. has agreed to pay $688 million to settle two long-running lawsuits brought by investors who alleged the drugmaker delayed releasing bad news on its blockbuster cholesterol drugs to prevent a drop in sales.
Merck, the world's third-biggest drugmaker by revenue, is restating previously reported financial results due to the settlement. It's one of the biggest recoveries ever in a securities fraud case that didn't have a government finding of wrongdoing, according to law firms representing a number of large pension funds that brought the suit.
Merck said in a statement Thursday that as a result of the agreement in principle, it is taking a charge of $493 million. The company also reduced its 2012 fourth-quarter results to 30 cents per share from 46 cents per share, and its 2012 results to $2 per share from $2.16 per share.
The delay in releasing results of a study that was meant to bolster sales of the pricey cholesterol pills, Zetia and Vytorin, triggered criticism by analysts, investors, some scientists and the media — and ultimately an investigation by Congress.