As of this afternoon, April 9, 2008, it looks as though oral argument will be heard on the issue of whether the so-called public pension funds will be the best class-action lead plaintiffs for all of the likely-to-be-consolidated cases alleging securities law violations in connection with the various ENHANCE study delays and non-disclosures, and/or the August and September 2007 public offerings, and/or the statements made by Schering-Plough executives prior to, and after, the ENHANCE study release.
So, I'll take a moment here to highlight what some of those complaints assert -- I'll 
likely not mention most of the actions by name, as it is likely that they will all be consolidated in the coming MDL, under the case number referenced on the cover of the brief (inset image, at right -- click to enlarge). [This will be an evolving work, as I read through each complaint, in the coming days.]
Many individuals lost very-significant parts of their retirement savings here; and various public pension funds, including the Arkansas Teacher Retirement System, the Public Employees’ Retirement System of Mississippi, the Louisiana Municipal Police Employees’ Retirement System, and the Massachusetts Pension Reserves Investment Management Board, collectively allege over $18.8 million in losses (on a FiFo basis), or $12.3 million (on a LiFo basis) -- since January 14, 2008. In addition, the Southeast And Southwest Areas Pension Fund, and the Policemen’s Annuity and Benefit Fund of Chicago alleges a LiFo basis losses of $9.3 million, and the New York Teamsters & City of Pontiac, Michigan Retirement funds allege losses of $2.4 million. That is merely the tip of the litigation iceberg, here.
Some of the complaints seek to hold the CEO, the directors, and several other Schering-Plough executives personally-liable for the above-losses. Some of the complaints also seek recovery from the numerous Wall Street underwriters of Schering-Plough's securities.
In its complaint docketed April 9, 2008, the Arkansas Teacher Retirement System alleges that these registration statements were materially false and misleading in that the defendants failed to disclose the results of the ENHANCE study, which had shown that the Company’s flagship anti-cholesterol drugs, Zetia and Vytorin, had no greater health benefit than their far cheaper generic counterparts, and, in fact, are potentially harmful to patients. This action alleges that defendants, including Schering, certain of its officers and directors, and underwriters of the offerings violated Sections 11, 12 and 15 of the Securities Act of 1933. The other actions allege claims pursuant to the Exchange Act of 1934. See, Kamel v. Schering-Plough Corp. et al., 2:08-cv-01000-DMC-MF (D.N.J. filed Feb. 22, 2008) and Manson v. Schering-Plough Corp. et al., 2:08-cv-0397-DMCMF (D.N.J. filed Jan. 18, 2008).
From Manson, then:. . . .52. The statements contained in Schering-Plough’s July 23, 2007 release and those statements contained in the Company’s 2Q:07 Form 10-Q, referenced above, were each materially false and misleading when made and were known by defendants to be false at that time. . . .
53. Unbeknownst to shareholders, however, defendants next took advantage of the artificial inflation in the price of Company stock caused as a result of the publication of their false and materially misleading statements, and on September 12, 2007, defendants announced the registration and sale of over 57.5 million shares of common stock priced at $ 27.50 per share. This registration and sale allowed Schering-Plough to reap illicit gross proceeds of over $1.581 billion.
54. Less than one week later, on September 19, 2007, Schering-Plough presented at the Merrill Lynch Global Pharmaceutical, Biotech & Medtech Conference held in London, England. At this conference, defendants reiterated many of the same or similar materially false and misleading statements as had been published by defendants previously. This conference was also broadcast live on the Internet in a widely disseminated webcast. Similarly, on November 13, 2007, defendant Bertolini also presented at the 2007 Credit Suisse Health Care Conference in Phoenix, Arizona, where he too reiterated many of the same or similar materially false and misleading statements. . . .
58. On January 3, 2008, defendant Hassan and Schering-Plough presented at the Morgan Stanley Pharmaceutical CEOs Unplugged Conference, that was also broadcast live. . . . when announcing Hassan and the Company’s participation, defendants also published a release that stated, in part, the following:
". . . .Schering-Plough to Webcast
Presentation at Morgan Stanley
Pharmaceutical CEOs Unplugged Conference
KENILWORTH, N.J., Dec. 27 /PRNewswire-FirstCall/ -- Schering-Plough Corporation (NYSE: SGP) will provide a live audio webcast of an informal presentation by Fred Hassan, chairman and chief executive officer, followed by a question-and-answer session, at the Morgan Stanley Pharmaceutical CEOs Unplugged Conference on Jan. 3, 2008, at approximately 8:45 a.m. (ET). Morgan Stanley hosts will moderate the informal “unplugged” presentation.
Included in Mr. Hassan’s comments will be Schering-Plough’s strategic evolution and the acquisition of Organon BioSciences N.V. (OBS). During the conference he may confirm that the company is still targeting the same accretion and synergy targets mentioned when the OBS acquisition was announced March 12, 2007, specifically that the transaction is anticipated to be accretive to Schering-Plough’s earnings per share by about 10 cents in the first full year, excluding purchase accounting adjustments and acquisition-related costs; and Schering-Plough expects to achieve annual synergies of $500 million. It is expected to take three years from the closing to reach this level of synergies.
Hassan may also reaffirm the following items as disclosed in previous Securities and Exchange Commission filings:
o Schering-Plough anticipates that sales from VYTORIN and ZETIA will continue to grow in the fourth quarter of 2007 and in 2008;
o Schering-Plough is confident in its key products; however, these products face growing competition.
o Schering-Plough will invest in its key brands to sustain their leadership position. . . .";
59. The statements made by defendants at the Merrill Lynch conference, at the Credit Suisse conference and at the Morgan Stanley conference as well as those statements contained in Schering-Plough’s October 22, 2007 release and and/or contained in the 3Q:07 Form 10-Q, referenced above, were each materially false and misleading when made and were known by defendants to be false at that time. . . .
63. . . .[O]n January 17, 2008, shares of the Company traded to just above $20.50 per share, as investors digested the news that defendants had purposefully delayed publishing the report that demonstrated that VYTORIN was neither safe nor effective. That day, the MotleyFool.com further reported, in part, the following:
2 Sources of Trouble for Vytorin
You know that a drug study has gone very, very bad when you can’t find out its results without a congressional inquiry. Last month the House Committee on Energy and Commerce demanded information about the Enhance clinical trial. Some data was released on Jan. 14, and it’s been a popular topic on television news since then.
Merck (NYSE: MRK) and Schering-Plough (NYSE: SGP) jointly market and share the profits of Zetia and Vytorin. Zetia blocks the uptake of food-borne cholesterol from the digestive tract and thus lowers LDL (the lousy or lethal) cholesterol. Vytorin is a combination of Zetia and Zocor. Zocor is now available as a generic, simvastatin. . . .
65. During the Class Period, as detailed herein, defendants engaged in a scheme to deceive the market, and a course of conduct that artificially inflated Schering-Plough’s stock price and operated as a fraud or deceit on Class Period purchasers of Schering-Plough’s stock by misrepresenting the status and results of the ENHANCE Study as well as the safety and efficacy of the Company’s leading drug products and, therefore, the Company’s financial results. Over a period of approximately eighteen months, defendants improperly inflated the Company’s financial results. Ultimately, however, when defendants’ prior misrepresentations and fraudulent conduct came to be revealed and was apparent to investors, shares of Schering-Plough declined precipitously -- evidence that the prior artificial inflation in the price of Schering-Plough’s shares was eradicated. As a result of their purchases of Schering-Plough stock during the Class Period, plaintiff and other members of the Class suffered economic losses, i.e. damages under the federal securities laws.
66. By improperly characterizing the status and results of the ENHANCE Study as well as the safety and efficacy of the Company’s leading drug products and, therefore, the Company’s financial results, costs and expenses, and misrepresenting its prospects, the defendants presented a misleading image of Schering-Plough’s business and future growth prospects. During the Class Period, defendants repeatedly emphasized the safety and efficacy of VYTORIN and ZETIA, and consistently reported costs and expenses within expectations and within the range for which the Company was adequately reserved. These claims caused and maintained the artificial inflation in Schering-Plough’s stock price throughout the Class Period and until the truth about the Company was ultimately revealed to investors.
67. Defendants’ false and materially misleading statements had the intended effect of causing Schering-Plough’s shares to trade at artificially inflated levels throughout the Class Period -- reaching a Class Period high of over $34.00 per share in late-May 2007.
68. On January 14 - 17, 2008, however, as investors learned the truth about the Company, and learned that defendants had failed to report the results of the ENHANCE Study or the impaired safety and efficacy of ZYTORIN, and once investors learned that Schering-Plough was now being investigated by the Congress for its false advertising of its cholesterol drugs, shares of the Company declined precipitously. Defendants’ belated disclosures had an immediate, adverse impact on the price of Schering-Plough shares.
69. These belated revelations also evidenced defendants’ prior falsification of Schering-Plough’s business prospects due to defendants’ false statements. As investors and the market ultimately learned, the Company’s prior business prospects had been overstated as were the Company’s results of operations. As this adverse information became known to investors, the prior artificial inflation began to be eliminated from Schering-Plough’s share price and were damaged as a result of the related share price decline.
70. As a direct result of investors learning the truth about the Company between January 14 and 17, 2008, Schering-Plough’s stock price declined precipitously from just below $28.00 per share, to a low of just over $22.50 per share - - representing a loss of market capitalization of over decline of almost $8 billion, on very heavy trading volume. This dramatic share price decline, eradicated much of the artificial inflation from Schering-Plough’s share price, causing real economic loss to investors who purchased this stock during the Class Period.
71. The decline in Schering-Plough’s stock price at the end of the Class Period was a direct result of the nature and extent of defendants’ fraud being revealed to investors and to the market. The timing and magnitude of Schering-Plough’s stock price decline negates any inference that the losses suffered by plaintiff and the other members of the Class was caused by changed market conditions, macroeconomic or industry factors or even Company-specific facts unrelated to defendants’ fraudulent conduct. . . .
And, quoting now from the Arkansas Teacher Retirement System complaint:
. . . .Material Misstatements in the Registration Statements
56. As noted, the Registration statement incorporates by reference Schering’s 2006 10-K (“2006 10-K”) filed with the SEC on February 28, 2007, Schering’s April 27, 2007 10-Q (“April 2007 10-Q”), and Schering’s July 27, 2007 10-Q (“July 2007 10-Q”). ZETIA, VYTORIN, and the “cholesterol franchise” are repeatedly discussed in these filings, which address the drugs’ sales, market share, and risk factors. The statements discussed below were materially misstated because they omit any mention of the ENHANCE study results, or the fact that the study had no independent committee, both material omissions.
57. The 2006 10-K states that Schering’s “Cholesterol Franchise” is: “ZETIA, a novel cholesterol-absorption inhibitor discovered by Schering-Plough scientists, for use as monotherapy or in combination with either statins or fenofibrate to lower cholesterol;” and “VYTORIN, a cholesterol-lowering tablet combining the dual action of ZETIA and Merck & Co., Inc.’s statin, Zocor.” Schering’s disclosures relating to ZETIA and VYTORIN detail the importance of these drugs to Schering’s financial health and provide a long list of risks relating to these revenue streams, but fail to disclose the internally known but not yet publicly disclosed impairment to the “Cholesterol Franchise” caused by the results of the ENHANCE study. . . .
63. Under the heading “2007 OUTLOOK” the 2006 10-K states:Currently, the U.S. cholesterol lowering market is adjusting to the entry into the market of multiple generic forms of competing cholesterol products. Despite the introduction of new innovative competing treatments and generic versions of competing products, Schering-Plough continues to anticipate that sales from VYTORIN and ZETIA will grow in 2007. The decisions of government entities, managed care groups and other groups concerning formularies and reimbursement policies could negatively impact the dollar size and/or growth of the cholesterol management market, including VYTORIN and ZETIA.
64. These statements were materially misstated and omitted material facts because the results of the ENHANCE study posed a direct and existing threat to sales of ZETIA and VYTORIN, Schering’s most profitable products. Yet no information about the study results was disclosed to the public at the time of the Offering. And once the study results were finally and belatedly disclosed—first incompletely in January 2008, and then in their entirety on March 30, 2008 — Schering’s stock price dropped as did prescriptions for ZETIA and VYTORIN. . . .
70. The Underwriter Defendants collectively received more than $102,000,000 in underwriting fees and commissions for the Offering. The Offering Documents disclosed that each Underwriter Defendant was serving as an underwriter for the Offering. As part of their duties as underwriters, the Underwriter Defendants, collectively and individually, were required to conduct, prior to the Offering, a reasonable investigation of the Company to ensure that the statements contained in the Offering Documents contained no material misstatements or omissions of material fact. The Underwriter Defendants failed to fulfill their duty to the investing public in this regard.
71. Defendants Hassan, Bertolini, Koehler, Becherer, Colligan, Kidder, Leder, McGrath, Mundy, Perez, Russo, Stahl, Turner, van Oordt, Wolf and Weinbach signed the Registration Statement. . . .
So -- as ever, more to come.
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