Tuesday, August 28, 2012

Schering-Plough ENHANCE Federal Securities Claims Now Set For Trial -- On November 13, 2012

Well -- almost four full years after the cases were first filed by the Gennessee County (NJ) Retirement System (pension fund investors) and individuals like Richard Manson, the claims that officers of legacy Schering-Plough wrongfully delayed disclosure of the ill-starred ENHANCE clinical trials, to prop up Schering-Plough's flagging stock are now set for trial, in the federal District Courthouse in Newark, New Jersey, thus:

. . . .This Court having reviewed the docket in this case and finding no Order scheduling the trial of this matter after the September 26, 2011 status conference; and For good cause shown;

It is on this 6th day of August 2012 ORDERED that the Trial in this matter is hereby set for Tuesday November 13, 2012 at 9:30 a.m., and

It is further ORDERED that counsel are to proceed with the Final Pretrial Conference before Magistrate Judge Joseph A. Dickson.

/S/ Dennis M. Cavanaugh

These are the cases featuring testimony from up to six confidential internal Schering-Plough witnesses -- as to what Carrie Cox and Fred Hassan knew -- and when they knew it, about the ENHANCE null-result.

Do stay tuned, as November approaches -- I predict an eve of trial settlement -- in the mid-to-high hundreds of millions of dollars. [However, as to the behemoth that is the New Merck (~$50 billion in annual revenue), even that amount would scarcely be material.]

Saturday, August 25, 2012

B of A/Merrill Lynch Sees Merck as Fairly Valued At $45

Well, at least this time, the Banc of Amercia analysts are updating their call well ahead of the Q3 2012 quarterly results -- but thereby suggesting only that Merck's solid NYSE share price increase in 2012 has now removed almost all the "undervaule" from Merck's shares -- now at $43 and change. Fully-valued is $45 here, according to B of A/Merrill Lynch. To be fair, there are still several large houses holding a $50 target on Merck though.

Here's a bit (do go read it all) from Benzinga's note:

. . . .Banc of America Merrill Lynch noted "With Merck shares up 14% this year, and with only modest upside potential to our $45 price objective, we are moving to Neutral. As we have been since our March 2011 launch, we remain more bullish than our peers on Major Pharma with 3 Buys and 1 Neutral. . . Our move to Neutral on Merck is not at all a 'sell' call, as we remain constructive on management's strategy and track record. . . ."

I think that is about right -- but should MRL's CETP research projects (CV franchises) turn up very strong results, Merck would be undervalued in my opinion, even at $50. But that is a longer term -- 2013 and beyond -- prospect.

Monday, August 13, 2012

As I Have Been Saying Since Early 2009: IMPROVE-IT Publishes In Late 2014

While I was off the grid, Merck filed its second quarter 2012 SEC Form 10-Q. Coming as no surprise to me -- but as a concession from the captive science and marketing staff -- is the admission in the SEC filing that the study called IMPROVE-IT (see countdown clock at left!) won't be complete in 2012. Or 2013. [Both as earlier erroneously predicted by management.]

No, it is now likely that -- even if the adjudicated data is rushed to publication -- full IMPROVE-IT results, vetted and peer-reviewed, won't be available until vary late in 2014. Or maybe even first quarter 2015. Ugh.

I hate being right about things like this:

. . . .In March 2012, the Data Safety Monitoring Board (the “DSMB”) of the IMPROVE-IT trial, a large cardiovascular outcomes study evaluating ezetimibe/simvastatin against simvastatin alone in patients presenting with acute coronary syndrome, completed the second pre-specified interim efficacy analysis of the study. The DSMB conducted the planned interim efficacy analysis after the trial had reached approximately 75% of the targeted 5,250 clinical endpoints called for in the study design. The DSMB recommended that the study continue without change in design and stated it planned to review the data again in approximately nine months. That review has been scheduled for March 2013, at which point nine months of additional data will have been adjudicated. Merck remains blinded to IMPROVE-IT safety and efficacy data. IMPROVE-IT is an 18,000 patient event-driven trial and, based on the current rate at which events are being reported, the Company now anticipates the targeted 5,250 clinical endpoints for study completion will be reached in 2014. . . .

What is immensely frustrating about all of this is that the captive marketing staff at legacy Schering-Plough (under Fred Hassan's morally-vacant leadership), and then New Merck after it (under Mr. Clark, at least), continued to hold out hope for 2012 publication, as late as mid-2010. The Kool-Aid drinkers then shifted to early 2013 in late 2010, holding that view until late in 2011. As was increasingly plain to any disinterested set of eyes, since mid-2011, the rate of occurrence of events (it is an event-driven study, afterall) has long-pointed to a later finish. But sometimes no one wants to see what they don't want to see.

New Merck under Mr. Frazier is -- of late -- far better about this "realistic case" truth-telling than old Schering-Plough, but there is still a fair amount of Kool-Aid drinking going on at Whitehouse Station.

Sunday, August 5, 2012

O/T -- While On Vacation. . . "Dare Mighty Things"

In just a few hours, this will all make Mars exploration history, for NASA -- or. . . flame out. Seven minutes of terror, while I'm away for a week on an ocean-faring vacation.

See you on the week of the 15th! Keep your fingers crossed for our NASA friends: