NEWARK, N.J. (Legal Newsline) - A Kuwaiti government fund manager is among those suing pharmaceutical company Merck & Co. in federal court, alleging that the drugmaker failed to disclose the risks of the anti-inflammatory drug Vioxx.
The Kuwait Investment Office, located in London, AEGON Investment Management and Transamerica Funds filed their complaint in the U.S. District Court for the District of New Jersey Jan. 23. The KIO manages funds on behalf of the State of Kuwait.
The plaintiffs, which bought securities between 1999 and 2004, opted out of a class-action securities lawsuit certified by a judge in 2013.
They allege Merck, which is headquartered in New Jersey, defrauded them by hiding the cardiovascular risks associated with the drug.
Merck stopped selling Vioxx in September 2004. Evidence showed that the drug increased the risk of heart attack and stroke. Thousands of lawsuits were eventually filed across the U.S.
After a few cases were tried with mixed results, Merck agreed to pay $4.85 billion into a settlement fund for qualifying claims.
Soon after announcing it would stop selling the drug, Merck’s stock price collapsed. Its common stock fell more than $12.70 to close at $33 per share -- a 26 percent single-day decline that reduced the company’s market capitalization by more than $26 billion.
“As a result of Merck’s continual release of false and misleading information concerning the efficacy and safety of Vioxx, Merck’s investors were led to believe that Vioxx was a financial blockbuster and would enhance Merck’s business and financial performance for many years, while at the same time presenting minimal liability risks to the Company that would hinder its future financial performance,” the plaintiffs wrote in their complaint.
The KIO, AEGON and Transamerica contend they have suffered “millions of dollars” in damages in connection with their purchases of Merck securities at artificially inflated prices and the subsequent drop in stock price as the direct result of Merck’s “deliberate scheme” to “conceal, suppress and distort” material facts about Vioxx’s medical and commercial viability.
Merck could not immediately be reached for comment on the lawsuit.
New York City law firm Grant & Eisenhofer PA, New Jersey firm Saiber LLC and Miami firm Diaz Reus Rolff & Targ LLP are representing the plaintiffs.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.