In their ongoing effort to defend themselves from accusations of insider trading and improper marketing, the drugmaker hasfiled a document with the Securities and Exchange Commission offering more precise info about when they were informed of the Vytorin study results.
Tom Koestler, chief scientist: Jan. 7 at 2 p.m. Fred Hassan, ceo: Jan. 10 at 8 a.m. Tom Sabatino, general counsel: Jan. 10 at 8 a.m. Carrie Smith Cox, exec vp and president: Jan. 10 at 8:30 a.m. Bob Bertolini, exec vp: Jan. 10 at 9 a.m.
The study results were issued in a press release on Jan. 14, although that came after a delay of nearly two years with scant info from either Schering-Plough or Merck, its joint-venture partner. By then, however, the drugmakers endured two months of withering criticism for briefly changing the primary study endpoint without consulting the lead investigator and appointing an independent panel to review the data, but no one knew three members had financial conflicts until the names were later released. Meanwhile, Smith Cox and others sold huge chunks of stock last spring.
Also from the SEC filing:
Q: Did Fred Hassan sell stock in 2006 or since? A: No. Fred Hassan’s December 2006 transaction did not involve any sale of Schering-Plough stock. It was his only disposition of stock since being named Chairman and CEO in 2003. As noted on the SEC Form 4 dated Dec. 4, 2006, shares were withheld (and retained by the company) to satisfy tax withholding obligations on stock awards which vested at that time. The stock awards had been granted in 2003 and the vesting date was set by the compensation committee of the board at the time of grant, so Fred Hassan had no control over the transaction date. Other executives who have had shares withheld to satisfy tax withholding obligations from 2006 through today, but had no sales or other dispositions of Schering-Plough securities are Robert Bertolini, Thomas Koestler and Thomas Sabatino. Q: What processes does Schering-Plough use to help executives comply with federal securities laws? A: Schering-Plough uses a number of overlapping processes. First, when someone is elected as an executive officer, they are trained on federal securities laws about trading and reporting stock transactions. Second, executive officers, as well as other members of the operations management team and other employees are subject to window period trading restrictions. Third, Schering-Plough institutes specific trading blackout periods when executives and certain other employees are told material non-public information. Schering-Plough’s corporate secretary instituted such a blackout on December 21, 2007, 10 days before the unblinding of the Enhance trial. The blackout period has remained in effect for the identified executives and employees. Fourth, executive officers are instructed to pre-clear every transaction in Schering-Plough securities with one of the company’s securities lawyers. During the pre-clearance discussion, the lawyer reviews the window period and any applicable blackout period, and confirms that the executive requesting pre-clearance does not have access to any material non-public information. Last, executive officers and the company’s controller are subject to SEC reporting of transactions in Schering-Plough securities on SEC Form 4 which is available to the public upon filing. Once a year, the corporate secretary’s staff obtains representations from these officers confirming that all required reports have been filed. Schering-Plough’s corporate secretary has confirmed that to the company’s knowledge all executive officers who have had any transactions in Schering-Plough securities have followed these procedures, including Carrie Cox for the transactions that have been reported in the press. Q: Has Schering-Plough’s corporate secretary confirmed that Ms. Carrie Cox’s transactions in Schering-Plough securities were conducted in accordance with these procedures? A: Yes, Susan Wolf, Schering-Plough’s senior securities lawyer has confirmed that she pre-cleared these transactions and that Ms. Cox followed Schering-Plough’s procedures.