The U.S. Attorney in Massachusetts has flagged Merck as the target of a grand jury investigation, the company announced today. The probe "relates to activities in connection with Vioxx," a statement from Merck said, and the company is "continuing to respond" to the U.S. attorney's requests for info and documents.
This isn't the first we've heard of the investigation, which Merck disclosed previously. But it is the first time Merck has been told it's under scrutiny by a grand jury, which, if it's convinced there's enough evidence, could issue an indictment or indictments.
As you know, the company withdrew Vioxx on safety concerns in 2004, and since has settled thousands of personal injury claims to the tune of $4.85 billion (several cases that actually went to court were decided in favor of Merck, however). Some of those lawsuits, the Associated Press points out, have alleged that Merck knew of Vioxx's cardiovascular risks for years before pulling the drug, but hid those risks and overstated the drug's safety and effectiveness in its advertising.
Meanwhile, Merck also updated investors about its Schering-Plough acquisition financing: The company has lined up $7 billion in new credit, and it has amended its $1.5 billion in revolving credit to stay in place after the merger is complete. Banks participating in the deal include Bank of America, BNP Paribas, Citigroup, Credit Suisse, Royal Bank of Scotland, and more. This financing forms one big chunk of Merck's $41.1 billion buyout of Schering.
- see the Merck release on the probe
- read Merck's financing statement
- get more from the Associated Press
- find the Dow Jones story
ALSO: Merck announced that it would invest an additional $27 million in the first phase of its new vaccines and biologics facility in Carlow, Ireland, creating 160 additional jobs this year. Report