Dutch pension fund Stichting Pensioenfonds ABP (ABP) has reached a $215m class settlement with Merck regarding a five-year-old securities class action.

ABP, along with other investors, alleged that the delay in a disclosure of the results of a drug trial caused a loss of earnings, however Merck has denied, and continues to deny these claims.

The settlement is part of a $688m total settlement that Merck agreed to with plaintiffs in two class actions that were combined for trial.

The settlement comes three weeks before the Merck Vytorin class action, which was filed in 2008, was due to come to trial on March 4. The settlement is subject to approval by Judge Dennis M. Cavanaugh.

ABP alleged that Merck delayed disclosing results of a drug trial called ENHANCE for two years, which indicated that Merck's anti-cholesterol drug Vytorin had no statistical advantage in treating atherosclerosis, a disease of the arteries, when compared to a generic statin drug.

Merck investors alleged the delay caused a substantial drop in the value of their shares when the results of the study were published in 2008.

However Merck argued that the company and its officers acted responsibly concerning the ENHANCE study.

ABP, International Fund Management SA, the Jacksonville Police and Fire Retirement System, and the General Retirement System of the City of Detroit reached a settlement with Merck and certain of its current and former officer and directors.

The Merck Vytorin class action settlement covers all investors who purchased Merck stock or options between December 6 2006 and March 28 2008.

"As important as recovery of our losses, we have taken up this case to underline our views on good corporate governance. This outcome should serve as a reminder that material information should be shared with the market as soon as it becomes available," said Henk Brouwer, ABP chairman.

He continued: "Nonetheless, the $215m represents a significant class recovery- one of the largest achieved in a case alleging fraud without a government finding of wrongdoing against the company."

First published 14.02.2013

monique_simpson@wilmington.co.uk