Wechsler, Harwood, Halebian & Feffer LLP Continues with Class Action Against Schering-Plough Corporation (NYSE: SGP - News)

The law firm of Wechsler Harwood Halebian & Feffer LLP continues with the class action lawsuit it filed in the United States District Court for the District of New Jersey on behalf of purchasers of the securities of Schering-Plough Corporation (NYSE: SGP), ("Schering-Plough" or the "Company"'), who bought the securities of Schering-Plough between July 25, 2000 and February 15, 2001, inclusive (the "Class Period") to commence an action against defendants for violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

The Complaint alleges that Schering-Plough, along with Richard J. Kogan (Chief Executive Officer and Chairman of the Company's board of directors) and Thomas H. Kelly (Vice President and Controller of the Company) (together, "Defendants") violated the Securities Exchange Act of 1934. Specifically, the Complaint alleges that during the Class Period, Schering-Plough issued three earnings releases highlighting the Company's success and continued growth. These releases contained statements that were materially false and misleading because they failed to disclose material facts, concerning manufacturing difficulties at certain plants; and, that given the Company's manufacturing difficulties, the FDA would force the Company to curtail its operations and delay FDA approval of a significant and new product, desloratadine. Desloratadine, which is to be marketed as Clarinex, is scheduled to be the successor drug to Claritin, once the patent for Claritin expires in December 2002. Claritin is Schering-Plough's most successful product.

It is alleged that defendants' failure to disclose the extent of its exposure to its manufacturing problems, falsely implied that there were no known impediments to receiving approval desloratadine, which was in the final stage of the FDA's review process.

On February 15, 2001, after the close of the market, Schering-Plough finally disclosed the extent of the problems it was experiencing at its manufacturing facilities in New Jersey and Puerto Rico, and announced that it would be reducing sales and earnings expectations for the first quarter of 2001 and for the full-year 2001. Additionally, the Company reported that the FDA was requiring that all of its manufacturing deficiencies be resolved before the FDA would grant final approval of desloratadine.

The response of the market to this announcement was immediate. In after-hours trading, the price of Schering-Plough common stock sank to $38.75 per share after closing earlier in the day at $48.32. On February 16, 2001, the day after the announcement, the stock opened up for trading at $38.25. Following the announcement, numerous analysts cut their ratings and earnings estimates for Schering-Plough. At least one analyst noted that Claratin is manufactured at several of the Company's facilities in question, and that its sales might be hurt.

In addition, published reports have noted that Schering-Plough faces a risk of an FDA court-ordered injunction and severe monetary penalties if the Company's manufacturing practices do not meet with the FDA's approval. Furthermore, according to published reports, several prior warning letters received by Schering-Plough from the FDA since March 1998 included instances where the Company was reminded by the FDA that its manufacturing practices problems included repeat findings from earlier FDA inspections.

The Complaint further alleges that prior to the disclosure of the true facts about Schering-Plough, Company insiders, including defendants Kogan and Kelly, sold $41.3 million of their personally held Schering-Plough stock.

Plaintiff seeks to recover damages on behalf of all investors who purchased Schering-Plough securities during the Class Period and who suffered damages as a result, and is represented by Wechsler Harwood Halebian & Feffer LLP, which has extensive experience representing investors in class actions. The reputation and expertise of the firm in investor and other class action litigation has been repeatedly recognized by the courts, which have appointed the firm to major positions in complex class action litigations. For more information about Wechsler Harwood Halebian & Feffer LLP, please visit the Firm's website at http://www.whhf.com/.

If you are a member of the Class described above, and if you meet certain other legal requirements, you may, no later than April 17, 2001, move the Court to serve as a lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff."

If you wish to discuss this action with Wechsler Harwood Halebian & Feffer LLP, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:

  Wechsler Harwood Halebian & Feffer LLP
  488 Madison Avenue 8th Floor
  New York, NY 10022
  Phone: 877-935-7400 (Toll Free)
  Patricia Guiteau, Shareholder Relations Department: pguiteau@whhf.com

SOURCE: Wechsler Harwood Halebian & Feffer LLP

Contact: Patricia Guiteau, Shareholder Relations Department of Wechsler
Harwood Halebian & Feffer LLP, pguiteau@whhf.com

Website: http://www.whhf.com/