Has Schering-Plough and Fred Hassan lost all credibility with investors?

SGP stock dropped another 5% today. This followed a devastating 8% drop yesterday. That in turn followed the revelation that the long-delayed publication of the ENHANCE trial, which compared Vytorin (a combination of Zetia and Zocor) with Zocor alone, showed no difference.

Generic Zocor worked just as well as expensive Vytorin. The fact that adding Zetia to Zocor did nothing, made high-profile cardiologist Steve Nissen say to Forbes, “This drug doesn’t work. Period. It just doesn’t work.” 

Meanwhile, Schering-Plough CEO Fred Hassan sought to pooh-pooh the study earlier this month by saying that the (then yet-to-be-released) results couldn't be extrapolated to the broader population.

Now the stock market is pooh-poohing Fred Hassan and Schering-Plough.

The only one happy may be Fred Hassan lieutenant and Schering President Carri Cox:

Cox managed to dump $28 million worth of SGP stock before the scandal broke.

But wait, Lee Davies, a spokesman for Schering, said the delay was unrelated to the negative findings and that the companies had not known the results until two weeks ago!

If so, the people involved in this debacle are completely incompetent, and they've created a PR nightmare based on having noooo idea the results were terrible, and their foolish, bumbling, side-show delaying results for two years and trying to change the primary endpoints was just a coincidence. If they are to be believed.

Either way, the credibility Hassan brought to Schering-Plough is gone and investors are voting with their pocketbooks.

As for Carrie Cox, either she knew bad news were coming last year when she dumped all that stock--or she didn't.

If she didn't know a thing, a year and a half after the study was completed, shouldn't she have made it her business to know?

And if she did know, what went through her mind when she placed that $28 million sell order?

Comments

[dave]

First of all the study did show a significant reduction in LDL reduction with Vytorin vs. Zocor. The media needs to get their facts straight and stop blowing this out of proportion. Vytorin and Zetia are very safe and effective drugs. This was a 2 year study looking at patients with familial (genetic predisposition) to High cholesterol and had an LDL over 300 which is very very high. 2 years is a short period of time when looking for plaque reduction, especially in these hard to treat patients.