By Nate Raymond

NEW YORK, Oct 13 (Reuters) - A former Merck & Co Inc employee was sentenced to more than three years in prison on Tuesday for engaging in an insider trading scheme by tipping a friend at Bank of New York Mellon Corp about potential pharmaceutical mergers.

Zachary Zwerko, a former senior finance analyst at Merck who was involved with performing work on potential corporate deals, was also ordered by U.S. District Judge Alvin Hellerstein in Manhattan to pay more than $694,000.

The case was the latest in a string of insider trading prosecutions pursued under Manhattan U.S. Attorney Preet Bharara, whose office confirmed Zwerko's sentence. Bharara's office since 2009 has secured convictions of 83 people.

Zwerko, of Cambridge, Massachusetts, was sentenced to 37 months in prison. He pleaded guilty to conspiracy and securities fraud charges in February.

His plea followed that of David Post, a friend from Rutgers Business School and a former BNY Mellon product manager, who pleaded guilty in October 2014.

Prosecutors said Zwerko in 2010 proposed passing along information about drug company deals to Post to trade on in exchange for a cut in the profits.

After some time passed, Zwerko began funneling information to Post, resulting in him buying shares of Ardea BioSciences Inc, which while not bought by Merck was ultimately acquired by AstraZeneca Plc in 2012, prosecutors said.

Post's trading that time resulted in $105,000 in profits, prosecutors said, and Zwerko subsequently passed along tips on five other transactions.

While some of Post's trades were not profitable, his trading in 2014 ahead of Merck's acquisition of Idenix Pharmaceuticals resulted in a major windfall of $579,000, which he had planned to split with Zwerko, prosecutors said.

In total, the insider trading scheme generated illegal profits of at least $737,000, and Post paid Zwerko $57,000 as part of his expected cut, prosecutors said.

The case is U.S. v. Post, U.S. District Court, Southern District of New York, No. 14-cr-00715.

(Reporting by Nate Raymond in New York; Editing by Leslie Adler)