As the first federal jury deliberates whether Merck & Co.’s painkiller Vioxx contributed to a Florida man’s death, investors on Friday digested new claims that the battered company withheld key data about the drug’s dangers.
Merck’s shares fell nearly 2 percent to close at $29.13 in New York Stock Exchange trading, after the prestigious New England Journal of Medicine on Thursday claimed Merck deleted information about three heart attacks, in addition to the 17 reported, from a key Vioxx study submitted for publication.
Merck said it disclosed the events to U.S. regulators in 2000 and publicly in 2001, including in several press releases.
The nine-person jury hearing the latest case recessed on Friday without reaching a verdict. They will resume deliberations on Saturday morning.
The Food and Drug Administration confirmed late on Friday that Merck had provided information about 20 heart attacks among Vioxx patients when it submitted study results to the agency in October 2000. The findings were discussed publicly at a February 2001 advisory committee meeting, the FDA said.
While analysts said the events do not change conclusions of the study, which showed Vioxx carried a higher risk of heart attack than a common painkiller, the negative headlines represent another blow for the stock and are likely to be used as fodder in future cases against Merck.
Citigroup analyst George Grofik, in a research note, said it’s not yet clear whether the federal jury deliberating in Houston has seen news reports of the journal’s allegations.
“While the data is not new, clearly this editorial puts a spotlight on Merck’s conduct and potentially provides plaintiff attorneys with additional fodder,” said Grofik, who maintained his “hold” rating on the stock.
Bank of America analyst Chris Schott, in a research note, said, the negative publicity “clearly does not help Merck as it works to defend itself against Vioxx litigation.”
Merck withdrew Vioxx in September 2004 after it was shown to double the risk of heart attack and stroke in patients who took the drug for more than 18 months.
Since then, more than 6,000 lawsuits are pending against Merck in the United States claiming Vioxx caused heart attacks and deaths.
Plaintiff attorney Jeff Cooper of Simmons Hanly Conroy said the claims made by the medical journal hurt Merck’s credibility and its future defense.
“They are never going to be able to walk into a courtroom again and say we told you everything about this drug,” said Cooper, who represents some 700 Vioxx plaintiffs.
“It leaves them open and much more susceptible to judges granting motions to seek punitive damages against them. It obviously raises the potential recovery in these cases and it raises the value of each case,” he said.
Defense attorney John Brenner, a partner at McCarter & English, however, said the headlines may be worse than the news.
“My initial impression is, in terms of the litigation, here may be a little less there than immediately meets the eye,” said Brenner, who has defended major drug companies, but does not represent Merck.
Brenner said he believes the information, while not included in the journal article, was available to attorneys on both sides of the litigation.
“What I’m waiting to see is what are the authors (of the study) going to say in response. That is critical,” Brenner said.
As for the impact on future cases, Brenner doesn’t believe the latest news will alter the course of the litigation.
But, he said, “It’s clearly not a happy PR event.”
