Shares of Merck & Co. plunged again Monday after a news report suggested the drug maker attempted to keep safety worries from hurting the prospects of Vioxx before the company finally recalled the painkiller.

The Wall Street Journal article appeared to spark fears among investors about the potentially massive liability faced by the Whitehouse Station-based company.

Merck withdrew Vioxx – which was taken by about 20 million Americans while available – on Sept. 30 after a clinical trial showed it doubled the risk of heart attack and stroke. The drug had about $2.5 billion in annual sales, and Merck lost $27 billion in market value the day it announced the global withdrawal.

Shares, which traded above $45 before the recall, dropped another 9.7 percent on Monday to $28.30 in heavy trading.

The Journal article cited internal Merck e-mails and other documents that suggested the company long knew about the drug’s heart risks. The article also said the company sought to pressure scientific experts who spoke out about Vioxx’s risks.

Tim Anderson, an analyst with Prudential Securities who had been bullish on Merck stock, downgraded his rating to “neutral weight” on Monday. Despite value in Merck’s product pipeline, Anderson told investors, “this will likely get lost in the negativism from ongoing Vioxx coverage.”

Standard & Poor’s also placed Merck’s credit rating on watch Monday for a possible downgrade because of the litigation risks.

The company said in its quarterly earnings release last month that it could not yet “reasonably estimate” the possible loss from litigation.

Arthur Wong, an analyst with Standard & Poor’s, said that investors and analysts will be closely watching Merck’s legal situation. It is similar to the attention paid to Wyeth, which has had to reserve $16 billion to deal with the fallout of its recalled diet drugs.

“The people who are following this industry know what Wyeth is going through at this point, and they want to know if it’s on par with that or possibly even larger,” Wong said Monday.

Merck spokeswoman Anita Larsen declined to comment on the Journal article. She referred to a Friday press release, which warned about the misinterpretation of documents produced during discovery in Vioxx litigation.

“Past experience of other companies in such situations suggests that documents will be deliberately presented out of context to advance the interest of the parties who have started Vioxx litigation,” Merck said in the statement. “None of the documents can obscure the fact that Merck acted responsibly and appropriately as it developed and marketed Vioxx.”

Andy Birchfield, an Alabama-based attorney whose firm has 58 Vioxx cases filed against Merck, including some in New Jersey, issued a response Monday calling on Merck to release more documents to the public.

“If Merck is concerned about documents selectively being released in a manner taken out of context, the remedy is for Merck to release all documents so the public can evaluate them,” Birchfield said.



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