Merck’s Long-Term Vioxx Cases Loom Despite Win

posted on:
February 21, 2006

author:
Staff

Merck emerged victorious in the first federal lawsuit for Vioxx but the drug company faces an uphill battle as thousands of cases remain pending.

Whitehouse Station, N.J.-Merck logged its second Vioxx win after a New Orleans jury rejected a claim by the widow of Richard Irvin, a Florida man who died in 2001. Evelyn Irvin-Plunkett alleged her husband’s use of Vioxx led, in part, to his fatal heart attack.

The Irvin-Plunkett case involved a plaintiff who had multiple long-standing cardiovascular risk factors and was a short-term user of Vioxx (less than one month), according to John Boris of Bear Stearns in a note issued to clients today.

“The legal hurdle will increase for Merck going forward as upcoming cases involve Long-Term (LT) Vioxx use cases,” the pharmaceutical analyst said.

The next trial for Merck is set for Feb. 27 and will take place in New Jersey Superior Court. The consolidated case involves two patients who each used Vioxx for 25 months and 49 months, respectively.

At the end of 2005, Merck’s legal reserves totaled approximately $685 million, Boris noted, which is expected to cover the company’s litigation costs through 2007.

The Bear Stearns analyst maintained a “peer perform” rating on Merck. “We believe the downside risk from current levels is limited anchored by Merck offering an attractive 4.4% dividend.”

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