UPDATE: Merck Outlook Clouded By Mistrial Declaration

posted on:
December 12, 2005

author:
Peter Loftus

NEW YORK (Dow Jones)–Questions remain about Merck & Co.’s (MRK) ability to successfully defend itself in Vioxx-related litigation after the drug maker was unable to convince a jury in the first-federal-trial-involving-thepainkiller a case many expected the company to win.

A federal judge in Houston declared the mistrial because he said the jury was deadlocked after deliberating since Thursday. The plaintiff had sued Merck alleging its Vioxx painkiller caused the fatal heart attack of her husband. Merck previously lost one Vioxx trial and won another in state courts.

The mistrial might be viewed as a setback for Merck as it was expected to win this trial. That’s because the plaintiffs husband had only taken Vioxx for less than a month, and Merck has insisted that only those taking Vioxx for at least 18 months were at heightened risk for a cardiovascular event.

The jury was deadlocked at 8-1 in favor of the defendant Merck & Co. (MRK) on Saturday.

Merck shares fell on the news, recently losing 3.4% to $28.15.

In a statement, Merck said it was disappointed over the outcome.

"We presented evidence that there is no medical or scientific evidence showing short-term use of Vioxx increases the risk of heart attack and no evidence that it contributed in any way to the unfortunate death of Richard Irvin," said Philip Beck, of the law firm of Bartlit Beck, Merck’s lead trial lawyer in the case, according to Merck’s press release.

The plaintiffs lawyer, Jere Beasley, said "we are going to keep fighting." He added: "It’s a tie, but we believe we came up better than they did."

That some jurors in the Houston case were leaning toward the plaintiff indicates that they may have been more influenced by the plaintiffs argument that Merck had been aware of Vioxx’s risks in the 1990s but tried to keep that information from the public. This argument appeared to sway the jury ill the first state trial over Vioxx in Texas.

Further clouding Merck’s outlook is last week’s revelation that key data were withheld from 2000 article on Vioxx in the New England Journal of Medicine. The journal last week published an editorial saying the deletion of three additional heart attacks in Vioxx users resulted in an understatement of Vioxx’s risk in that article.

Merck has said it eventually presented all data to regulators and in press releases, but the NEJM revelation provides further ammunition to plaintiffs’ attorneys, reinforcing their argument that Merck tried to obscure Vioxx’s risk.

"The jury in this particular case was not privy to the developments that occurred after publication in the New England Journal of Medicine," said Gary Logsdon, a plaintiffs’ attorney in Kentucky who has filed several Vioxx-related lawsuits against Merck. "Juries from this day forward will be subject to hearing that evidence and it’ll make it more difficult for Merk’s witnesses and-representatives to clear the air and make the jury believe Merck is a credible" company.

Merck executives are speaking now on a conference call that started at 11:30 am EST.

-Peter Loftus; Dow Jones Newswires; 215-656-8289; peter.loftus@dowjones.com

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