Shares of Merck & Co. plunged more than 10 percent yesterday after a news report said documents showed the pharmaceutical giant hid or denied evidence for years that its blockbuster arthritis drug Vioxx causes heart problems.

Merck, one of the world’s largest drugmakers, pulled the painkiller from the market worldwide Sept. 30, saying it was acting in patients’ best interest. Vioxx has been taken by about 20 million Americans and had produced 11 percent of Merck’s total revenue.

Also yesterday, Prudential Equity Group analyst Time Anderson downgraded stock’s rating to “neutral” from “overweight” Anderson wrote that he believed there was value in the company’s drug pipeline, but he said it was likely to get lost in the negative Vioxx coverage.

Additionally, Standard & Poor’s placed Merck on CreditWatch with negative implications, which sends a strong signal that the company’s debt could be downgraded within the next three months. When Merck withdrew Vioxx, S&P lowered its outlook to “negative” from “stable.” The additional, more serious step taken yesterday reflects the momentum in the Vioxx litigation and the delay in launching Arcoxia, Vioxx’s successor drug, said S&P analyst Arthur Wong.

Hundreds of lawsuits have been filed against Merck over Vioxx, and one analyst said he believed it could cost the company up to $12 billion. On Friday, the FDA said it would not approve Arcoxia without additional safety and efficacy information. Wong said it looked as if the drug would be delayed one more year.

However, Merck may face less of a threat from Vioxx suits than Wyeth has from its withdrawn fen-phen diet-pill combination, according to another analyst.

“In the case of fen-phen, there was a clear relation between the drug and the impact on the patient,” said Sena Lund, an analyst at Cathay Financial L.L.C. “Here, with Vioxx, the evidence of cardiovascular risk isn’t as easily defined.”

Besides facing civil litigation, Merck is undergoing scrutiny by Congress. U.S. Senate investigators probing Merck’s recall of the Vioxx painkiller have interviews an Alabama lawyer whose firm has filed 58 lawsuits against the company on behalf of people claiming injuries, the lawyer said.

Lawyer Andy Birchfield said he met for 3 and a half hours in Washington with staff on the Senate Finance Committee, whose chairman is Sen. Charles Grassley, an Iowa Republican. Birchfield said he handed over company documents and statements of Merck executives and scientists taken during the litigation.

Grassley has been probing whether the U.S. Food and Drug Administration was slow in responding to safety concerns about Vioxx.

Birchfield said the committee asked him Friday for documents assuring Merck that the material gained through the pretrial gathering of evidence would remain confidential. He said his firm, Beasley, Allen, Crow, Methvin, Portis & Miles P.C. in Montgomery, Ala., had taken sworn statements from more than 30 company scientists and executives.

In a statement e-mailed from the committee, Grassley said the documents brought yo the committee’s attention by Birchfield included “disturbing marketing materials and internal e-mails.”

The Senate panel, which also has asked Merck to supply documents, met with the company last week, the senator said in the statement.

Merck shares closed down $3.03, or 9.68 percent on the New York Stock Exchange after the Wall Street Journal reported that internal e-mails and marketing materials showed the company knew as far back as 2000 that Vioxx was linked to an increased risk of hear attack, but tried to discredit such evidence.

Despite a March 9, 2000, e-mail from Merck research director Edward Scolnick to colleagues conceding an elevated risk of heart attack and stroke was “clearly there,” according to the newspaper, Merck continued to try to discredit academic researchers critical of the drug.

The Journal reported that one training document from Merck listed potentially difficult questions about the drug and stated in capital letters, “DODGE!”

Merck declined comment on the article. On Friday, Merck acknowledged that some sealed trial documents had been made public, noting that in other similar court cases, documents had been leaked to advance the plaintiffs’ lawyers interests. It said that it “acted responsibly and appropriately as it developed and marketed Vioxx.”

Vioxx was the biggest drug by sales ever withdrawn from the market. When the recall was announced Sept. 20, Merck said the results of a three-year study that linked the drug to heart attacks and strokes were unexpected.

Merck shares had been trading in the $45 range until the withdrawal announcement, plunged to the mid $30s that day.

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