Merck Vioxx News and Press Releases - News Menu

The SEC, which can issue subpoenas once a formal investigation has started, is likely probing what Merck, run by CEO Raymond Gilmartin, told investors about the drug before the recall.

"They're looking to see whether Merck was perfectly honest with the investment community," said Al Rauch, a pharmaceutical analyst at A.G. Edwards. "If [the stock drop after the recall] was that bad, were investors misled, or was the company taken by surprise?"

John Heine, a spokesman for the SEC, declined to comment on the nature of the agency's investigation. The company said it is cooperating with the SEC.

At the same time, the U.S. Court of Appeals cut back on the patent protection for Fosamax, which had sales last year of $3.2 billion and was the company's second-biggest revenue producer. Merck said it may request a reconsideration by the court of appeals.

Fosamax was supposed to help fill the hole created by Vioxx's recall, not add to concerns about the firm's profit, analysts said. The pressure is building on Gilmartin, who is scheduled to retire next year, to put the company on a more profitable path.

Analysts said the board could feel a sense of urgency to bring in a new CEO sooner - to give the struggling giant a fresh start. "We'll hear more concerns about hurrying up the replacement process," said Rauch. "Some people think sooner is better than later."

Peter Robb, a vice president and portfolio manager at Mairs & Power, said Gilmartin's record "hasn't been the best. He just may be in the wrong place at the wrong time."

Shares of the beleaguered drug-maker plunged $3.16, or 10%, to $28.02. It's the biggest drop since last September, when the firm recalled Vioxx.

The company's stock is off 38%, which has wiped out $38 billion in shareholder value, since last fall.

The pharmaceutical giant now has a "big question mark for the stock," said Robb. "I don't think that'll change for a while."

Analysts said the company could face expensive settlements from Vioxx litigation.

As of the end of the year, the firm said it had close to 600 lawsuits from groups alleging injuries tied to Vioxx, including heart attacks.

"The range on the settlements is from a few billion to dozens of billions," said Rauch.

Payments that big could force the company to reconsider whether to pay out its dividend, analysts said, which may also have contributed to yesterday's stock slide.

"We remain committed to our dividend," said Merck spokesman Tony Plohoros.

Other Resources
Drug Stores
Medical Classifieds
Legal Search Engine
Top Mesothelioma Sites
Phone Cards

Vioxx-Search-Engine.com
7141 Oak Pointe Curve
Minneapolis, MN 55438 USA

©Copyright
Nielsen Technical Services
All Rights Reserved Worldwide