Friday, April 13, 2007
Merck Shares Rise on Vioxx Legal Wins
Article in the Wall Street Journal -- Merck Shares Jump as Outlook, Tossed Case Trump Arcoxia News, by Peter Loftus. Here's an excerpt:
Merck & Co. shares jumped nearly 9%, hitting a 52-week high Friday, after the company raised its earnings outlook and said a federal judge had dismissed a class-action suit over disclosures related to its pain reliever Vioxx.
This came a day after a Food and Drug Administration panel recommended against approval of Merck's Arcoxia arthritis drug. Normally, such news might have hurt Merck shares, because the company had assumed a 2007 Arcoxia launch in its previous full-year sales forecast.
But the setback was soon overshadowed by the double whammy of good news for Merck.
A little more than two hours after Arcoxia was shot down by the FDA panel, Merck announced its first-quarter and 2007 earnings would come in higher than expected. Merck cited "strong revenue performance across the company's range of products." It's scheduled to report full results Thursday.
Also, Merck scored a couple of victories on its Vioxx litigation front. On Friday morning, Merck said a federal judge in New Jersey had dismissed a securities class-action lawsuit against the company in connection with its disclosures regarding Vioxx. A Texas judge might issue a ruling soon that could undercut the legal foundation for all 1,000 Vioxx product-liability lawsuits brought in the state against Merck, The Wall Street Journal reported Friday. Merck withdrew its Vioxx painkiller from the market in 2004 after a study linked it to higher risk for heart attack and stroke.