Jury finds Merck not liable over Vioxx

By Jon Hurdle

ATLANTIC CITY, New Jersey (Reuters) – In a major victory
for Merck & Co Inc., a jury on Thursday decided the drugmaker
provided adequate warning to doctors about health risks
associated with its withdrawn painkiller Vioxx and did not
commit consumer fraud in marketing the drug.

The nine-member jury in state court also found that Merck
did not misrepresent, suppress or conceal information about
increased risks of heart attack and stroke from the pain and
arthritis medicine. Merck shares rose on the decision.

“It’s a terrific victory for Merck,” said Ned Riley, chief
executive of Riley Asset Management. “It might open the door
for Vioxx to come back on the market with some labeling
(changes). It may not be the lost drug everyone anticipated.”

The case brought by 60-year-old postal worker Frederick
Humeston, who claimed Vioxx caused his heart attack, was being
closely watched as a potential indicator of future Vioxx
litigation as Merck is facing more than 6,500 lawsuits from
former Vioxx users who claim to have been harmed by the drug.

“Merck would have been in a desperate situation if it had
not won this case because a negative verdict would have
encouraged waves of other plaintiffs to come forward,” said
Steve Brozak, an analyst with WBB Securities LLC.

Last August, in the first Vioxx case to go to trial, a
Texas jury found Merck liable for the death of a 59-year-old
Vioxx user and awarded his widow $253 million in damages. Merck
is appealing that decision.

More than 2,700 of the cases already brought against Merck
were filed in New Jersey and Judge Carol Higbee, who presided
over the case just decided, is expected to oversee the bulk of
them.

The jury in New Jersey reached its decision after only
about eight hours deliberation, following a seven-week trial in
which lawyers for Humeston argued that Vioxx caused his 2001
heart attack and that Merck had hidden the drug’s risks.

Vickie Heintz, a 40-year-old juror from Mays Landing, New
Jersey, said Humeston had “way too many health issues,” to win
his case.

“If you looked at his medical records over the past 20
years it was riddled with a history of medications and health
problems. Stress absolutely played a role,” Heintz said.

Merck’s lawyers had argued that the postal worker was under
tremendous job-related stress at the time of his heart attack.

“Frederick Humeston would have suffered a heart attack when
he did, whether he was taking Vioxx or not,” said Jim
Fitzpatrick, one of Merck’s attorneys.

INCREASED RISK

The plaintiff’s side had accused Merck of hiding evidence
for years that Vioxx caused increased heart risks in order to
protect huge profits.

The drugmaker said it pulled the $2.5 billion-a-year drug
from the market in September 2004 as soon as it had clear data
showing that long-term Vioxx use doubled the risk of heart
attacks and strokes.

“This case involved a person who only used Vioxx for a
short amount of time and used it intermittently,” said Albert
Rauch, an analyst for A.G. Edwards. “If Merck would have lost
this, there would not be much they could win.”

Humeston had only taken the drug for about two months for
knee pain from an old Vietnam war wound, while the study that
led to the Vioxx withdrawal last year found increased heart
risk only after 18 months of continuous use.

“I wish to impart to other plaintiffs, do not let this
deter you because Vioxx is a bad product,” Humeston told
reporters after the verdict.

Humeston’s attorney Christopher Seeger said it would take
time to get over the defeat but added: “Merck would be making a
big mistake if they think we’re not going to be looking for
another trial date immediately. We’re going to keep fighting.”

The first federal Vioxx case is scheduled to go to trial on
November 28 before U.S. District Judge Eldon Fallon of New
Orleans, who is operating out of Houston because of Hurricane
Katrina.

“There will be other Vioxx trials and we will vigorously
defend them one by one over the coming years,” Merck general
counsel Kenneth Frazier said in a statement.

Merck has set aside $675 million to fight the Vioxx
lawsuits.

Analysts are saying Merck could still eventually have to
pay anywhere from $5 billion to $50 billion to cover potential
liability from the growing wave of Vioxx lawsuits.

Merck shares closed up $1.07, or 3.8 percent, at $29.48 on
the New York Stock Exchange after climbing as high as $30.50
just after the verdict was rendered.

The share price is still down 34 percent since Merck pulled
Vioxx from the market.

(Additional reporting by Ransdell Pierson and Lewis
Krauskopf in New York and Jessica Hall in Atlantic City)

(Writing by Bill Berkrot in New York)