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Merck Shares Jump As Jury Rules Out Liability for Vioxx

Posted on: Monday, 20 February 2006, 09:00 CST

By Tony Glover

DRUGS giant Merck is not liable for the death of a man who took the recalled painkiller Vioxx, a US jury found this weekend. In a boost to the pharmaceuticals industry, it ruled that Vioxx was not a defective product, Merck was not negligent in making the product and it had not failed to warn users of its risks.

Richard Irvins widow had claimed Vioxx contributed to the heart attack that killed her husband. He had taken it for less than a month.

The eight-person jurys verdict late on Friday night was the first in a federal court and the third out of more than 9,000 cases filed against Merck. It is significant for investors because the more cases it wins early, the better chance it has in overcoming its legal hurdles. The pharmaceutical industry is having to find billions of dollars to fight such cases. Class-action suits on this scale are common in the US.

Investors and analysts were cheered by the jurys decision and Mercks share price rose 1% to $36.50 (Pounds 20.44, E29.57) in after- hours trading on Friday.

Ram Partners LP hedge fund partner Thomas Bundock said: This is certainly good for Merck. The more they win these cases early the better off they are. So far, Merck has done an admirable job of fending them off. The question is: can they continue? This is going to be a long drawn-out process.

Merck claimed victory after the jury returned its verdict: The jurys decision confirms there is not medical or scientific evidence showing the short-term use of Vioxx increased the risk of heart attack or contributed in any way to the death of Richard Irvin.

But the widow of Irvin, the Florida man whose death was the subject of the federal case, is reported to have shaken her fist.

The jurys verdict ended a retrial of an earlier trial in December, when a nine-member jury failed to reach a unanimous verdict.

Merck recalled Vioxx in September 2004 after it was allegedly shown to double heart attack and stroke risks for those who took it for at least 18 months. This was the first Vioxx lawsuit to be tried in federal court.

Source: Sunday Business; London (UK)

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