Merck shares plunge after drug withdrawal

Shares in Merck & Co, the US pharmaceuticals giant, plunged by more than 26 per cent yesterday after the company withdrew Vioxx, its $2.5 billion-a-year (€2.01 billion) pain-killer because of fears that it increases the risk of heart attacks and strokes.

Merck said it was taking the drug off the market voluntarily after a patient trial showed that those taking Vioxx were twice as likely to suffer cardiac problems than patients taking a placebo.

The loss of Vioxx, which is taken by about two million people globally, could cut 50-60 cents a share from the company's earnings this year.

"In this study, there was an increased relative risk for confirmed cardiovascular events, such as heart attack and stroke, beginning after 18 months of treatment in the patients taking Vioxx compared to those taking placebo," Merck said.

Late last night it emerged that at least one had already been filed.

The withdrawal of Vioxx is a further blow to Merck, whose biggest drug Zocor, a cholesterol reducer with about $5 billion in sales, faces patent expiry soon, and the company's pipeline of potential new drugs is depleted.

Merck's shares fell by 26.78 per cent, or $12.07, to $33 in New York by the close. Analysts said it would be some time before Merck recovered from the blow.

The withdrawal of Vioxx raises questions about other drugs in the class, called a Cox-2 inhibitor, or "super aspirin".

European authorities are already investigating the safety of Cox-2 inhibitors. Merck's action adds another question to regulatory procedures that often approve drugs based on short-term clinical trials, with little experimentation on drugs' potential long-term effects.

For that reason, some analysts said, competitors Pfizer with its Celebrex and Bextra products, and potentially Novartis, might not benefit immediately.

Pfizer said yesterday it was confident in the long-term safety of its arthritis drug Celebrex, which is in the same drug class.

The US Food and Drug Administration said yesterday that it would closely watch all drugs in the class in the wake of the Vioxx withdrawal.

Meanwhile, an Oklahoma lawsuit filed yesterday charging that Merck misled patients about the safety of its arthritis drug may signal many more such suits against the dragster following its recall of Vioxx, legal experts said. - (Financial Times Service, Reuters)