Merck withdraws Vioxx due to new clinical studies!

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TRENTON, N.J. (AP) - Pharmaceutical giant Merck & Co. (MRK) is pulling its

blockbuster arthritis drug Vioxx from the market worldwide because new data from

a

clinical trial found an increased risk of heart attack and stroke. Its stock

price plunged

more than 25 percent as the company said the recall will hurt its earnings.

Merck said Thursday that data from the trial showed the increased risk of heart

attack

and other cardiovascular complications began 18 months after patients started

taking

Vioxx.

The data comes from a three-year study aimed at showing that Vioxx at a 25

milligram dose prevents recurrence of polyps in the colon and rectum. Such

polyps

can turn cancerous. The trial was stopped after Merck discovered the higher

heart risk

compared to patients taking dummy pills.

" It's a disaster for Merck, coming at the worst time, " said independent health

care

analyst Hemant Shah of HKS & Co. in Warren, N.J.

Vioxx is one of Merck's most important drugs, with $2.5 billion in sales in

2003. But

sales dipped 18 percent in the second quarter of this year to $653 million,

partly due

to increasing concerns about the drug's safety.

" We're taking this action because we believe it best serves the interest of

patients, "

Ray V. Gilmartin, Merck's chairman, president and chief executive, said in a

prepared

statement.

" Although we believe it would have been possible to continue to market Vioxx

with

labeling that would incorporate these new data, given the availability of

alternative

therapies and the questions raised by the data, we concluded that a voluntary

withdrawal is the responsible course to take, " he said.

Merck, the world's third-biggest drug maker, announced the news before the stock

market opened. In early trading on the New York Stock Exchange, Merck shares

plunged $11.40, or more than 25 percent, to $33.67.

The analyst Shah said the withdrawal of Vioxx comes " at a time when they really

need

to get ready for expiration " of its patent for Zocor, a high cholesterol drug

which is

Merck's top-selling drug. Zocor loses patent protection early in 2006 and sales

are

expected to plunge when generic competition begins. In an effort to replace

those

revenues, Merck recently launched a drug with partner Schering-Plough Corp.

(SGP),

Vytorin, that combines Zocor and Schering-Plough's Zetia to attack cholesterol

levels

in two complementary ways.

(AP) Dr. S. Kim, President of Merck's Research Laboratories, left, and

V.

Gilmartin,...

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" This makes it almost inevitable for the company to find a merger partner for

them to

continue to grow, " Shah said.

Merck's announcement stands to benefit rival Pfizer Inc. (PFE), the world's

biggest

drug maker. The two companies have been battling for market share, with Pfizer's

Celebrex dominating the market with about $5 billion in U.S. sales alone last

year.

Pfizer shares were up 68 cents, or more than 2 percent, to $30.86 in early

trading on

the NYSE.

" I think Celebrex sales are going to significantly increase, " Shah said.

Vioxx, launched in the United States in 1999, and a successor drug called

Arcoxia,

approved in some other countries and awaiting Food and Drug Administration

approval here, are part of a class of anti-inflammatory drugs heavily touted by

the

pharmaceutical industry as being more effective and having less side effects,

particularly on the gastrointestinal system, than older drugs.

Pfizer's Celebrex and its successor drug, Bextra, which already is on the market

in the

United States, also are in that class, called cox-2 inhibitors.

(AP) Dr. S. Kim, left, President of Merck's research labs, left, and

V.

Gilmartin,...

Full Image

" This has never been the massive innovation which was promoted to be, " Shah said

of

the drug class. " In terms of pain relief, these drugs are no better than

ibuprofen and

they cost 10, 15 times more. "

He said it is possible the news, along with some prior reports about heart risk

and

gastrointestinal bleeding linked to the drugs, could push some patients to go

back to

older, cheaper drugs.

Shah also said physicians prefer ibuprofen more than Celebrex and Vioxx

combined.

The company said the Vioxx recall will slash about 50 cents to 60 cents a share

from

its earnings for the rest of this year. That includes foregone sales, writeoffs

of

inventory held by Merck, customer returns of product previously sold and other

costs

of the pullback. Merck expects foregone fourth quarter sales of Vioxx of $700

million

to $750 million alone.

Merck, which is based in Whitehouse Station, N.J., had previously been expecting

2004 earnings per share of $3.11 to $3.17.

Merck is scheduled to release financial results for the third quarter, which

ends today,

on Oct. 21.

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On the Net: http://www.merck.com