Dollars and Jens
Thursday, September 30, 2004
Merck, the Job of the Drug Industry
Merck just can't get a break, can they?

TRENTON, N.J. (AP) -- Pharmaceutical giant Merck & Co. is halting worldwide sales of its blockbuster arthritis drug Vioxx, once viewed as possibly being able to prevent some cancers, because new data from a clinical trial found an increased risk of heart attack and stroke. Its stock price plunged more than 26 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. About 2 million people worldwide are currently taking Vioxx, according to Merck, and a total of 84 million have taken it since it came on the market with great fanfare in 1999.

Vioxx is one of Merck's most important drugs, with $2.5 billion in sales in 2003 -- about 11 percent of the company's $22.49 billion in revenue that year. 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 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 morning trading on the New York Stock Exchange, Merck shares plunged $11.98, or more than 26 percent, to $33.09.

You'll remember (or I'll tell you) that during 2003 they saw three or four promising Phase III trials fail.

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