Fw: [Power Hour II] Merck Falls as E-Mails Suggest Vioxx Smoking Gun

[Guest guest]

[Power Hour II] Merck Falls as E-Mails Suggest Vioxx Smoking Gun

I hope someone is keeping track of the short sales on the NYSE and AMEX as well

as the puts in the future markets. Someone could be making millions on the fall

of this stock. At least one analyst is suggesting Merck stock is a good buy

(opportunity) at its current price. (Someone has to cover those short sales.) -

JR

http://www.reuters.co.uk/newsArticle.jhtml?type=healthNews & storyID=6680076 & secti\

on=news

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Merck Falls as E-Mails Suggest Vioxx Smoking Gun

Mon November 01, 2004 04:28 PM ET

By Ransdell Pierson

NEW YORK (Reuters) - Merck & Co. Inc.'s Vioxx recall is mushrooming

into a product-liability nightmare that erased another $23 billion of the

company's valuation on Monday, but analysts said it will likely withstand the

crisis.

Merck shares fell as much as 10.5 percent after the Wall Street

Journal published e-mails from company officials that suggested Merck knew about

the heart-attack risks of the arthritis drug years before the recall.

The stock has fallen almost 38 percent since Vioxx was recalled on

Sept. 30, its lowest since November 1995. The shares closed down $3.03, or 9.7

percent, at $28.28 on Monday.

" If the e-mails actually exist and say what they are purported to

say, they appear at least superficially to be a smoking gun that lawyers could

pull up as evidence against Merck, " said Trevor Polischuk, a drug analyst for

Orbimed Advisors.

Polischuk said the e-mails will encourage more patients to sue

Merck, claiming the $2.5 billion-a-year drug harmed them.

" But it will probably be very difficult for plaintiffs to prove

Vioxx hurt them because many patients probably had pre-existing heart problems, "

said Polischuk.

He said Merck shares have been " oversold, " and are now an

opportunity at a price that represents a 30 percent discount to stocks of rivals

-- based on projected company earnings.

An estimated 20 million Americans have taken Vioxx since it was

launched in 1999 because it caused fewer ulcers and gastrointestinal problems

than standard arthritis treatments.

The Journal said an e-mail dated March 9, 2000 suggested Merck

recognized Vioxx increased heart risk. The e-mail -- written by research chief

Scolnick -- said cardiovascular events " are clearly there. "

The article said another e-mail, written years ago by Merck research

executive Alise Reicin, suggested people at high risk be excluded from a trial

so the rate of cardiovascular problems of Vioxx patients and others " would not

be evident. "

Merck recalled Vioxx after it was shown to double the risk of heart

attack and strokes in patients that had taken it for over 18 months to prevent

recurrence of colon polyps.

On Friday, Merck -- citing documents that had been made public --

issued a statement saying it acted " responsibly and appropriately " in developing

and marketing Vioxx.

A Merck spokeswoman declined to comment on the stock decline, or say

whether its comments on Friday referred to the e-mails described in the Journal.

Mehta Partners analyst Shaojing Tong said the e-mails suggest Merck

withheld information. He said the company's financial liabilities could approach

the $16 billion already paid out by drug maker Wyeth following its 1997 recall

of two diet drugs used in the " fen-phen " diet cocktail.

" I previously had no reason to suspect misconduct by Merck. But the

e-mails move things one step closer to fen-phen in terms of misconduct and

hiding facts, " Tong said.

Tong said the company's now-decimated share price probably assumes

the company will eventually pay out $5 billion in Vioxx liabilities.

" If it becomes clear that the payout will grow to $15 billion or so,

the share price could fall another 5 or 10 percent, " Tong added.

Jon Fisher, fund manager at Fifth Third Bank, said there is no

reliable way to predict future product-liability costs.

" If it rises to $50 billion, Merck's stock could go a lot lower, "

said Fisher, who added it might wind up being only a fraction that amount.

Fisher, whose bank owns 2.5 million shares of Merck, said it is also

too early to assume the e-mails will incriminate Merck.

Standard & Poor's on Monday said it may cut its ratings on Merck,

citing increasing concern about possible litigation.

© Reuters 2004. All rights reserved. Users may download and print

extracts of content from this website for their own personal and non-commercial

use only. Republication or redistribution of Reuters content, including by

framing or similar means, is expressly prohibited without the prior written

consent of Reuters. Reuters and the Reuters sphere logo are registered

trademarks or trademarks of the Reuters group of companies around the world.

Close This Window

[Guest guest]

[Power Hour II] Merck Falls as E-Mails Suggest Vioxx Smoking Gun

I hope someone is keeping track of the short sales on the NYSE and AMEX as well

as the puts in the future markets. Someone could be making millions on the fall

of this stock. At least one analyst is suggesting Merck stock is a good buy

(opportunity) at its current price. (Someone has to cover those short sales.) -

JR

http://www.reuters.co.uk/newsArticle.jhtml?type=healthNews & storyID=6680076 & secti\

on=news

Print This Article Close This Window

Merck Falls as E-Mails Suggest Vioxx Smoking Gun

Mon November 01, 2004 04:28 PM ET

By Ransdell Pierson

NEW YORK (Reuters) - Merck & Co. Inc.'s Vioxx recall is mushrooming

into a product-liability nightmare that erased another $23 billion of the

company's valuation on Monday, but analysts said it will likely withstand the

crisis.

Merck shares fell as much as 10.5 percent after the Wall Street

Journal published e-mails from company officials that suggested Merck knew about

the heart-attack risks of the arthritis drug years before the recall.

The stock has fallen almost 38 percent since Vioxx was recalled on

Sept. 30, its lowest since November 1995. The shares closed down $3.03, or 9.7

percent, at $28.28 on Monday.

" If the e-mails actually exist and say what they are purported to

say, they appear at least superficially to be a smoking gun that lawyers could

pull up as evidence against Merck, " said Trevor Polischuk, a drug analyst for

Orbimed Advisors.

Polischuk said the e-mails will encourage more patients to sue

Merck, claiming the $2.5 billion-a-year drug harmed them.

" But it will probably be very difficult for plaintiffs to prove

Vioxx hurt them because many patients probably had pre-existing heart problems, "

said Polischuk.

He said Merck shares have been " oversold, " and are now an

opportunity at a price that represents a 30 percent discount to stocks of rivals

-- based on projected company earnings.

An estimated 20 million Americans have taken Vioxx since it was

launched in 1999 because it caused fewer ulcers and gastrointestinal problems

than standard arthritis treatments.

The Journal said an e-mail dated March 9, 2000 suggested Merck

recognized Vioxx increased heart risk. The e-mail -- written by research chief

Scolnick -- said cardiovascular events " are clearly there. "

The article said another e-mail, written years ago by Merck research

executive Alise Reicin, suggested people at high risk be excluded from a trial

so the rate of cardiovascular problems of Vioxx patients and others " would not

be evident. "

Merck recalled Vioxx after it was shown to double the risk of heart

attack and strokes in patients that had taken it for over 18 months to prevent

recurrence of colon polyps.

On Friday, Merck -- citing documents that had been made public --

issued a statement saying it acted " responsibly and appropriately " in developing

and marketing Vioxx.

A Merck spokeswoman declined to comment on the stock decline, or say

whether its comments on Friday referred to the e-mails described in the Journal.

Mehta Partners analyst Shaojing Tong said the e-mails suggest Merck

withheld information. He said the company's financial liabilities could approach

the $16 billion already paid out by drug maker Wyeth following its 1997 recall

of two diet drugs used in the " fen-phen " diet cocktail.

" I previously had no reason to suspect misconduct by Merck. But the

e-mails move things one step closer to fen-phen in terms of misconduct and

hiding facts, " Tong said.

Tong said the company's now-decimated share price probably assumes

the company will eventually pay out $5 billion in Vioxx liabilities.

" If it becomes clear that the payout will grow to $15 billion or so,

the share price could fall another 5 or 10 percent, " Tong added.

Jon Fisher, fund manager at Fifth Third Bank, said there is no

reliable way to predict future product-liability costs.

" If it rises to $50 billion, Merck's stock could go a lot lower, "

said Fisher, who added it might wind up being only a fraction that amount.

Fisher, whose bank owns 2.5 million shares of Merck, said it is also

too early to assume the e-mails will incriminate Merck.

Standard & Poor's on Monday said it may cut its ratings on Merck,

citing increasing concern about possible litigation.

© Reuters 2004. All rights reserved. Users may download and print

extracts of content from this website for their own personal and non-commercial

use only. Republication or redistribution of Reuters content, including by

framing or similar means, is expressly prohibited without the prior written

consent of Reuters. Reuters and the Reuters sphere logo are registered

trademarks or trademarks of the Reuters group of companies around the world.

Close This Window

[Guest guest]

[Power Hour II] Merck Falls as E-Mails Suggest Vioxx Smoking Gun

I hope someone is keeping track of the short sales on the NYSE and AMEX as well

as the puts in the future markets. Someone could be making millions on the fall

of this stock. At least one analyst is suggesting Merck stock is a good buy

(opportunity) at its current price. (Someone has to cover those short sales.) -

JR

http://www.reuters.co.uk/newsArticle.jhtml?type=healthNews & storyID=6680076 & secti\

on=news

Print This Article Close This Window

Merck Falls as E-Mails Suggest Vioxx Smoking Gun

Mon November 01, 2004 04:28 PM ET

By Ransdell Pierson

NEW YORK (Reuters) - Merck & Co. Inc.'s Vioxx recall is mushrooming

into a product-liability nightmare that erased another $23 billion of the

company's valuation on Monday, but analysts said it will likely withstand the

crisis.

Merck shares fell as much as 10.5 percent after the Wall Street

Journal published e-mails from company officials that suggested Merck knew about

the heart-attack risks of the arthritis drug years before the recall.

The stock has fallen almost 38 percent since Vioxx was recalled on

Sept. 30, its lowest since November 1995. The shares closed down $3.03, or 9.7

percent, at $28.28 on Monday.

" If the e-mails actually exist and say what they are purported to

say, they appear at least superficially to be a smoking gun that lawyers could

pull up as evidence against Merck, " said Trevor Polischuk, a drug analyst for

Orbimed Advisors.

Polischuk said the e-mails will encourage more patients to sue

Merck, claiming the $2.5 billion-a-year drug harmed them.

" But it will probably be very difficult for plaintiffs to prove

Vioxx hurt them because many patients probably had pre-existing heart problems, "

said Polischuk.

He said Merck shares have been " oversold, " and are now an

opportunity at a price that represents a 30 percent discount to stocks of rivals

-- based on projected company earnings.

An estimated 20 million Americans have taken Vioxx since it was

launched in 1999 because it caused fewer ulcers and gastrointestinal problems

than standard arthritis treatments.

The Journal said an e-mail dated March 9, 2000 suggested Merck

recognized Vioxx increased heart risk. The e-mail -- written by research chief

Scolnick -- said cardiovascular events " are clearly there. "

The article said another e-mail, written years ago by Merck research

executive Alise Reicin, suggested people at high risk be excluded from a trial

so the rate of cardiovascular problems of Vioxx patients and others " would not

be evident. "

Merck recalled Vioxx after it was shown to double the risk of heart

attack and strokes in patients that had taken it for over 18 months to prevent

recurrence of colon polyps.

On Friday, Merck -- citing documents that had been made public --

issued a statement saying it acted " responsibly and appropriately " in developing

and marketing Vioxx.

A Merck spokeswoman declined to comment on the stock decline, or say

whether its comments on Friday referred to the e-mails described in the Journal.

Mehta Partners analyst Shaojing Tong said the e-mails suggest Merck

withheld information. He said the company's financial liabilities could approach

the $16 billion already paid out by drug maker Wyeth following its 1997 recall

of two diet drugs used in the " fen-phen " diet cocktail.

" I previously had no reason to suspect misconduct by Merck. But the

e-mails move things one step closer to fen-phen in terms of misconduct and

hiding facts, " Tong said.

Tong said the company's now-decimated share price probably assumes

the company will eventually pay out $5 billion in Vioxx liabilities.

" If it becomes clear that the payout will grow to $15 billion or so,

the share price could fall another 5 or 10 percent, " Tong added.

Jon Fisher, fund manager at Fifth Third Bank, said there is no

reliable way to predict future product-liability costs.

" If it rises to $50 billion, Merck's stock could go a lot lower, "

said Fisher, who added it might wind up being only a fraction that amount.

Fisher, whose bank owns 2.5 million shares of Merck, said it is also

too early to assume the e-mails will incriminate Merck.

Standard & Poor's on Monday said it may cut its ratings on Merck,

citing increasing concern about possible litigation.

© Reuters 2004. All rights reserved. Users may download and print

extracts of content from this website for their own personal and non-commercial

use only. Republication or redistribution of Reuters content, including by

framing or similar means, is expressly prohibited without the prior written

consent of Reuters. Reuters and the Reuters sphere logo are registered

trademarks or trademarks of the Reuters group of companies around the world.

Close This Window

[Guest guest]

[Power Hour II] Merck Falls as E-Mails Suggest Vioxx Smoking Gun

I hope someone is keeping track of the short sales on the NYSE and AMEX as well

as the puts in the future markets. Someone could be making millions on the fall

of this stock. At least one analyst is suggesting Merck stock is a good buy

(opportunity) at its current price. (Someone has to cover those short sales.) -

JR

http://www.reuters.co.uk/newsArticle.jhtml?type=healthNews & storyID=6680076 & secti\

on=news

Print This Article Close This Window

Merck Falls as E-Mails Suggest Vioxx Smoking Gun

Mon November 01, 2004 04:28 PM ET

By Ransdell Pierson

NEW YORK (Reuters) - Merck & Co. Inc.'s Vioxx recall is mushrooming

into a product-liability nightmare that erased another $23 billion of the

company's valuation on Monday, but analysts said it will likely withstand the

crisis.

Merck shares fell as much as 10.5 percent after the Wall Street

Journal published e-mails from company officials that suggested Merck knew about

the heart-attack risks of the arthritis drug years before the recall.

The stock has fallen almost 38 percent since Vioxx was recalled on

Sept. 30, its lowest since November 1995. The shares closed down $3.03, or 9.7

percent, at $28.28 on Monday.

" If the e-mails actually exist and say what they are purported to

say, they appear at least superficially to be a smoking gun that lawyers could

pull up as evidence against Merck, " said Trevor Polischuk, a drug analyst for

Orbimed Advisors.

Polischuk said the e-mails will encourage more patients to sue

Merck, claiming the $2.5 billion-a-year drug harmed them.

" But it will probably be very difficult for plaintiffs to prove

Vioxx hurt them because many patients probably had pre-existing heart problems, "

said Polischuk.

He said Merck shares have been " oversold, " and are now an

opportunity at a price that represents a 30 percent discount to stocks of rivals

-- based on projected company earnings.

An estimated 20 million Americans have taken Vioxx since it was

launched in 1999 because it caused fewer ulcers and gastrointestinal problems

than standard arthritis treatments.

The Journal said an e-mail dated March 9, 2000 suggested Merck

recognized Vioxx increased heart risk. The e-mail -- written by research chief

Scolnick -- said cardiovascular events " are clearly there. "

The article said another e-mail, written years ago by Merck research

executive Alise Reicin, suggested people at high risk be excluded from a trial

so the rate of cardiovascular problems of Vioxx patients and others " would not

be evident. "

Merck recalled Vioxx after it was shown to double the risk of heart

attack and strokes in patients that had taken it for over 18 months to prevent

recurrence of colon polyps.

On Friday, Merck -- citing documents that had been made public --

issued a statement saying it acted " responsibly and appropriately " in developing

and marketing Vioxx.

A Merck spokeswoman declined to comment on the stock decline, or say

whether its comments on Friday referred to the e-mails described in the Journal.

Mehta Partners analyst Shaojing Tong said the e-mails suggest Merck

withheld information. He said the company's financial liabilities could approach

the $16 billion already paid out by drug maker Wyeth following its 1997 recall

of two diet drugs used in the " fen-phen " diet cocktail.

" I previously had no reason to suspect misconduct by Merck. But the

e-mails move things one step closer to fen-phen in terms of misconduct and

hiding facts, " Tong said.

Tong said the company's now-decimated share price probably assumes

the company will eventually pay out $5 billion in Vioxx liabilities.

" If it becomes clear that the payout will grow to $15 billion or so,

the share price could fall another 5 or 10 percent, " Tong added.

Jon Fisher, fund manager at Fifth Third Bank, said there is no

reliable way to predict future product-liability costs.

" If it rises to $50 billion, Merck's stock could go a lot lower, "

said Fisher, who added it might wind up being only a fraction that amount.

Fisher, whose bank owns 2.5 million shares of Merck, said it is also

too early to assume the e-mails will incriminate Merck.

Standard & Poor's on Monday said it may cut its ratings on Merck,

citing increasing concern about possible litigation.

© Reuters 2004. All rights reserved. Users may download and print

extracts of content from this website for their own personal and non-commercial

use only. Republication or redistribution of Reuters content, including by

framing or similar means, is expressly prohibited without the prior written

consent of Reuters. Reuters and the Reuters sphere logo are registered

trademarks or trademarks of the Reuters group of companies around the world.

Close This Window