Merck Pulls Vioxx Painkiller From Market, and Stock Plunges

The recall represents a big blow for Merck, with Vioxx accounting for $2.55 billion in sales in 2003. Merck's shares plunged this morning by more than $12, to as low as $32.46, when trading opened on the New York Stock Exchange, and the stock remained down by about 25 percent in morning trading - reducing the company's market capitalization by about $25 billion. Shares of Pfizer, maker of Celebrex, Vioxx's main competitor, were up $1.24 to $31.50, at the opening, but fell back to $30.50 as trading progressed.. The Vioxx cardiovascular risk came to light during a three-year trial to evaluate the drug's effect in helping patients with colon cancer, the company said. Merck found that after 18 months of treatment, patients taking Vioxx were at greater risk for heart attacks compared with those taking a placebo. At a news conference in New York this morning, Merck officials said they received the data last Friday and examined it over the weekend, consulting with various medical experts. Company officials informed the board of directors Tuesday morning, and later that day met with the F.D.A. to inform it of their intentions. The company then notified other regulatory agencies around the world. Vioxx has been a troubled drug for Merck for some time; in 2002, the company changed the label to include information on higher risks of heart attacks for Vioxx patients, compared with the risk in patients taking an older painkiller, naproxen. Moreover, the company's ocverall sales have been sluggish, and Merck is set to lose patent protection on its biggest-selling drug, the cholesterol fighter Zocor, in 2006. At the news conference, Mr. Gilmartin asserted that Merck remained "very strong financially." He said there would be no need to close any plants based on the action. "We had anticipated expanding the sales forces," he said. "This will allow us to redeploy our sales force instead of hiring new employees." But he acknowledged that he expected some people to leave the company. In reply to a question, he said he would not resign. Mr. Gilmartin said he expected earnings per share to be "negatively affected by 50 to 60 cents" a share, and as a result, the third-quarter earnings estimate would be scaled back. Merck officials declined to speculate on potential litigation against the company or the impact it might have. Mr. Gilmartin said Merck would undertake "many pro-active steps" to inform patients of the recall, including placing advertisements in newspapers. Information can be found on the Web sites merck.com and vioxx.com. The Merck clinical trial confirmed the findings of a Food and Drug Administration investigator who reported similar risks with the drug in August. The difference in heart risk was statistically significant between a recommended dose of Vioxx, 25 milligrams a day or less, and Celebrex, according to results that the investigator, Dr. David Graham, presented Aug. 25 at a conference in France of the International Society for Pharmacoepidemiology. The study also found that Vioxx doses in excess of 25 milligrams a day more than tripled the risk, compared with patients who had not taken painkillers within the past two months. He said his findings did not reflect the F.D.A.'s official position. The acting F.D.A. commissioner, Dr. Lester M. Crawford, said in a statement today: "Merck did the right thing by promptly reporting these findings to F.D.A. and voluntarily withdrawing the product from the market. "Although the risk that an individual patient would have a heart attack or stroke related to Vioxx is very small, the study that was halted suggests that, over all, patients taking the drug chronically face twice the risk of a heart attack compared to patients receiving a placebo." At the time of Dr. Graham's investigation, Merck disagreed with the results of the study, a spokeswoman, Mary Elizabeth Blake, said. Conclusions from that type of examination do not carry as much weight as results from a study comparing two groups of patients actually taking the medicines for a set period, she said. Vioxx was introduced in the United States in 1999 and has been marketed in more than 80 countries, Merck said. In some countries, the product is marketed under the trademark Ceoxx. Worldwide sales of Vioxx in 2003 amounted to roughly 11 percent of its $22.5 billion in sales that year. "While the cause of these results is uncertain at this time, they suggest an increased risk of confirmed cardiovascular events beginning after 18 months of continuous therapy," Peter S. Kim, president of Merck Research Laboratories, said in the Web site statement. "While we recognize that Vioxx benefited many patients, we believe this action is appropriate." NewYork Times http://www.nytimes.com/