Merck loses Vioxx case, told to pay 51 million dollars

EW ORLEANS, Aug 18 (Reuters) A federal jury on Thursday found that Merck&Co. Inc. was negligent and knowingly made misrepresentations about its withdrawn pain medicine Vioxx, and awarded 51 million dollars to the plaintiff.

The jury, in the second federal trial involving a Vioxx product-liability lawsuit, found Merck had knowingly misrepresented or failed to disclose a material fact to the plaintiff's physicians, and that doctors in the case and the plaintiff himself were not at fault.

The plaintiff, Gerald Barnett, a 62-year-old retired FBI agent who had a heart attack in 2002 after taking Vioxx for 31 months, was awarded 50 million dollars yesterday in compensatory damages and 1 million dollars in punitive damages.

Barnett, who used Vioxx for pain caused by a car accident, is a resident of South Carolina, where the suit was originally filed and which limits punitive awards.

Merck has now lost four cases and won five in its defense of Vioxx. The pain and arthritis drug had annual sales of 2.5 billion dollars before it was recalled in 2004 after a clinical trial showed it doubled the risk of heart attack among people taking if for more than 18 months..

''This verdict will remind people that Merck still faces significant potential financial liability for Vioxx, which could wind up being at least 5 billion dollars in the long run,'' said Shaojing Tong, an analyst with Mehta Partners.

Even so, Tong said he was not overly concerned with the jury award because Merck will likely appeal the verdict and size of the judgment.

He noted that Merck has still won a majority of the jury verdicts, and will therefore likely stick to its strategy of fighting each case one by one, rather than attempting to conclude a costly national settlement with plaintiffs.

Money manager David Dreman, whose Merck shares form a major holding of his 17 billion dollars portfolio, said the verdict was not all that surprising because New Orleans juries have a history of favoring plaintiffs over companies.

''This one is coming from a district that has always been anti-corporate,'' said Dremen, who predicted the judgment will ''probably get knocked down on appeal.'' Merck shares were down 1.1 per cent, or 47 cents, to 40.71 dollars in late-morning activity on the New York Stock Exchange, after touching as low as 40.30 dollars.

The stock plunged when Vioxx was recalled two years ago, but has not reclaimed almost all lost ground due to earlier favorable Vioxx verdicts and enthusiasm for the company's new Gardasil cervical cancer vaccine and its experimental Januvia diabetes treatment.

Merck shares have risen about 28 per cent this year, outperforming about an 8 per cent rise for the American Stock Exchange Pharmaceutical Index .DRG> of large drug makers.

REUTERS AB BS1028