Worldwide sales of Vioxx totaled $2.55 billion last year. Since
the introduction of the drug in 1999, 91 million Vioxx prescriptions
have been written in the United States alone. The drug is sold in
some countries under the name Ceoxx.
Merck is already gearing up for lawsuits over Vioxx. "We have
substantial defenses in these cases and will defend them
vigorously," said Kenneth Frazier, Merck's general counsel.
The setback comes at a particularly bad time for Merck, which is
struggling with anemic sales and profit growth, and is slated to
lose patent protection on its biggest selling drug, cholesterol
fighter Zocor, in 2006.
Vioxx was one of the company's "five key drivers for future
growth," said Sena Lund, an analyst at Cathay Financial.
Merck shares fell 27 percent in early trading on the New York
Stock Exchange (news
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web sites), wiping out more than $25 billion of market value.
Shares of Pfizer, which sells two rival arthritis drugs, edged
higher.
Merck Chairman and Chief Executive Raymond Gilmartin said he had
no intention of resigning.
Vioxx sales have been flat in recent years amid safety concerns.
Clinical trial data have shown the drug increased the incidence of
blood clots tied to strokes and heart attacks.
A recent study by the U.S. Food and Drug Administration suggested
patients taking Vioxx faced a 50 percent greater risk of heart
attacks and sudden cardiac death than those taking Pfizer's Celebrex
arthritis treatment.
Sales of the Pfizer arthritis drugs Celebrex and Bextra have
steadily grown as doctors have turned to those drugs, which have not
been linked to heart attack and stroke.
The colon cancer trial was designed to evaluate the effectiveness
of the standard 25-milligram Vioxx dose in preventing recurrence of
colon polyps. Such polyps sometimes become cancerous.
Vioxx was used in the colon cancer trial because some researchers
theorize that inflammation, present in arthritis, may be linked to
colon cancer.
Merck said the heart attacks and strokes were not spotted during
the first 18 months of the trial but became apparent later.
"Given the availability of alternative therapies, and the
questions raised by the data, we concluded that a voluntary
withdrawal (of Vioxx) is the responsible course to take," Merck
chief Gilmartin said.
Merck said it remains comfortable with its earnings forecast for
full-year 2004 of $3.11 to $3.17 per share.
It expects the recall to drag down earnings by 50 cents to 60
cents per share because of lost sales and costs of the recall, but
is uncertain when those costs will be recorded.
Therefore, Merck said it is retracting its third-quarter earnings
forecast. The company said it would provide more financial details
about the recall when it reports third-quarter earnings on Oct. 21.
Vioxx and the two Pfizer drugs are designed to block inflammation
and pain as effectively as standard nonsteroidal anti-inflammatory
drugs such as aspirin and ibuprofen, while causing far fewer ulcers
and gastrointestinal problems than the older treatments.
The newer medicines block a protein called Cox-2 that has been
linked to inflammation.
Merck said it would continue to market Arcoxia, its newer Cox-2
treatment that is sold in 47 countries. Approval of Arcoxia in the
United States has been delayed by concerns among U.S. regulators
about whether it poses the same risk of heart attack and stroke as
Vioxx. (Additional reporting by Toni Clarke and Edward Tobin)
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