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Tester32 · 09-11-2004, 14:00

By Robert Steyer
TheStreet.com Staff Reporter
11/9/2004 8:16 AM EST
Updated from Nov. 8

Merck (MRK:NYSE - commentary - research) shares were near their 52-week intraday low in early trading Tuesday after the company late Monday revealed that it is the subject of a criminal investigation by the Justice Department concerning events leading up to the removal of the arthritis drug Vioxx from the market on Sept. 30.

In addition, Merck said that it is the subject of an "informal inquiry" about Vioxx by the Securities and Exchange Commission.

In premarket trading, the stock was off 76 cents, or 2.9%, to $25.81.

The company revealed the developments in a quarterly filing with the SEC after markets had closed on Monday. Merck previously said it was removing the arthritis drug from the market because tests showed long-term use of Vioxx -- more than 18 months -- showed a greater cardiovascular risk among Vioxx patients than among people who took a placebo.

Merck said Monday that it had received a subpoena from the Justice Department relating to the "research, marketing and selling activities" in an investigation "under criminal statutes."

Merck, which provided few details in its quarterly filing, said it was told by the SEC staff that the commission was beginning an informal inquiry.

Merck said it would cooperate with the Justice Department and the SEC.

"The company cannot predict the outcome of these inquiries," Merck said. "However, it is possible that highly unfavorable outcomes, including a potential civil disposition from the SEC and/or potential civil or criminal dispositions from the Justice Department, could have a material adverse effect on the company's financial position, liquidity and results of operations."

Merck's potential legal bill for Vioxx is getting as much, if not more, attention on Wall Street than its products and its research efforts.

Standard & Poor's said recently that it was putting Merck's corporate credit and unsecured debt ratings on its CreditWatch list "with negative implications," thus placing Merck's AAA credit rating in jeopardy, because of increasing concern about the "magnitude of possible litigation" due to Vioxx.

09-11-2004, 14:00	#53
Tester32 TBB Family Registriert seit: Jan 2004 Beiträge: 2.209	Merck Falls on Word of Federal Probes Over Vioxx By Robert Steyer TheStreet.com Staff Reporter 11/9/2004 8:16 AM EST Updated from Nov. 8 Merck (MRK:NYSE - commentary - research) shares were near their 52-week intraday low in early trading Tuesday after the company late Monday revealed that it is the subject of a criminal investigation by the Justice Department concerning events leading up to the removal of the arthritis drug Vioxx from the market on Sept. 30. In addition, Merck said that it is the subject of an "informal inquiry" about Vioxx by the Securities and Exchange Commission. In premarket trading, the stock was off 76 cents, or 2.9%, to $25.81. The company revealed the developments in a quarterly filing with the SEC after markets had closed on Monday. Merck previously said it was removing the arthritis drug from the market because tests showed long-term use of Vioxx -- more than 18 months -- showed a greater cardiovascular risk among Vioxx patients than among people who took a placebo. Merck said Monday that it had received a subpoena from the Justice Department relating to the "research, marketing and selling activities" in an investigation "under criminal statutes." Merck, which provided few details in its quarterly filing, said it was told by the SEC staff that the commission was beginning an informal inquiry. Merck said it would cooperate with the Justice Department and the SEC. "The company cannot predict the outcome of these inquiries," Merck said. "However, it is possible that highly unfavorable outcomes, including a potential civil disposition from the SEC and/or potential civil or criminal dispositions from the Justice Department, could have a material adverse effect on the company's financial position, liquidity and results of operations." Merck's potential legal bill for Vioxx is getting as much, if not more, attention on Wall Street than its products and its research efforts. Standard & Poor's said recently that it was putting Merck's corporate credit and unsecured debt ratings on its CreditWatch list "with negative implications," thus placing Merck's AAA credit rating in jeopardy, because of increasing concern about the "magnitude of possible litigation" due to Vioxx.