Merck Rebounds: Friday's Action
As I said last week, my dad got his ass got burned on Merck stock, having owned it at $40, riding it to the mid $70s then watching it crash to the ground after the Vioxx scandal. His broker down in Florida sold on that day. Now it seems things are a bit brighter for the drug darling of the nineties--Vioxx may return to the market. Nevertheless, I don't want to own that stock in the near term--earnings should still suffer from lower than expected revenues, generic competition, and patent infringement. Have a good weekend guys.Merck's withdrawn arthritis drug Vioxx may return to the market after U.S. health advisers on Friday narrowly voted it was safe enough to be sold despite an increased risk of heart attack and stroke. The 17-15 vote on Vioxx's safety to go to market electrified Merck shares, which closed up 13 percent It was a stunning turnaround for Vioxx, which was withdrawn in September by Merck after a study showed Vioxx doubled heart attack and stroke risk compared to a placebo. John Boris, an analyst with Harris Nesbitt, said Merck's stock rally "signals that Wall Street expects Vioxx to return to drugstores and that it has potential to achieve annual sales in the $1 billion range." That's far below the $2.5 billion in annual sales Vioxx had before it was withdrawn in late September. Even so, Boris said the lower level of sales would be a boon to Merck, whose earnings were expected to fall this year because of the loss of Vioxx.
<< Home