Who Will Gain From Merck's Vioxx Loss

Do you buy Pfizer (PFE - commentary - Cramer's Take) now? Or do you buy semiconductors because they don't kill you?

All over hedge fund America, right now, managers are debating the fallout of Merck's (MRK - commentary - Cramer's Take) withdrawal of its former blockbuster arthritis drug, Vioxx. But they're not debating in the way you'd think. The index funds and the slow funds own Merck; the average hedge fund's probably short the darned thing. We know Pfizer's Celebrex doesn't have the problems, or do we? Pfizer always has published all of its studies, right? Hasn't it?

I think hedge fund America will find Pfizer too risky and instead will continue to pile headlong, not into tech, but into the device companies, because that's where the pharma money's gone all year. I predict that Merck's loss will be the gain of:

Guidant (GDT - commentary - Cramer's Take)
Boston Scientific (BSX - commentary - Cramer's Take)
St. Jude (STJ - commentary - Cramer's Take), and
for the chicken-pharmas, Johnson & Johnson (JNJ - commentary - Cramer's Take).

Of course, this cohort will gain, too:

Biogen Idec (BIIB - commentary - Cramer's Take)
Amgen (AMGN - commentary - Cramer's Take)
Genentech (DNA - commentary - Cramer's Take) and
Gilead (GILD - commentary - Cramer's Take).

But here's the $50 billion question. How many people died of heart attacks because their necks or backs ached and they took Vioxx?

I have the answer: Enough to bankrupt Merck when they are finished suing this once-great company, which I have been labeling a perma-dweller in the Danger Zone on my radio show for a year now on radio.

Random musings: I will be rolling out an exclusive Danger Zone list at my upcoming Financial Fair, including one pick where I think puts are warranted. You want to be there. It's less than two weeks away, so you'd better get your act together and go. Click here for more information and to sign up. ... Money managers are rejoicing that they now will look better than the DJIA because Merck's main impact could be minus-35 for the clunky old average.

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James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS by clicking here. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to [e-mail]. Listen to Cramer's RealMoney Radio show on your computer; just click here. Click here to buy Cramer's latest book, "You Got Screwed!" Click here to order Cramer's autobiography, "Confessions of a Street Addict."