Take Merck, Pfizer on a Strong Stomach

On Tuesday, Evans didn't provide any numbers, and he didn't provide any encouragement to investors who might think Merck dodged a bullet with the FDA advisory panels' vote supporting Vioxx.

"Even if Vioxx returns, we don't see a change in product liability," he said in a research report. "Plaintiffs have to show two things: that they were harmed by the product and that the manufacturer failed to warn."

Because the FDA panel members agree that Vioxx raises the risk of cardiovascular injury, plaintiffs' lawyers have ammunition to support their case, said Evans, who has market perform ratings on Merck and Pfizer. "Whether Merck warned adequately is an entirely historic question, which as an objective matter of law is unaffected by whether the product returns," he said.

Evans added that Bextra's fate is "potentially linked" to Vioxx, given the close FDA panel votes on both drugs. "We don't think FDA wants to see Vioxx come back," he said. "If FDA leaves Bextra on [the market], it's tough not to let Vioxx back in. If the FDA opens the door to Vioxx, they potentially open the door to a political beating."

Evans's bottom line is that Bextra and Vioxx have a "slightly less than even odds of remaining on the market." (Evans doesn't own shares; his firm has had non-investment-banking relationships with Merck and Pfizer.)

Legal, Marketing Strategies

The companies' legal strategies will be linked to their marketing plans, and some analysts suggest that Merck might need a chiropractor to straighten out its logic with regard to Vioxx.

"Leading up to the climactic decision, Merck astonished most observers, and some panel members ... with its statement that Vioxx could re-enter the market," said David Moskowitz of Friedman Billings Ramsey, in a Tuesday research report.