Merck's Pain Persists

Updated from Aug. 19

For Merck (MRK), the side effects from Vioxx just got a whole lot worse.

The giant drugmaker suffered a painful legal setback Friday, when a Texas jury held the company liable for the death of a Vioxx user and ordered it to pay $253 million in damages as a result. On Monday, shares in Merck fell 1.5%, adding to a 7.7% plunge late Friday. Monday morning, Merck was down 42 cents to $27.63.

The verdict could simply be the first blow of many for the company, which still faces thousands of lawsuits carrying tens of billions of dollars in potential damages.

Plaintiffs have accused Merck of knowingly concealing heart risks associated with Vioxx, which ranked as one of the company's best-selling drugs before its voluntary withdrawal last year. Merck has denied any wrongdoing and pledged to defend each suit on its merits.

For its part, Merck had hoped to win its first trial by proving to a jury in Texas -- typically known for conservative courtroom decisions -- that Vioxx did not cause the victim's death. However, several lawyers with Vioxx plaintiffs of their own called the evidence against the company "overwhelming" and expressed absolutely no surprise at the jury's decision, its speed in reaching it and the huge damages that resulted.

"This just tells me -- and should tell everybody -- that a jury of 12 people didn't buy anything Merck had to say," said Don Strong, whose Oklahoma City law firm is handling more than 2,000 Vioxx cases that should begin to go to trial next year. Even so, "the company will more than likely have to take another hit or two before it finally realizes that the garbage it has been throwing up in the news and as a defense is just that -- garbage. Nobody's going to buy it."

Chris Seeger, whose New York law firm began suing Merck even before the company withdrew Vioxx from the market, is eager to throw the next punch. In less than a month, Seeger is scheduled to present the case of Mike Humeston -- a healthy Purple Heart recipient who suffered a sudden heart attack -- before a jury in "incredibly mainstream" New Jersey. He says that Merck "has got a little more on its hands" with that case than it did with its current one.