Merck to Settle Vioxx Lawsuits
"We have done everything humanly possible to ensure that it actually resolves the vast majority of myocardial infarction and ischemic stroke cases, to close the doors to new filings and to guard against fraud," said General Counsel Bruce Kuhlik.
Payment to individual claimants could start as early as next August. Merck said it expects to record a fourth-quarter pretax charge of $4.85 billion to cover the cost of the agreement. The company expects the charge will be tax deductible.
Natixis Bleichroeder analyst Jon LeCroy said he expects the payment to reduce interest income by about $200 million a year going forward. Also updating his predictions for Merck's Gardasil, he noted, "For 2007 and 2008, interest income losses offset the vaccine increases, leading to lower EPS estimates. For 2009-2011, however, the vaccine increases more than offset lower interest income and EPS increase."
LeCroy has a buy rating and is now looking for 2007 EPS of $3.15, a penny lower than his previous estimate, and $3.46, $3.79 and $4.26 in '08, '09 and '10, respectively. Prior estimates were for $3.50, $3.74 and $4.21 for 2008-2010.For Trotta's video take on Merck's Vioxx settlement, click here.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV