Take Merck, Pfizer on a Strong Stomach

Having had time to assess the changing landscape for Cox-2 arthritis drugs, Wall Street analysts appear glad to accept lower sales in return for lower legal risks at Merck(MRK Quote) and Pfizer(PFE Quote).

The big question: Will Friday's news change the legal climate surrounding these drugs, especially Merck's Vioxx? There's still a long medical, legal and political path between the advisory committees' votes last week -- endorsing Vioxx and Pfizer's Celebrex and Bextra -- and the Food and Drug Administration's final decision.

The agency doesn't always follow the recommendations of its advisory panels, and the close votes on Vioxx (17-15) and Bextra (17-13 with two abstentions) certainly raise questions among investors as well as doctors and patients. Celebrex was supported by a 31-1 vote. ...