Updated from 1:47 p.m. ESTMerck ( MRK ) Friday took a double hit. The company said the Securities and Exchange Commission is now formally investigating its withdrawal of the painkiller Vioxx while the drugmaker suffered an unfavorable patent ruling on its second-most-popular drug. Shares fell about 10%. "This action was not unexpected and the company will continue to cooperate with the SEC," Merck said of the change in status. Heretofore, the agency probe had been classified as informal. The New Jersey-based drugmaker withdrew Vioxx from the market on Sept. 30 after a clinical study showed it raised the risk of heart attacks in some patients. In reporting fourth-quarter earnings Tuesday, Merck said it had taken a charge of $604 million during the fourth quarter of 2004 as a reserve to cover litigation expenses related to the withdrawal. Merck also said the number of Vioxx-related lawsuits as of Dec. 31 had grown to 575, which include some 1,400 plaintiff groups alleging personal injuries caused by the arthritis drug. The company also has been named as defendant in some 70 class-action suits relating to personal injury claims. The company has been named as a defendant in 30 lawsuits involving claims of violations of federal securities laws and laws governing employee retirement plans Despite the Vioxx controversy, the company reported a profit of $1.1 billion, or 50 cents a share, on revenue of $5.75 billion. The consensus view of analysts polled by Thomson First Call was a profit of $1.12 billion, or 50 cents a share, on revenue of $5.32 billion. In an unrelated development Friday, a federal appeals court ruled that Merck's osteoporosis drug, Fosamax, will lose its U.S. patent protection by early 2008, some 10 years earlier than expected. Merck said it "disagrees with the opinion" and is "considering its options." Merck recently forecast Fosamax sales of $3.3 billion to $3.6 billion. Sales grew 18% to $3.2 billion last year. Merck shares fell $3.04, or 9.7%, to $28.14. Some 41 million shares had changed hands, compared with the average daily volume of about 18 million. Shares hit a 52-week low of $25.60 in the wake of the Vioxx recall. They closed at $44.46 the day before the announcement.