Just noticed it on CNN
Merck withdraws arthritis drug Vioxx
Drugmaker said ongoing trial shows the medication raises risk of heart attack, strokes.
September 30, 2004: 9:17 AM EDT
NEW YORK (CNN/Money) - Drugmaker Merck & Co. announced an immediate voluntary worldwide withdrawal Thursday of its arthritis drug Vioxx.
The Whitehouse Station, N.J.-based drugmaker said in a release that the decision was based on a three-year colon cancer clinical trial that showed the drug raised the risk of cardiovascular complications in patients who have been taking the drug beginning after 18 months of the cancer treatment.
Shares of Merck (MRK: Research, Estimates) fell 21 percent in premarket trading on the INET electronic brokerage.
Merck also slashed its full-year earnings estimate, saying it expects Vioxx's withdrawal to negatively impact earnings per share by 50 cents to 60 cents a share.
Prior to Thursday's announcement, the company had forecast profit for the full year between $3.11 to $3.17 a share. Analysts had forecast a profit of $3.14 a share for the year, according to First Call.
The company also retracted its third-quarter earnings guidance. Analysts has expected Merck to earn 82 cents a share in the period.
"This is a major blow for Merck because Vioxx was one of their five key drugs," said Sena Lund, analyst with Cathay Financial. "The implications of this are that now the company will have to depend on lesser drugs to boost sales."
According to Lund, Merck was anticipating total worldwide sales of Vioxx this year to reach between $2.8 billion and $3 billion dollars.
Said Lund, "This news also puts pressure on Merck to get approval for Arcoxia, the second-version of Vioxx which is already in the market overseas."
Vioxx's withdrawal, however, could be good news for drugmaker Pfizer (PFE: Research, Estimates) and its arthritis medication Celebrex, Lund said.
"We are taking this action because we believe it best serves the interests of patients," Merck CEO Raymond V. Gilmartin, said in a statement.
"Although we believe it would have been possible to continue to market Vioxx with labeling that would incorporate these new data, given the availability of alternative therapies, and the questions raised by the data, we concluded that a voluntary withdrawal is the responsible course to take," Gilmartin said.
Merck launched Vioxx in the United States in 1999 and it has been marketed in more than 80 countries. The drug's worldwide sales in 2003 were $2.5 billion.
With regard to Arcoxia, which is already marketed in 47 countries outside of the United States, Merck said it would continue to seek approval to market the medication in the United States.
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