Merck still in “attack the victims” mode
Despite losing the Texas trial and with cries from all quarters that Merck better settle the lawsuits out of court, the company refuses to budge. “We are steadfast in our legal strategy. Our legal strategy is consistent with the Company’s overall strategy – it is responsible and based in sound science. We believe we have meritorious defenses and we intend to vigorously defend individual Vioxx cases one by one,” asserts once again Kenneth Frazier, Senior Vice President and General Counsel Of Merck.
Almost all analysts are saying that Merck has a flawed strategy and if it continues down this path, it will lose each and every case. The paper trail, the lack of preparation of its own witnesses, arrogance during trial, and public statements that only infuriate Vioxx victims and attorneys – the company also appears to have a serious image problem.
Investors lose faith in Merck
The bolder the statements from Merck, the more the investors have run away from the stock, fueling talks of bankruptcy and problems ahead. David Moskowitz at Friedman, Billings, Ramsey & Co. has raised his forecast from $11 billion to up to $50 billion. And so has Al Rauch at A.G. Edwards who estimates the liabilities to be between $25 and 50 billion. Merrill Lynch analyst David Risinger has an estimate of $4 billion to $18 billion. In an analysis by iProceed, the Merck’s Vioxx liabilities add up to approximately $65 billion if the verdict in Carol Ernst vs. Merck is any indication of what is to come.
Despite such dire forecasts, the company is very optimistic about its future. “While we are disappointed with the verdict, this decision should be put it in its appropriate context. This is the first of many trials. Each case has a different set of facts. Regardless of the outcome in this single case, the fact remains that plaintiffs have a significant legal burden in proving causation,” adds Frazier.
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