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Victory for Merck in Vioxx ruling
Merck won a crucial legal victory on Thursday and removed a cloud that had been hanging over the US drugmaker and its investors over the withdrawn painkiller Vioxx.
The New Jersey Supreme Court overturned lower court rulings granting class-action status for a lawsuit representing insurance companies and healthcare systems that bought Vioxx for patients.
The lawsuit, brought by a local engineers' labour union benefits fund, sought class-action status so insurers and payers nationwide could participate in the suit. Some Wall Street analysts had expected the class action to seek possible damages of at least $10bn.
But following Merck's appeal, the state's highest court ruled unanimously that the lawsuit could not be a class action case, because each insurer or payer used different information and facts.
John Beisner, Merck's lead lawyer on the case, said: "It is a very important win for the company. The ruling does put an end to this class action. Any class action represents a significant threat."
It was also the most threatening class-action case still immediately pending for Merck, after a federal judge overseeing national Vioxx litigation in November denied class-action status for individual patients.
Shares in Merck rose 2.2 per cent at $50.47, in New York on Thursday.
The group withdrew the controversial painkiller from the market three years ago, after a company study showed it increased the risk of heart attack and stroke.
It still faces about 27,000 lawsuits claiming injury from Vioxx, many of which are pending in state court in New Jersey, where Merck is based. It has been successful so far in its strategy to fight each case individually in court, claiming its science was rigorous and it did not mislead people on Vioxx's risks.
Tony Butler, analyst at Lehman Brothers, said the ruling was a "positive for Merck" but it "will still continue to litigate cases individually".
Since Vioxx was withdrawn, Merck also has pushed to turn around and reignite sales and profit growth. Hope has emerged with the launch of several drugs, and this week's US recommendation for approval of the group's new HIV drug, Isentress.
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