You know that FDA panel recommendation that Rich keeps talking about? It was a 17-15 vote -- hardly a rousing endorsement of Vioxx's safety. Furthermore, even if Vioxx returns to the market, how eager do you think doctors are going to be to prescribe it -- or patients to take it?
Oh, and another thing. That argument about how a return to the market will reduce the likelihood that Merck
And notice how Rich didn't say anything about the weak pipeline or the low future growth rates? Yeah, I did, too.
Unless it engages in M&A activities (something Merck historically doesn't do), a pharmaceutical company is no stronger than its pipeline. Weak pipeline, weak prospects. And Merck's late-stage pipeline is quite weak indeed.
And last but not least, we again hear the canary approach to investing -- cheap! cheap! Yes, Merck trades at 13 times trailing earnings -- one of the lowest in the group. But when you look at forward earnings multiples, Merck is right there again at 13 (like I said, no growth) -- on par with Pfizer
Want to read the opposing viewpoint? Check out Rich Smith's original argument. Also read Stephen Simpson's original argument , as well as Rich Smith's rebuttal . Merck is an active stock recommendation in our Income Investor newsletter service. Check outthe latest dealfor new subscribers. Motley Fool Inside Valuehas recommended Pfizer.
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Fool contributor Stephen Simpson owns shares of Sanofi Aventis. The Motley Fool has a disclosure policy.
