With all the brouhaha over Vioxx in the news, it might be easy to forget that there's still an ongoing business over at Merck
Merck saw reported sales drop by about 2% in the third quarter as the absence of Vioxx made a definite dent in performance. While the company's cholesterol-fighting joint venture with Schering-Plough
Despite some challenges on the sales front, the company did OK on the operating items. Margins actually improved a bit, and the company was able to post 10% pre-tax profit growth and 7% net income growth for the quarter. Helping matters was good growth in equity income from affiliates, as pre-tax income would have been roughly flat if the company had duplicated last year's performance.
You can't talk about Merck without mentioning the Vioxx litigation, but there's really not that much new to say. The number of cases filed has increased (again) to more than 6,000, and more could still be on the way. Although there will probably be lots of flashy headlines over the coming years about both wins and losses, I wouldn't pay too much attention to them individually. Barring a mass settlement (which, thus far, Merck has said it won't do), it will take literally years for the cases and related appeals to sort themselves out in courts across the country.
Not helping matters right now, Merck has also learned that the FDA wants more data on Pargluva, the dual-PPAR drug for Type 2 diabetes that will be marketed with Bristol Myers Squibb
Merck has some good products in development, but it will be hard to post solid growth with some major patent expiries approaching. Accordingly, this stock really isn't my cup of tea. Nevertheless, there's a good dividend here, and as both Wyeth
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).