Comments on: Vioxx Gives Merck Some Pain http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/ Special situation stocks and value investing Sat, 19 Jul 2008 20:23:26 +0000 http://wordpress.org/?v=2.3.3 By: Merck Performance Details - Fat Pitch Financials http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-169336 Merck Performance Details - Fat Pitch Financials Thu, 08 Nov 2007 04:51:05 +0000 http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-169336 [...] to Marketocracy, I had a total return of 76.89% on the 5,000 shares of Merck purchased on October 4, 2004.   The appreciation in share price alone was 63.19%.  The year-to-date return on Merck price [...] […] to Marketocracy, I had a total return of 76.89% on the 5,000 shares of Merck purchased on October 4, 2004.   The appreciation in share price alone was 63.19%.  The year-to-date return on Merck price […]

]]> By: Fat Pitch Financials Portfolio Performance Update - Fat Pitch Financials http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-39528 Fat Pitch Financials Portfolio Performance Update - Fat Pitch Financials Wed, 06 Dec 2006 11:34:26 +0000 http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-39528 [...] MERCK & CO [...] […] MERCK & CO […]

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]]> By: JERRY WoW http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-16503 JERRY WoW Mon, 16 Oct 2006 06:28:07 +0000 http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-16503 ... Only thing that i know is " I just bought & bought when Merck downed to $27. An d bought it up again when the prices down. So, if you are value investor, you probably wont miss this chance. ... I'm absoluetly one of the buffettology. Now, i'm enjoying Merck at $42 and 5% dividend yield. SWEET !!!! JERRY WoW … Only thing that i know is ” I just bought & bought when Merck downed to $27. An d bought it up again when the prices down. So, if you are value investor, you probably wont miss this chance.

… I’m absoluetly one of the buffettology. Now, i’m enjoying Merck at $42 and 5% dividend yield. SWEET !!!!

JERRY WoW

]]> By: Fat Pitch Financials » Blog Archive » $253.4 Million Verdict in First Merck Vioxx Trial http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-131 Fat Pitch Financials » Blog Archive » $253.4 Million Verdict in First Merck Vioxx Trial Sat, 20 Aug 2005 18:42:20 +0000 http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-131 [...] I know it is likely that on appeal the damage award will be reduced substantially or even thrown out. However, the jury’s verdict does affect my estimate of the potential total financial liability Merck will face as a result of Vioxx. I originally felt that it was very unlikely that the total damages from Vioxx could exceed $10 billion; however, I’m not so confident now. I will also be a lot more cautious in the future when looking for value investments in companies with medical liabilities. I think I remember Charlie Munger also recently warning of the dangers of huge legal costs associated with medical liabilities. I should have taken his warning a bit more seriously. Maybe that is why we haven’t seen Warren Buffett and Charlie Munger investing in depressed stock of drug companies. For now, I will be holding on to the Merck stock I purchased last year, and I’ll be waiting to hear how the appeal of this case turns out. [...] […] I know it is likely that on appeal the damage award will be reduced substantially or even thrown out. However, the jury’s verdict does affect my estimate of the potential total financial liability Merck will face as a result of Vioxx. I originally felt that it was very unlikely that the total damages from Vioxx could exceed $10 billion; however, I’m not so confident now. I will also be a lot more cautious in the future when looking for value investments in companies with medical liabilities. I think I remember Charlie Munger also recently warning of the dangers of huge legal costs associated with medical liabilities. I should have taken his warning a bit more seriously. Maybe that is why we haven’t seen Warren Buffett and Charlie Munger investing in depressed stock of drug companies. For now, I will be holding on to the Merck stock I purchased last year, and I’ll be waiting to hear how the appeal of this case turns out. […]

]]> By: Roberto http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-9 Roberto Wed, 31 Dec 1969 19:00:00 +0000 http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-9 I have to completly disagree with your Merck analysis. first of all if Kerry wins, you can forget about this stock going anywhere. Kerry has been gaining in polls and I do believe this country wants a change in the oval office. Second, nobody knows what the litigation risk to Merck truely will be. My guess is that with enough deaths it could bankrupt this company. Third, the problem with that Barron's article is that guy who was being quoted had a big position in Merck. What do you think he is going to say? Fourth, the warning label I think could be what hurts this company. The fact they knew and may have been lazy about there testing could hurt them huge with the tort bar. Also, there was an article in the New England Journal Of Medicine that talked about these exact problems a few years ago. I will give you one more. Canada! The importation of drugs from Canada is inevitable. Merck is a $25 stock waiting to happen. I have to completly disagree with your Merck analysis. first of all if Kerry wins, you can forget about this stock going anywhere. Kerry has been gaining in polls and I do believe this country wants a change in the oval office. Second, nobody knows what the litigation risk to Merck truely will be. My guess is that with enough deaths it could bankrupt this company. Third, the problem with that Barron’s article is that guy who was being quoted had a big position in Merck. What do you think he is going to say? Fourth, the warning label I think could be what hurts this company. The fact they knew and may have been lazy about there testing could hurt them huge with the tort bar. Also, there was an article in the New England Journal Of Medicine that talked about these exact problems a few years ago. I will give you one more. Canada! The importation of drugs from Canada is inevitable. Merck is a $25 stock waiting to happen.

]]> By: George http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-10 George Wed, 31 Dec 1969 19:00:00 +0000 http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-10 Roberto, thank you for sharing your opinion regarding my Merck analysis. However, I think many of your points are a bit short sighted.<br /><br />First, it is very unlikely that the election of Kerry will drive the future price of Merck. The President has very little power to impact a particular industry. Congress is the real power for creating laws in DC.<br /><br />Second, while know one knows the exact litigation risk to Merck, there are ways to bound the problem. I think it is very unlikely that the total litigation risk is greater than $1 billion. It is truely amazing the amount of cash that a company like Merck generates. The litigation will hurt the bottom line for a few years, but it will not be a long term cost to the company.<br /><br />Finally, I really don't think drug imports from Canada will impact Merck in the long run. Sooner or later drug companies will start to put the squeeze on the supply of drugs to Canada if the importation of drugs into the U.S. continues to grow.<br /><br />You might be right that Mr. Market will panic and drive Merck down to $25. I'll be happy to buy more at that price, but three years or more from now there is a real good probability that Merck will be climbing back to it's former highs. Roberto, thank you for sharing your opinion regarding my Merck analysis. However, I think many of your points are a bit short sighted.

First, it is very unlikely that the election of Kerry will drive the future price of Merck. The President has very little power to impact a particular industry. Congress is the real power for creating laws in DC.

Second, while know one knows the exact litigation risk to Merck, there are ways to bound the problem. I think it is very unlikely that the total litigation risk is greater than $1 billion. It is truely amazing the amount of cash that a company like Merck generates. The litigation will hurt the bottom line for a few years, but it will not be a long term cost to the company.

Finally, I really don’t think drug imports from Canada will impact Merck in the long run. Sooner or later drug companies will start to put the squeeze on the supply of drugs to Canada if the importation of drugs into the U.S. continues to grow.

You might be right that Mr. Market will panic and drive Merck down to $25. I’ll be happy to buy more at that price, but three years or more from now there is a real good probability that Merck will be climbing back to it’s former highs.

]]> By: Roberto http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-11 Roberto Wed, 31 Dec 1969 19:00:00 +0000 http://www.fatpitchfinancials.com/27/vioxx-gives-merck-some-pain/#comment-11 There is an old saying on wall street, never catch a falling kneife. More news keeps coming out that is only going to drive Merck out of business. Today there were press releases that stated Merck could have anywhere from 30,000 to 100,000 heart attack lawsuits. Oh and you can bet that the market will factor in a Kerry win which everyone on the street knows will just kill the drug stocks. Also, Merck has one of the worst pipelines around. I also don't care how much cash they generate, cuase that cash will be soon in the hands of laywers. The facts are that Merck spent 100's of millions on advertising Voixx, yet ignored the warnings of many doctors about the risks of this drug for years! This stock is far from being done going down, and as I stated yesterday it could go out of business. Stay tuned! There is an old saying on wall street, never catch a falling kneife. More news keeps coming out that is only going to drive Merck out of business. Today there were press releases that stated Merck could have anywhere from 30,000 to 100,000 heart attack lawsuits. Oh and you can bet that the market will factor in a Kerry win which everyone on the street knows will just kill the drug stocks. Also, Merck has one of the worst pipelines around. I also don’t care how much cash they generate, cuase that cash will be soon in the hands of laywers. The facts are that Merck spent 100’s of millions on advertising Voixx, yet ignored the warnings of many doctors about the risks of this drug for years! This stock is far from being done going down, and as I stated yesterday it could go out of business. Stay tuned!

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