Merck - Vioxx - is this preparation for the worst?

If the plaintiffs in the Vioxx case currently being tried in New Jersey win, the damages awarded are likely to be modest and won't affect Mercks' ability to manage the financial fallout from the thousands of lawsuits related to the pain killer, a Wall Street analyst wrote on Monday.

Jami Rubin, a Morgan Stanley analyst, said there is a "decent chance" the jury will find for either of the two plaintiffs who are suing Merck and whose cases are being heard in a single trial. She said that the judge's actions indicate a pro-plaintiff tilt and that she believed the jury isn't as educated as the panel in an earlier New Jersey trial, which absolved Merck from any responsibility in the heart attack of man who blamed Vioxx for it.

In the current case, Rubin predicted pain-and-suffering damages in the range of $1 million to $2 million, but she sees no reason for the jury to award punitive damages because there is no evidence of Merck acting recklessly.

Rubin said that if the plaintiffs win and there are no punitive damages, Merck stock will fall by no more than 5%.

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