PHARMECEUTICALS

MERCK SHARES PLUNGE AFTER REPORT CLAIMS IT HID VIOXX RISKS

Shares of Merck & Co. plunged almost 10% yesterday after a newspaper report said that documents show the pharmaceutical giant hid or denied evidence for years that its blockbuster arthritis drug Vioxx cause heart problems.

Merck, one of the world’s top five drug makers, pulled the arthritis and acute pain drug from the market worldwide on September 30, saying it was acting in patients’ best interest. Vioxx has been taken by about 20 million Americans and had produced 11% of Merck’s total revenues.

Hundreds of lawsuits have been filed against Merck over Vioxx and one analyst believes it could cost the company up to $12 billion.

Merck shares closed down $3.03, or 9.68%, at $28.28 on the New York Stock Exchange after The Wall Street Journal reported that internal e-mail and marketing materials show the company knew as far back as 2000 that Vioxx was linked to an increased risk of heart attack but tried to discredit such evidence.

Despite a March 9, 2000 e-mail from Merck research director Edward Scolnick to colleagues conceding an elevated risk of heart attack and stroke was “clearly there,” according to the newspaper, Merck continued to try to discredit academic researchers critical of the drug.

The Journal reported that one training document from Merck listed potentially difficult questions about the drug and stated in capital letters, “DODGE!”

Merck declined comment on the article.

– Associated Press

MARKETS

OIL PLUNGES BELOW $50 AS DEMAND GROWTH TO SLOW, SHIPMENTS RISE

Crude oil futures fell below $50 a barrel in New York for the first time since October 5 on speculation that growth in demand will ease next year as supplies increase.

Expansion in American manufacturing was the slowest in more than a year in October, according to the Institute for Supply Management. Iraqi exports rose almost 7% to an average 1.84 million barrels a day last month, the highest since the American-led invasion last year, according to data compiled by local shipping agents.

“The oil workers will probably not be joining the strike in Nigeria and Iraqi exports are at their highest level since the war,” said Phil Flynn, senior energy trader for Alaron Trading Corp. in Chicago. “This rally just couldn’t be maintained.” Crude oil for December delivery fell $2.21, or 4.3%, to $49.55 a barrel at 1:53 p.m. on the New York Mercantile Exchange. Oil reached $55.67 on October 25, the highest since futures began trading in 1983. Oil futures were 70% higher than a year earlier.

In London, the December Brent crude-oil futures contract fell $2.48, or 5.1%, to $46.50 a barrel on the International Petroleum Exchange. Brent futures touched $51.95 on October 27, the highest price since the contract began trading in 1988. Iraq exported about 57 million barrels of crude oil last month. That’s up from 51 million barrels in September and 41 million barrels in August, when shipments fell to the lowest in 10 months after a pipeline closed in the south.

– Bloomberg News

FOREIGN

EUROPEAN MANUFACTURING EXPANDS AT SLOWEST PACE IN 10 MONTHS

The manufacturing industry in the 12 nations sharing the euro grew at the slowest pace in 10 months in October as record oil prices crimped global demand.

An index based on a survey of about 3,000 purchasing managers compiled by NTC Research Ltd. for Reuters Group Plc fell to 52.4 from 53.1 in September, the lowest reading since December 2003, according to figures on the Internet. Economists expected a drop to 53, the median of 38 forecasts in a Bloomberg survey showed. A reading above 50 indicates expansion.

The 62% surge in oil prices this year is sapping growth by boosting costs for companies and leaving households with less money to spend. ABB Ltd., the world’s largest maker of power transformers, and Volkswagen AG are among manufacturers that reported third-quarter earnings below analyst forecasts.

“Higher oil prices and a global slowdown are starting to have an impact on the euro region,” said the chief economist at Julius Baer Holding AG in Zurich, Janwillem Acket. “Growth will probably weaken in the second half but not collapse.”

Crude oil futures rose to a record $55.67 a barrel in New York on October 25 amid concern about supply disruptions in countries including Nigeria, Iraq, and Russia.

Prices then eased after China raised interest rates for the first time in nine years. Futures in New York rose as much as 1.1% to $52.33 yesterday.

In Germany, Europe’s biggest economy, the purchasing managers index dropped to 52.8 from 54.1, the steepest decline among the euro-region’s three largest economies. The index for France slipped to 53.5 from 54 and Italy’s index fell to 51.4 from 51.6.

– Bloomberg News

TECHNOLOGY

ORACLE RAISES PEOPLESOFT BID

Oracle Corp. raised its takeover offer for Peo pleSoft Inc. by 14% to $8.8 billion, increasing pressure on the smaller software maker to give up its 17-month fight against the bid.

Oracle’s chief executive, Larry Ellison, said the $24-a-share proposal is his “best and final” offer. The price, raised from $21, is a 16% premium to PeopleSoft’s closing price October 29. PeopleSoft shares rose as much as 12% after directors said they’ll meet to review the offer.

Mr. Ellison moved after the European Union last week approved the purchase, which would push Oracle to no. 2 from no. 3 in the $22 billion market for soft ware that performs functions for human resources and accounting departments. PeopleSoft directors, after ousting the chief executive, Craig Conway, said last month they would be willing to consider a higher offer. Shares of Pleasanton, Calif.-based PeopleSoft gained $2.16 to $22.93 in Nasdaq Stock Market composite trading, indicating some investors still aren’t convinced the deal will be completed any time soon. They earlier advanced to $23.22. Oracle rose 9 cents to $12.75. PeopleSoft became more willing to talk as its finances deteriorated. The software maker lost customers and had four quarters of declining profit until the most recent period. Board member Steven Goldby said directors would be willing to consider a bid at the “right price.” The offer is Oracle’s fifth since its first bid of $16 a share in June last year.

– Bloomberg News

IN THE COURTS

JUDGE DENIES REQUEST TO COMBINE KOZLOWSKI TRIALS

A Manhattan judge yesterday refused to combine a retrial of larceny charges against former Tyco International Ltd. chief executive L. Dennis Kozlowski with a trial on charges that he failed to pay sales taxes on $13 million worth of art. In denying the prosecution’s consolidation request, state Supreme Court Justice Michael Obus noted that the larceny trial, set to begin January 18, includes Tyco’s former chief financial officer Mark Swartz, 44. The judge said there is not enough evidence that Mr. Swartz was involved in the tax scheme to join that trial with the larceny retrial. “There is no evidence that Swartz entered into any agreement, tacit or express, with either Kozlowski or the art vendors to avoid the payment of the sales tax,” Mr. Obus wrote in his 11-page ruling. The tax indictment charges Mr. Kozlowski, 57, with conspiracy, falsifying business records and tampering with evidence. Mr. Obus had earlier noted that nonpayment of sales taxes is not a crime but it is a crime to fail to collect them. Mr. Obus also said the charges involved different victims – Tyco and its shareholders in the larceny case, New York state in the tax evasion case. In the tax case, Mr. Kozlowski was accused of scheming with dealers to avoid paying more than $1 million on $13 million worth of artworks. In the larceny case, Messrs. Kozlowski and Swartz are accused of stealing more than $600 million from Tyco.

– Associated Press