UPDATE 2-Merck loses effort to dismiss 24 Fosamax cases

Wed Sep 9, 2009 1:42pm EDT

* Judge allows testimony by two experts

* Judge rejects Merck motion for summary judgment

* Merck shares rise

NEW YORK, Sept 9 (Reuters) - A Manhattan federal judge has rejected Merck & Co's (MRK.N) effort to dismiss 24 cases alleging that its Fosamax drug treatment for osteoporosis causes jaw damage.

In an opinion released on Wednesday, U.S. District Judge John Keenan ruled that the plaintiffs could introduce testimony by two doctors to show that the drug can cause jaw damage after less than three years of continuous use.

Keenan said the evidence is sufficiently reliable to allow a rational jury to establish such a connection. He said individual plaintiffs will then be allowed to present expert testimony that Fosamax caused them to suffer such damage, and that such testimony could by itself "make causation a genuine issue of fact for trial."

The company faces a slew of lawsuits involving almost 900 cases by patients who say Fosamax caused osteonecrosis of the jaw. A Manhattan jury is deliberating this week over the drug company's potential liability in one such case.

"Judge Keenan did not rule that Fosamax causes jaw injury," Merck spokeswoman Casey Stavropoulos said. "He only ruled that plaintiffs may attempt to prove that Fosamax causes jaw injury in future cases."

The spokeswoman also said that Merck believed that the court "ruled appropriately in prohibiting a large part of future testimony" by a third plaintiff expert, Dr. Robert Marx.

Keenan's ruling said he found no basis to restrict the "general causation" testimony of two doctor experts, Alastair Goss and John Hellstein.

Fosamax belongs to the bisphosphonate family of osteoporosis drugs that include Procter & Gamble Co's (PG.N) Actonel and Roche Holding AG's (ROG.VX) Boniva. Merck says Fosamax prevents bone fractures, especially in post-menopausal women, by helping to increase bone mineral density.

In afternoon trading, Merck shares were up 50 cents at $31.47 on the New York Stock Exchange.

The case is In re Fosamax Products Liability Litigation, U.S. District Court, Southern District of New York (Manhattan), No. 06-1789. (Reporting by Jonathan Stempel; Additional reporting by Grant McCool; Editing by Gerald E. McCormick)