UPDATE 2-Merck's first Fosamax lawsuit ends in mistrial

* Eight jurors unable to reach unanimous verdict

* Plaintiff plans to pursue case, Merck eyes dismissal

* Merck shares up 1.2 percent (Adds lawyer comments, details, background, bylines)

By Christine Kearney and Grant McCool

NEW YORK, Sept 11 (Reuters) - The first federal lawsuit alleging that Merck & Co's (MRK.N) osteoporosis drug Fosamax causes jaw damage ended in a mistrial on Friday after an apparently contentious jury was unable to reach a verdict.

Shirley Boles, 71, of Walton Beach, Florida, sued in 2006 claiming she suffered dental and jaw problems because she took Fosamax from 1997 to 2006.

The month-long trial in Manhattan federal court was Merck's first out of some 1,280 plaintiff groups involving almost 900 U.S. lawsuits by patients who claim Fosamax caused the condition known as osteonecrosis of the jaw, or death of jawbone tissue.

Asked by U.S. District Judge John Keenan whether the jury could reach a verdict, the forewoman said: "Absolutely not," according to Timothy O'Brien, a lawyer for Boles. The jury began deliberations on Sept. 2, but it had several days off.

Merck opposed declaring a mistrial. Paul Strain, a lawyer for the Whitehouse Station, New Jersey-based company, said jurors were split 7 to 1 in favor of Merck, citing a jury note to the judge dated Sept. 9.

On Wednesday, Keenan gave the jurors a cooling-off period after a claim by one juror in a note that a chair had been thrown in the jury room and that she felt threatened.

Boles's lawyer said outside court that he would try to bring the case again in the spring of 2010.

He said Boles "feels very strongly she was misled, that her doctor was misled about whether she needed to be on that medication."

Strain said Merck would try to have Boles' case dismissed if she sought retrial.

"We continue to believe that the company provided appropriate and timely information about Fosamax to consumers and to the medical, scientific and regulatory communities," Merck's general counsel, Bruce Kuhlik, said in a statement.

Earlier this week, Keenan rejected Merck's effort to dismiss 24 other Fosamax cases.

In afternoon trading, Merck shares were up 39 cents at $32.35 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. (Additional reporting by Jonathan Stempel; Editing by Steve Orlofsky)