Investors Cheer, Analysts Caution In Wake of FDA Advisory Panel News

NEW YORK - Financial analysts reacted quickly to last month's FDA panel recommendation that gave green lights to three embattled COX-2 inhibitors, noting that the ostensibly good news wouldn't eliminate the legal risk manufacturers of the drugs are currently facing.

According to a research report issued Feb. 22 by broker Smith Barney, the recommendation by the FDA's Arthritis Drugs Advisory Committee provided little upside for manufacturers Merck & Co. and Pfizer, Inc., despite significant gains in the companies' share values that followed the news.

"While the panel's vote on Vioxx might marginally improve the litigation picture, Merck's stock appears …