Drugs in '05: Much Promise, Little Payoff

Even as pharmaceutical companies poured a record amount of money into drug development in 2005, the industry's research drought grew worse.

According to newly released statistics from the Food and Drug Administration, it approved only 20 new drugs, down from 36 in 2004. Only once in last 10 years has the number of newly approved drugs been lower than last year's figure.
The dry spell in 2005 came even as spending on research by the industry reached a new high, passing $38 billion. And in a rarity, several major companies failed to win approval for a new drug invented in their own labs, including Pfizer, Eli Lilly and Johnson & Johnson.
The decline in drug development came as scientists in and outside the companies were making great strides in genomics and other sorts of basic research into the way diseases develop, opening many potential new targets for treatment. Yet such progress in the laboratory has not translated so far into many new drugs on the market.
Some analysts say that the drug industry is in a cyclical trough, and that the number of new drugs - not just new applications for drugs already on the market - will start rising within a few years as research investments begin to pay off. But the F.D.A. and the companies seem to agree that the process for testing and developing new drugs needs improvement.
"Our concern is that the development process itself is not keeping up at a fast enough pace to match the progress on the discovery end," said Dr. Scott Gottlieb, the agency's deputy commissioner for medical and scientific affairs.
The F.D.A. is looking for ways to speed the approval of new treatments - like approving drugs based on "surrogate endpoints," whether, for example, a cancer drug causes tumors to shrink instead of whether it prolongs the life of patients. It was on such a basis that the F.D.A. last month approved Nexavar, a Bayer drug for treating kidney cancer.
But like finding new treatments, diagnosing the problem of drug development is easier than figuring out a solution. Even as the F.D.A. looks for ways to speed the testing of new treatments, members of Congress and some consumer groups are calling for even more testing before drugs are approved.
The low output from research last year was even worse than the top-line figures might indicate. In 2004, important cancer treatments including Avastin, by Genentech, and Tarceva, through a partnership of Genentech and OSI Pharmaceuticals, were among the therapies that regulators allowed onto the market. The drugs that were approved were mostly for rare diseases like chronic iron overload, a condition for which the Novartis medicine Exjade received clearance.
In the meantime, the agency delayed approval of prominent new treatments like Pargluva, a diabetes drug from Bristol-Myers Squibb and Merck, and Exubera, a form of inhaled insulin from Pfizer.
The paucity of new products is a big reason that the stock prices of large drug makers have tended to fare poorly in recent years. Shares of Pfizer, the industry leader, for example, reached a peak of $49 in July 2000 and have trended downward since, closing yesterday at $24.44.
The drought in new drugs has led some industry executives to complain that the F.D.A. is denying approval to good new treatments because of the criticism the agency has faced from lawmakers over Vioxx. Merck stopped selling its arthritis painkiller Vioxx in 2004 after a clinical trial showed that it increased the risks of heart attacks and strokes in patients taking it for 18 months or longer. Some other studies found heart attack risks as early as 2000, and the F.D.A. has been criticized for not forcing Merck to withdraw the drug earlier or to warn doctors prominently of such risks.
Dr. Gottlieb said that the agency's attitude toward approving new drugs had changed only marginally, if at all. Its approval rate has been roughly flat for the last several years, but companies are submitting fewer applications, he said.
Albert Rauch, a drug industry analyst at A. G. Edwards & Sons, says that the F.D.A. should not be blamed for the drop in new approvals last year.
"Some of the drugs that didn't make it through, they had issues," Mr. Rauch said. "If you come up with something that's unique and really has a unique advantage, the F.D.A.'s very receptive to that."
Mr. Rauch said he believed that the industry was probably at the bottom of the development cycle and that the number of new drugs would increase in the next few years, as some sophisticated research techniques started to bear fruit. "When you're talking about targets, there's a lot of them out there," Mr. Rauch said. "But those targets didn't become evident until after 1995. It's only been 10 years, and it typically takes at least 10 years to get a product to market."
Researching and developing a drug is a long and arduous process. Genentech's work leading to Avastin, for example, began in 1989 - 15 years before the drug's approval. Scientists first identify the cellular process of disease within the body. They may search for proteins that cancerous tumors release in order to spread, or receptors on the surface of a cell that become the targets of viruses.
The drug company then searches for chemical compounds or proteins that are able to interact with the targets the scientists have found - without damaging cells in other parts of the body. If a treatment appears to have therapeutic effects in test-tube and animal trials, the companies then move on to Phase I human testing, when a handful of healthy volunteers are given the therapy to make sure that it is safe enough for wider testing. In Phase II testing, the drug is tried on a few dozen to a few hundred patients for safety and effectiveness.
Finally, in Phase III development, the drug is tested in large-scale trials with as many as several thousand patients to demonstrate its effectiveness and to search for rarer side effects.
If the treatment is shown to be unsafe or ineffective at any stage, it fails development and is put aside.
According to a report in December from Merrill Lynch, the number of potential new drugs in Phase I and II testing has nearly doubled in the last decade, to 1,971 in 2004 from 1,010 in 1995. But that has not translated into success in Phase III development; the number of drugs in Phase III has been flat at fewer than 400.
"R&D statistics over the past decade have been disappointing," Merrill's analysts wrote in their report. Still, the analysts predicted that companies would continue to increase research spending and expand their pipelines of early-stage drugs.
The advances in early-stage development, though, may be increasing the rate of attrition as drugs move into later stages, according to the report. "Technological advances may have allowed companies to more easily create new therapies, thus boosting the number of compounds in early development," it said. "But the increasing complexity of the targeted disease could mean that it is hard to predict efficacy and safety."
Analysts note that the biotechnology industry is still coming into its own and that the medical payoffs from genomics still lie mainly in the future.
So far, said Robert Rech, a managing director at Ferghana Partners, a specialty investment bank that specializes in the drug industry, the increased knowledge about disease processes has created as many questions as answers. "We have all this extra information, and all it's done is complicated everything," he said. "It's almost like we know too much, because for everything that we learn, it almost brings up two new questions."
Still, the companies that Ferghana works with are optimistic that the drought in drug development will not last forever, Mr. Rech said. "If you're in the industry, you certainly don't sense any lack of activity. I think we will get there, but we're only 15 years into this. It just takes time."

Second Texas Vioxx trial slated for January

NEW YORK (Reuters) - Merck & Co. (MRK.N: Quote, Profile, Research), which lost its first Vioxx product liability case last summer in Texas, on Tuesday said a trial involving another Texas Vioxx user who suffered a fatal heart attack will begin January 24.
Merck said it believes evidence in the case will show that its withdrawn painkiller Vioxx did not cause the heart attack of 71-year-old Leonel Garza Sr., who died of the attack on April 21, 2001.
"Approximately one month before his death, Mr. Garza was given a one-week supply of Vioxx 25 milligram samples for arm pain," Merck said in a release.
Merck, which contends Vioxx has not posed a heart danger to short-term users of Vioxx, said Garza had a 23-year history of cardiovascular disease and had suffered a prior heart attack.
Merck pulled Vioxx off the market in September 2004 after a study showed the drug, which had annual sales of $2.5 billion, significantly increased the risk of heart attacks and strokes in patients who had been taking it for at least 18 months.
Thousands of U.S. state and federal lawsuits have since been filed against Merck by former Vioxx users or their survivors, alleging harm from the widely advertised pill.
In the earlier Texas case, a state jury on August 19 found Merck negligent in the death of a 59-year-old marathoner and awarded his widow $253 million. The amount is expected to be greatly reduced under Texas law that limits awards.
Since losing that first state trial in Texas, a New Jersey state jury found Merck did not commit consumer fraud or conceal risks associated with the painkiller in the case of a short-term Vioxx user who blamed the drug for his heart attack.
The first federal Vioxx trial, held in Houston last year, ended with a hung jury. The suit is scheduled to be retried beginning on February 6 in New Orleans.
Merck shares were off 31 cents at $33.35 on Tuesday morning trade on the NYSE, in line with moderate declines for the drug sector.

VIOXX(R) Trial Update: Statement on VIOXX(R) Product Liability Trial Scheduled in Starr County, Texas

Merck & Co., Inc. will conduct a vigorous defense in theproduct liability lawsuit, Garza v. Heart Clinic, Evans, Posada andMerck & Co., Inc., which is scheduled to go to trial before a jury onJan. 24, 2006, in the 229th Judicial District Court of Starr County,Texas. The company believes the evidence in this case will show thatVIOXX did not cause the unfortunate heart attack of Leonel Garza, Sr.
Mr. Garza, 71, died of a heart attack on April 21, 2001, following23 years of cardiovascular disease and a prior heart attack.Approximately one month before his death, Mr. Garza was given aone-week supply of VIOXX 25 mg samples for arm pain.
"There is no reliable scientific evidence that VIOXX caused Mr.Garza's heart attack," said Ted Mayer of Hughes Hubbard & Reed,outside counsel for Merck. "At the time of Mr. Garza's heart attack,he exhibited numerous major risk factors for coronary artery disease.His autopsy report lists acute myocardial infarction as the cause ofhis death and notes evidence of severe atherosclerotic disease in allof Mr. Garza's coronary arteries. We are confident that any fair jurywill find that VIOXX had nothing to do with the unfortunate passing ofMr. Garza since there is no reliable scientific evidence thatshort-term use of VIOXX increases cardiovascular risk."
Texas State District Court Judge Alex W. Gabert will preside overthe case.
A separate VIOXX product liability case, Plunkett v. Merck, isscheduled to be retried before a jury in New Orleans before FederalDistrict Court Judge Eldon Fallon on Feb. 6, 2006. Jurors in theoriginal trial, held in Houston in December, were unable to reach averdict, resulting in a mistrial.
"We intend to defend these cases individually over many years,"said Kenneth C. Frazier, senior vice president and general counsel ofMerck. "Merck acted responsibly - from researching VIOXX prior toapproval in clinical trials involving almost 10,000 patients - tomonitoring the medicine while it was on the market - to voluntarilywithdrawing the medicine when it did."
The company voluntarily withdrew VIOXX in September 2004 inresponse to a Merck-sponsored study, called APPROVe. In that study,there was an increased relative risk of thrombotic events in patientstaking VIOXX continuously for 18 months compared to patients taking asugar pill. That increased relative risk did not appear to bestatistically significant until 30 months or more of continuous use,and there was no detectable difference in risk for patients takingVIOXX for a short duration.
About Merck
Merck & Co., Inc. is a global research-driven pharmaceuticalcompany dedicated to putting patients first. Established in 1891,Merck currently discovers, develops, manufactures and markets vaccinesand medicines to address unmet medical needs. The Company devotesextensive efforts to increase access to medicines through far-reachingprograms that not only donate Merck medicines but help deliver them tothe people who need them. Merck also publishes unbiased healthinformation as a not-for-profit service. For more information, visitwww.merck.com.
Forward-Looking Statement
This press release contains "forward-looking statements" as thatterm is defined in the Private Securities Litigation Reform Act of1995. These statements are based on management's current expectationsand involve risks and uncertainties, which may cause results to differmaterially from those set forth in the statements. The forward-lookingstatements may include statements regarding product development,product potential or financial performance. No forward-lookingstatement can be guaranteed, and actual results may differ materiallyfrom those projected. Merck undertakes no obligation to publiclyupdate any forward-looking statement, whether as a result of newinformation, future events, or otherwise. Forward-looking statementsin this press release should be evaluated together with the manyuncertainties that affect Merck's business, particularly thosementioned in the cautionary statements in Item 1 of Merck's Form 10-Kfor the year ended Dec. 31, 2004, and in its periodic reports on Form10-Q and Form 8-K, which the Company incorporates by reference.

Fourth Vioxx Trial Set for The Valley

A jury in the Rio Grande Valley in Texas, a traditionally plaintiff-friendly location, will hear the nation's next Vioxx suit. The trial in Felicia Garza, et al. v. Michael D. Evans, M.D., et al. is set to begin on Jan. 24 in 229th District Judge Alex W. Gabert's court in Starr County. The trial will be the first in 2006 and the fourth Vioxx suit to go to a jury, following a plaintiff's state-court win in Angleton -- the verdict totaled $253.5 million -- a defense win in state court in New Jersey, and a mistrial in federal court in Houston. The family of Leonel Garza Sr. alleges in its second amended petition that the Vioxx a physician gave Garza on April 4, 2001, caused his fatal heart attack on April 21, 2001. The plaintiffs are suing Vioxx manufacturer Merck & Co. Inc., of New Jersey, and two of Garza's doctors, Michael D. Evans and Juan D. Posada. The plaintiffs allege in their petition that Evans, Posada and Merck were negligent, and they also bring claims of strict liability, breach of warranties, negligent misrepresentation, gross neglect and gross negligence against Merck. In the petition, the plaintiffs, who include Garza's widow, three sons and daughter, seek unspecified actual and punitive damages. Garza died at age 71. According to the second amended petition, Evans and Posada are represented by Ronald G. Hole, a partner in McAllen's Hole & Alvarez, but Hole could not immediately be reached for comment. In a written statement on Jan. 10, Merck defense lawyer Ted Mayer, a partner in Hughes, Hubbard & Reed in New York, says there is "no reliable evidence" the pain-killer Vioxx caused Garza's heart attack. "We are confident that any fair jury will find that Vioxx had nothing to do with the unfortunate passing of Mr. Garza," Mayer says. The plaintiffs' lawyers filed the suit in March 2003. On two occasions, once in 2003 and once in 2005, Merck removed the suit to federal court, but in November 2005, U.S. District Judge Eldon Fallon of New Orleans, who is presiding over the federal multidistrict Vioxx litigation, remanded Garza to the 229th District in Starr County. Last week, Gabert set the trial for Jan. 24. The plaintiffs team in Garza includes Joe Escobedo Jr., David H. Hockema, John L. Tippit and Mauro F. Ruiz, all of Hockema, Tippit & Escobedo in Edinburg; Alberto A. Munoz II of the Law Office of Alberto A. Munoz II in Edinburg; and Kathryn Snapka, a partner in Corpus Christi's Snapka & Turman. Kent Jarrell, a Vioxx trial spokesman for Merck, says the defense trial team may include, depending on lawyer schedules, Richard Josephson and Travis Sales, partners in Baker Botts in Houston; Ricardo Cedillo, a shareholder in Davis, Cedillo & Mendoza in San Antonio; Rene Oliveria, a partner in Roerig, Oliveria & Fisher in Brownsville; and/or Jaime Saenz, a partner in Rodriguez, Colvin, Chaney & Saenz of Brownsville. Merck voluntarily withdrew Vioxx from the market in September 2004 after a study indicated the drug could double the risk of heart attack or stroke if taken for 18 months or longer.

Second Texas Vioxx Trial to Start Jan. 24

Merck & Co. (MRK), which lost its first Vioxx product liability case last summer in Texas, Tuesday said a trial involving another Texas Vioxx user who suffered a fatal heart attack will begin Jan. 24.
Merck said it believes evidence in the case will show that its withdrawn painkiller Vioxx did not cause the heart attack of 71-year-old Leonel Garza Sr., who died of the attack on April 21, 2001.
"Approximately one month before his death, Mr. Garza was given a one-week supply of Vioxx 25 milligram samples for arm pain," Merck said in a release.
Merck, which contends Vioxx has not posed a heart danger to short-term users of Vioxx, said Garza had a 23-year history of cardiovascular disease and had suffered a prior heart attack.
Merck pulled Vioxx off the market in September 2004 after a study showed the drug, which had annual sales of $2.5 billion, significantly increased the risk of heart attacks and strokes in patients who had been taking it for at least 18 months.
Thousands of U.S. state and federal lawsuits have since been filed against Merck by former Vioxx users or their survivors, alleging harm from the widely advertised pill.
In the earlier Texas case, a state jury on Aug. 19 found Merck negligent in the death of a 59-year-old marathoner and awarded his widow $253 million. The amount is expected to be greatly reduced under Texas law that limits awards.
Since losing that first state trial in Texas, a New Jersey state jury found Merck did not commit consumer fraud or conceal risks associated with the painkiller in the case of a short-term Vioxx user who blamed the drug for his heart attack.
The first federal Vioxx trial, held in Houston last year, ended with a hung jury. The suit is scheduled to be retried beginning on Feb. 6 in New Orleans.
Merck shares were off 31 cents at $33.35 on Tuesday morning on the NYSE, in line with moderate declines for the drug sector.

Pharma's year of trouble and strife

For many reasons, 2005 was a year that the pharmaceutical industry would rather forget. Public confidence in the industry is arguably at an all-time low, and safety and policy issues overshadowed scientific achievements.
Safety in the spotlight
The year began, much as 2004 had ended, with Vioxx (rofecoxib; Merck) and the other cyclooxygenase-2 (COX2) inhibitors dominating the headlines. In February, an FDA Advisory Committee narrowly voted 17–15 in favour of the overall risk–benefit profile for Vioxx supporting marketing in the US. The committee voted 17–13 with two abstentions that Bextra (valdecoxib; Pfizer) should continue to be marketed, and voted a more unanimous 31–1 in favour of continued marketing of Celebrex (celecoxib; Pfizer). Bextra was withdrawn in April, after another risk was highlighted — a severe skin reaction called Stevens–Johnson syndrome — and an injectable form of the drug (Dynastat) was rejected by the FDA in September.
In the first of the lawsuit trials against Vioxx, a jury in Angleton, Texas, ordered Merck to pay a staggering US$253.4 million to Carol Ernst, whose husband died after taking the drug. The jury's decision seemed to be based more on how much Merck knew about the risks before it withdrew the drug than on whether the drug was responsible for Robert Ernst's death from an arrhythmia (heart attack being the only cardiovascular adverse event associated with Vioxx). Merck won the second case on its home turf in New Jersey, but the first of the federal cases was declared a mistrial (see page 10).
Merck is already feeling the effects of the Vioxx saga. CEO Raymond Gilmartin departed from his post in May, and was replaced by Richard Clark, the former head of the manufacturing division. With further pressure from the patent on Merck's best-selling drug, the statin Zocor (simvastatin), expiring in 2006 (see 'Six to watch in 2006') the company announced major cuts, with 7,000 jobs set to go.
The year ended with Pfizer saying it will spend up to $100 million for a trial run by Steven Nissen at the Cleveland Clinic which will compare Celebrex head-to-head with naproxen and ibuprofen in arthritis patients who are at a high risk of cardiovascular disease.
More safety woes

The first of the cases on cardiovascular-related deaths linked with Vioxx entered the courts.
The COX2 inhibitors were not the only drugs hounded by safety problems. Elan and Biogen Idec's antibody treatment for multiple sclerosis Tysabri (natalizumab) was withdrawn in February after two patients developed the rare demyelinating disease progressive multifocal leukoencephalopathy (PML), with one case being fatal. It seemed that Tysabri's mode of action — inhibiting 4 integrin — could suppress the immune system so much it allowed the activation of the normally latent JC virus, which is associated with PML. A third case identified soon after increased fears of more cases and that this could be a class effect. But a safety evaluation of more than 1,000 patients failed to uncover any more cases, and Tysabri has been resubmitted for FDA approval. A decision is expected by mid-2006.
Safety doubts also surrounded Johnson & Johnson's heart failure drug Natrecor (nesiritide). An analysis of pooled trial data showed that the drug might increase mortality or cause renal damage (Sackner–Bernstein, J. et al. JAMA 293, 1900–1905; 2005). J & J convened a panel headed by Harvard University's Eugene Braunwald, which concluded that Natrecor's use should be restricted to the most ill patients and that a large clinical trial should be conducted to prove that the drug is safe.
Natrecor was one of the five approved drugs that FDA whistleblower David Graham named in a Congress hearing in 2004 as posing a similar threat to the public's health as Vioxx. In November, the FDA requested that another of the named drugs, GlaxoSmithKline's asthma treatment Serevent (salmeterol xinafoate), should carry warnings that it might increase the risk and severity of asthma episodes (see page 11). Warnings were placed on other drugs containing long-acting -agonists — GSK's Advair (fluticasone propionate; salmeterol xinafoate) and Schering-Plough's Foradil (formoterol fumarate) — and the agency also recommended restricting their use to patients who failed to respond to other asthma treatments.
Race discrimination
The highly controversial subject of 'race-based medicine' came to the fore in June when the FDA approved NitroMed's BiDil for heart failure in African-American patients only. BiDil is a combination of two generic drugs — isosorbide dinitrate and hydralazine — that increase nitric oxide levels which relaxes the smooth muscle cells that line arteries.
It's generally agreed that race is a crude surrogate maker for disease, and many feared that approving BiDil would set a worrying ethical precedent. But given that middle-aged African-Americans are more than twice as likely to die from heart failure as Caucasians of similar age, there is a major clinical need for an effective treatment. And studies showed that BiDil, at least in part, met that need. Self-described black patients taking BiDil had a 43% reduction in death and a 39% decrease in hospitalization for heart failure compared with placebo (Taylor, A. L. et al. NEJM 351, 2049–2057; 2005).
Although much more needs to be understood about the ethnic variation in drug response, BiDil's approval highlighted the need to identify markers to explain and predict such clinical observations to develop better drugs. Another study from deCODE Genetics showed that a particular variant of a gene that boosts inflammation called LTA4H raises the risk of heart attack in African-Americans by more than 250% (Helgadottir, A. et al. Nature Genet. Published online: 10 Nov 2005; ). The company is currently developing a drug candidate, called DG031, which inhibits the inflammation pathway that LTA4H functions through, and is creating a diagnostic test for the gene.
Flu fears grow

Public health concerns: BiDil, the first race-based drug to be approved, and fears of an avian flu pandemic dominated the headlines in 2005.
The growing fear of an avian flu pandemic was arguably the biggest health story of the year. As isolated cases of infection with the deadly H5N1 avian flu virus strain slowly spread across the globe from South East Asia, it became clear what little we can do to protect against a pandemic.
With current vaccine technologies unable to deal with a potential pandemic (despite, for example, the US government's pledge to increase funding for vaccine development, including a long-overdue boost for research on cell-culture-based methods), Roche and Gilead's antiviral drug Tamiflu (oseltamivir) emerged as the best available treatment against the H5N1 strain. Demand for Tamiflu bordered on the hysterical: governments and states fought to stockpile the yellow and white capsules, and doses of Tamiflu even found themselves put up for sale on the online auction site eBay.
For a drug that hadn't been selling well, Tamiflu's instant fame was good news for its manufacturers, but it also brought several problems. With the current supply thought to cover just 2% of the world population, production of the drug needed to be ramped up way above Roche's current capabilities to make enough doses for a potential pandemic. Generics companies succeeded in forcing Roche to allow other manufacturers to produce the antiviral drug as well. Companies such as Cipla claimed that they could make Tamiflu within months, despite Roche's claims that it would take a newcomer 2–3 years to start from scratch and produce significant amounts of the drug through the complex ten-step synthetic process.
But a bigger problem seemed to be that the starting material, shikimic acid, comes from a limited source — the Chinese cooking spice star anise. Ironically, one solution to the problem of manufacturing the antiviral could lie within bacteria. One-third of Roche's Tamiflu supplies is currently made by engineering bacteria to produce shikimic acid; whether this technology can be scaled up to cope with the increased demand remains to be seen.
Stem-cell pioneer under fire
Stem-cell therapies took a huge step towards fulfilling their long-hyped potential, yet within months took a bigger step backwards.
The leading group in the field, a South Korean team headed by Woo Suk Hwang, stunned the research community by showing that they could make embryonic stem-cell lines tailored to individual patients much more efficiently than was thought possible (Hwang, W. S. et al. Science 308, 1777–1783; 2005). Months later, it was announced that a World Stem Cell Foundation would be launched, where Hwang's group would use their know-how to create custom stem-cell lines for scientists worldwide.
But just a few weeks after the announcement came the bombshell that the South Korean team obtained human egg cells unethically from two junior researchers in an early study, and Hwang resigned from the new foundation. The dust has yet to settle on this saga, but at the time of going to press Hwang was also facing allegations over the validity of the scientific data presented in the Science paper (see page 10). See Boxes 1,3 and 4.

Stocks Rise Despite Smaller Intel Forecast

Stocks rose in early trading Friday as Wall Street reconciled itself with Intel Corp.'s tightened forecast and a recent runup in energy prices. Friday's advance followed two sessions of moderate losses as investors scoured for any news that might bring revive its yearend rally after a two-week hiatus. Many are hoping for a solid holiday shopping season, with lower gasoline prices contributing to improving consumer confidence.
Oil and gas prices were higher in premarket activity but fell slightly despite a snowstorm in the Northeast that was expected to drive a spike in heating fuel demand. On the New York Mercantile Exchange, natural gas lost 13.4 cents to $14.86 per 1,000 cubic feet, and a barrel of light crude dropped 6 cents to $60.60. In the first hour of trading, the Dow Jones industrial average gained 9.13, or 0.08 percent, to 10,764.25. Broader stock indicators were also higher. The Standard & Poor's 500 index was up 2.07, or 0.16 percent, at 1,257.91, and the Nasdaq composite index added 4.20, or 0.19 percent, to 2,250.66. Bond prices fell, with the yield on the 10-year Treasury note climbing to 4.5 percent from 4.46 percent late Thursday. The dollar was mixed against other major currencies in European trading, while gold prices lingered near record highs. Intel trimmed $200 million from both the high and low ends of its fourth-quarter sales estimate, narrowing its forecast to a range of $10.4 billion to $10.6 billion. Intel's revision, which fell slightly below Wall Street expectations, follows a sharpened outlook at rival Texas Instruments and improved guidance from Xilinx Inc. Intel fell 23 cents to $25.47, while TI gained 25 cents to $32.88 and Xilinx rose 51 cents to $26.53. Merck & Co. slipped 71 cents to $28.97 after the New England Journal of Medicine on Thursday said researchers failed to disclose that three patients suffered heart attacks in a 2000 Merck-funded study of its Vioxx painkiller. Meanwhile, jurors in the first federal Vioxx trial were to continue deliberating whether Merck failed to warn about the drug's risks. Rural telecommunications provider Alltel Corp. said it plans to become a pure wireless carrier by spinning off its fixed-line phone business and merging that unit with Valor Communications Group Inc. in a $4.9 billion deal. Alltel was up $2.07 at $66.89, and Valor added 29 cents to $12.53. The Russell 2000 index of smaller companies rose 0.99, or 0.14 percent, to 686.21. Overseas, Japan's Nikkei stock average jumped 1.45 percent. In afternoon trading, Britain's FTSE 100 fell 0.27 percent, Germany's DAX index sank 0.12 percent, and France's CAC-40 was lower by 0.3 percent.