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NEW ORLEANS — Merck & Co. got slammed with two Vioxx trial setbacks on Thursday, calling into question the drug maker's strategy of taking on litigation over the withdrawn painkiller one case at a time.

A jury in New Orleans decided that Merck failed to notify doctors of Vioxx's risks and awarded $51 million to a former FBI agent who had a heart attack after taking the drug for more than two years.

A New Jersey judge threw out a prior Merck victory, saying that Merck held back evidence that could have altered the trial's course. The judge ordered a new trial.

The two decisions sent Merck shares plunging when investors, who had been buoyed by a string of recent Merck Vioxx victories, began wondering if Merck's liability over the drug would force the company to settle rather than fight.

David Logan, dean of Roger Williams University School of Law in Bristol, R.I., said following the New Orleans verdict that there would be new pressure on Merck to consider settling cases.

"How long can Merck carry the cost of these verdicts?" Logan asked. "None of these cases are coming back small."

He said both the cost of litigation plus the management time devoted to overseeing the Vioxx cases takes resources away from Merck that should be spent on developing new products. "This is a drag on Merck going forward," he said. "It is an enormous tax on the company moving forward."

"I'm sure someone is revisiting the strategy," said Michael P. Kelly, a trial attorney at McCarter & English in Wilmington, Del., which represents pharmaceutical companies.

Kelly said juries in New Orleans, where four more federal Vioxx trials are scheduled in the coming months, have a reputation for giving bigger awards. And the area's travails after Hurricane Katrina only make things worse for corporate defendants.

"Whenever a trial is in a depressed area it's bad news for the defendant because juries can have a tendency to see it as a way to redistribute the wealth," he said.

But Ted Mayer, of Hughes Hubbard & Reed, a member of Merck's national defense team, said the company intended to maintain its policy of trying every Vioxx case.

Jon LeCroy, an analyst with Natexis Bleichroeder, said there is no reason for the company to settle and every reason for it to continue to try each case, stretching out the process as long as possible so it doesn't have to dole out a lot of money at once and hopefully, wearing down plaintiffs so some just go away.

"Clearly it is costing them a lot to fight the cases but that will go up tenfold if they announce a settlement", he said, noting a settlement usually triggers more lawsuits.

Merck shares fell $2.35, or 5.7 percent, to close at $38.83 Thursday on the New York Stock Exchange, where they have traded in a 52-week range of $25.50 to $41.78.

LeCroy estimates that Merck will spend about $1 billion a year for the next 10 years on Vioxx with the money going to both legal fees and settlements. Merck has earmarked close to $1 billion for lawyers' payments but nothing for payments to plaintiffs. He said that Merck can easily absorb $1 billion a year. "From the (Merck's) stock perspective, a billion here, a billion there isn't that much money to speak of," he said.

In New Orleans, the jury found that Merck "knowingly misrepresented or failed to disclose" information about Vioxx to retired FBI agent Gerald Barnett's doctors. It said Barnett, of Myrtle Beach, S.C., should get $50 million in compensatory damages. And it added $1 million in punitive damages, saying Merck "acted in wanton, malicious, willful or reckless disregard for the plaintiff's rights."

In New Jersey, state Superior Court Judge Carol Higbee ruled evidence uncovered since the November verdict showed that Merck withheld information showing heart attacks could come with use of Vioxx for less than 18 months, said attorney Christopher Seeger.

Seeger represents Frederick "Mike" Humeston, of Boise, Idaho, who had a heart attack in September 2001.

Merck said it would appeal the New Orleans verdict and was considering its options in the New Jersey case.