Shares of Wyeth, a pharmaceuticals and consumer healthcare products company, are currently trading at $41.15.

According to Merrill Lynch's research note published this morning, Wyeth is likely to face several litigation cases associated with its diet drug, Fen-Phen, in the near future. The analysts mention that the company has lost five out of the six diet-drug court cases in the past. Wyeth had pulled out its diet drug, Fen-Phen, from the US markets in 1997, after heart valve damages were noticed in some of the patients, Merrill Lynch says.

The analysts expect the forthcoming litigation cases to offset any near-term upside potential for Wyeth's current stock valuation. Merrill Lynch expresses its concern regarding the company's disappointing performance in the previous court cases, associated with the diet-drug issue. However, the analysts expect Wyeth to drag the individual cases for extended periods, through multiple appeals against unfavourable decisions.

The EPS estimates for 2003 and 2004 are $2.50 and $2.78, respectively. The P/E estimates for 2003 and 2004 are 16.5x and 14.8x, respectively.