Instead, Wyeth has set aside that $16.6 billion to deal with legal claims from people who took their recalled diet drugs, Pondimin and Redux.

And that sum, according to Wall Street observers, is sure to grow.

Six years after the U.S. Food and Drug Administration asked Wyeth to remove their drugs -- part of the "fen-phen" combination -- because some users were found with serious heart problems, the Madison-based drug maker is still paying for it.

A $1.3 million verdict in Texas earlier this month -- for a woman who claimed she suffered heart damage after taking the combination for 90 days -- spooked investors and sent analysts scurrying to reexamine the company's potential liability. Only a few weeks earlier, Wyeth said it had tacked on another $2 billion to its reserve fund to deal with claims.

"It's still haunting them," said Sena Lund, a drug-industry analyst with Cathay Financial LLC.

An estimated six million people had taken the drugs when they were pulled from the market in 1997.

Although Wyeth entered into a $3.75 billion national settlement several years ago with many patients, more than 70,000 decided to pursue their own cases.

The Texas verdict was one of the first rendered for those individual cases, with the amount higher than some expected.

Credit-rating agency Standard & Poor's put the company's solid credit rating on a negative watch after the verdict, citing concern that the diet-drug exposure is greater than previously thought. Wyeth's shares fell in the week following the verdict against a broad upswing in pharmaceutical stocks. In another closely watched trial, a jury is expected to rule on a case in Atlanta by Thanksgiving.

Analysts generally agree that Wyeth will have to add more to its legal fund, but there is no consensus as to how many billions more. David Risinger, an analyst with Merrill Lynch, said the company might add anywhere from $1 billion to $17 billion. He downgraded his rating on Wyeth's stock on Monday because of uncertainty surrounding the litigation.

Compounding the complexity of the situation, the payment of claims in the settlement has not all gone smoothly. The trust fund overseeing the settlement has accused doctors and lawyers of conspiring to file invalid claims. Plaintiff lawyers say the fund is putting up roadblocks to stall payments to deserving patients.

The company says its overall exposure has been difficult to get a handle on because it believes many bogus claims have been filed.

"The litigation will take a long time to play out, and Wyeth is resolved to fight hard as long as it takes," said Lowell Weiner, a Wyeth spokesman.

In reference to the Texas case, Weiner said that the company's believed the award is unwarranted and cautioned that "every case is different." Pondimin, also known as fenfluramine, and Redux, a newer version approved in the middle of 1996, were the "fen" part of the widely prescribed combination for obesity. Wyeth, known at the time as American Home Products, sold both drugs in the U.S. Regulators did not find cause to pull off phentermine, a third drug and the other half of the combination.

Evidence showed the two drugs likely caused heart valve damage, leading the FDA to ask for the drugs' withdrawal. The year before, doctors wrote 18 million prescriptions for them.

Analysts appear unconcerned that the diet-drug liability will bankrupt Wyeth, rather, that the ongoing payments will limit the company's strategic opportunities and ability to pour money into research and development or other investments.

The diet-drug debacle has overshadowed Wyeth's strong fundamentals that otherwise make it a standout among drug companies, said Trevor Polischuk, an analyst with Orbimed Advisors LLC, a health-care asset management firm. Wyeth faces little generic exposure and projects five products will eclipse $1 billion this year.

Polischuk expects the situation will be clearer by the first quarter of next year, as more cases are resolved.

Meanwhile, thousands of claims still need resolution. Other than tobacco and asbestos cases, Wyeth's diet drugs rank as the largest product liability case ever, said Marc Bern, senior partner in the law firm Napoli Bern, which he said represents about 6,000 clients with claims outstanding.

"This is about people who put their faith and trust in a giant pharmaceutical company and have lost because of that trust," Bern said.