NEW YORK (CNNMoney.com) - Merck stock tumbled Thursday, a day after the nation's No. 2 drugmaker was found liable for the heart attack of a New Jersey man who took Vioxx and a jury awarded $4.5 million in damages.

Merck (down $1.15 to $34.84, Research) stock ended the session 3.2 percent lower on the New York Stock Exchange.

A jury in Atlantic City, N.J., late Wednesday awarded John McDarby and his wife $4.5 million in compensatory damages in their suit against Merck. But in a split verdict, Tom Cona, the second plaintiff in the case, received virtually no award. Both men had blamed their non-fatal heart attacks on the arthritis painkiller.

The part of the trial involving punitive damages, which could be five times compensatory damages, began Thursday with former Merck chief executive Raymond Gilmartin testifying that the drug maker saw no increased heart attack risk in a study in 2000 involving the now-withdrawn painkiller Vioxx. (Full story.)

Merck has won verdicts in two trials and has been liable in two others. The drugmaker, based in Whitehouse Station, N.J., still faces about 10,000 lawsuits from plaintiffs who blame the arthritis painkiller Vioxx for their heart attacks. Merck pulled Vioxx off the market on Sept. 30, 2004 after a study demonstrated that the drug increased the risk of heart attacks and strokes.

Despite the drop in stock price following Wednesday's verdict, some analysts said that possible liability of up to $30 billion has been priced into the stock, and that Merck shares should eventually recover.

Robert Hazlett, analyst for Suntrust Robinson Humphrey, said Merck has the resources and flexibility to withstand the worse-case scenario of being hit with tens of billions of dollars in Vioxx-related damages.

"I'm sure Merck will win some cases and I'm sure Merck will lose some cases, and I'm sure the stock will be volatile as a result," said Hazlett, who rates Merck a "buy" with a 12-18 month price target of $40.

"But they have enormous financial flexibility, because they need it. It is far from clear that they will ever have to pay out a very large number," he added. "I expect them to be able to effectively conduct their business regardless of what happens with individual Vioxx cases."

Barbara Ryan, an analyst for Deutsche Bank North America, said all verdicts will probably be followed by knee-jerk stock movement but the company's long-term financial standing shouldn't be judged based on the first few cases.

"You have 10,000 cases pending and four cases have gone to trial," said Ryan. "I don't think there's anywhere near enough cases to make an assessment on what the liability is and how this will play in court." Ryan rates Merck a "buy" with a price target of $38, up from $34.50 in Thursday trading.

Even in the worst-case scenario, Merck has the resources and flexibility to be able to withstand negative outcomes with the Vioxx litigation, said Hazlett.

------------------

For more on Gilmartin's testimony, click here.

For all of today's top headlines, click here.