NEW YORK (CNNMoney.com) - Merck is working on an AIDS drug that isn't likely to make much money, but it might, just might, help it cast off that bad Vioxx image.

A successful AIDS drug would be the "holy grail" for Merck in repairing its tarnished reputation, said Fran Hawthorne, author of "The Merck Druggernaut."

"A drug for AIDS is way up there in terms of getting good publicity for Merck, as well as being good for humanity." said Hawthorne. "A drug for something like AIDS captures the imagination and the headlines almost like nothing else, because it's potentially fatal, it's a hot topic, it affects famous people, and it has a huge core of activists who are out there."

Merck (up $0.14 to $35.30, Research), a drug giant based Whitehouse Station, N.J., faces about 10,000 lawsuits related to its arthritis painkiller Vioxx, which it pulled off the market in 2004 after a study showed that the drug increased the risks of heart attacks and strokes. The scandal has hurt the company's image and dragged down its stock price.

But Merck is also one of the industry leaders in developing drugs and vaccines for the treatment and prevention of HIV, the virus that causes AIDS. Merck is conducting phase 3, the final stage in testing, on the experimental drug MK-0518 for the treatment of HIV. Merck hopes to file MK-0518 with the Food and Drug Administration in 2007.

"The drug companies have been on the bad side of the media for four or five years," said Merrill Matthews, medical ethics expert and visiting scholar for the Institute for Policy Innovation. "It may well be that [MK-0518] it turns it around by getting a lot of positive press out there."

MK-0518 is an anti-retroviral that reduces the amount of HIV circulating in the blood. If the drug is successful, it would prevent full-blown AIDS, or acquired immunodeficiency syndrome, and related infections. This is crucial, because AIDS patients typically die when their ravaged immune systems succumb to pneumonia and other illnesses.

But analysts aren't calling this drug a potential blockbuster, despite the fact that more than 40 million people are living with AIDS worldwide. Barbara Ryan, analyst for Deutsche Bank North America, projects that MK-0518's annual sales will reach a mere $120 million by 2009: not much for a company with 2005 sales of $22 billion.

Why are sales projections so slim? Two-thirds of the world's AIDS patients are sub-Saharan Africans, and most of them are too poor to afford the drugs they need. As a result, drug makers often slash prices for HIV treatments in Third World markets, or give them away. Many of the drug makers involved in the $4 billion HIV industry, including Pfizer (up $0.12 to $26.07, Research), Bristol-Myers Squibb (up $0.04 to $22.81, Research), GlaxoSmithKline (down $0.13 to $54.55, Research), Abbott Laboratories (down $0.23 to $45.02, Research), Sanofi-Aventis (up $0.16 to $45.08, Research), among others, have gotten involved in humanitarian activities in the Third World.

Merck has been working on HIV vaccines and drugs since 1984, not long after the first HIV case was identified in San Francisco. Merck and Sanofi-Aventis are both testing experimental vaccines for HIV that could revolutionize health care if successful, though analysts say the odds of success are long. But Merck is much further along with its drug-in-testing, MK-0518.

Dr. John Abramson, a clinical instructor at Harvard University, former family doctor and consultant to plaintiff attorneys in Vioxx cases, said that Merck and other drug makers have no choice but to reduce prices for the Third World, or they turn their back on dying AIDS patients and a potential market, however paltry it may be.

"I think the drug companies did a very good thing to make those drugs available to developing countries, where they're not going to make retail prices anyway," said Abramson, author of "Overdosed America: The Broken Promise of American Medicine."

Merck spokeswoman Janet Skidmore said her company is working on AIDS drugs and vaccines not just to make money or improve its image, but for the betterment of humanity.

Matthews of the Institute for Policy Innovation said that statements like that are not to be dismissed. Matthews said that, in a private discussion last year about AIDS research, a Merck executive told him, "'We're getting into this because it's the right thing to do.' And there was no press around when he said that."

To read about the hunt for the elusive AIDS vaccine, click here.