The U.S. Supreme Court said on Tuesday that it would hear an appeal by Merck & Co Inc of a ruling that reinstated a securities fraud lawsuit involving the company's disclosures to investors about its withdrawn Vioxx pain drug.

The justices agreed to consider whether the lawsuit can go forward. A U.S. appeals court in Philadelphia reinstated the lawsuit, which seeks billions of dollars in damages, after a federal judge in New Jersey had dismissed it on the grounds that the claims were time-barred due to the statute of limitations.

The Supreme Court will hear arguments in the case during its upcoming term that begins in October.

The securities fraud lawsuit is unrelated to the $4.85 billion settlement between Merck and plaintiffs who filed personal injury lawsuits against the company over Vioxx.

Merck withdrew Vioxx in 2004 after a clinical trial showed an increased risk of heart attacks and strokes. Merck shares plunged 27 percent on the day of the withdrawal and fell further in the following months.

A dissenting judge on the appeals court said the case should have been dismissed because the investors had waited more than two years after the first warnings that Vioxx might be unsafe, meaning the lawsuit had been filed too late to go forward.

Merck said it was pleased the high court agreed to hear the appeal and resolve a split among federal appeals courts around the country on the important issue of what constitutes inquiry notice to would-be investors under the securities laws.

We believe that the district court in this case correctly held that the intense public discussion of data surrounding Vioxx had put investors on inquiry notice of the relevant issues long before Merck became aware of and announced the new scientific information that led to the voluntary withdrawal, it said.

Merck said the evidence showed the company properly informed the U.S. Food and Drug Administration and the scientific community about the scientific data as it emerged.

(Reporting by James Vicini; Editing by Lisa Von Ahn and Tim Dobbyn)