Merck, Schering-Plough Fall
On Vytorin Study Results
By PETER LOFTUS
March 31, 2008 12:35 p.m.
Shares in Merck & Co. and Schering-Plough Corp. plunged Monday after a panel of cardiologists said doctors should sharply cut their prescriptions of the companies' jointly marketed cholesterol drugs, Vytorin and Zetia.
The cardiologists made the recommendation at a conference Sunday in Chicago, where researchers presented full results of the so-called "Enhance" study. The patient trial showed the drugs were no better than an older, cheaper drug at slowing artery thickening, despite producing a greater drop in bad cholesterol levels.
Separately, Merck said early Monday that it was halting enrollment in a patient trial of an experimental cholesterol drug, saying researchers needed time to evaluate the study's design, which was similar to the Enhance study.
Until recently, both Merck and Schering-Plough had staged turnarounds that relied partly on sales and profit growth from Vytorin and Zetia. Now, future growth is in serious doubt.
Merck shares were off 15% at $37.80 in midday trading; it was the first time Merck shares traded below $40 since 2006. The stock exceeded $60 in December 2007, but has slumped badly since.
Schering-Plough's shares were off 26% at $14.33. The stock was above $30 as recently as October 2007.
Monday's losses erased about $14 billion of Merck's market capitalization and wiped out $8 billion of Schering-Plough's value.
Several analysts said the full data of the Enhance trial didn't contain significant surprises, but the recommendation of the cardiologist panel -- that Vytorin and Zetia be prescribed less -- was surprisingly negative.
Leerink Swann analyst Seamus Fernandez said in a research note that the panel recommendation and accompanying doctor and media reaction make it unlikely that U.S. prescriptions for Vytorin and Zetia will recover this year. Prescription volume has declined since January, when Merck and Schering-Plough first disclosed partial results of the Enhance study.
The Enhance data compared Vytorin -- which is a combination of Zetia and Zocor -- with Zocor alone. Zocor was a Merck blockbuster until it lost patent protection in 2006; it's now available as a cheaper, generic drug known as simvastatin.
Vytorin and Zetia have never been proven to be able to reduce the risk of heart disease more than simvastatin alone. The Enhance data hasn't fully settled the debate -- now researchers are awaiting a larger trial designed to test whether Vytorin can reduce heart attacks and deaths compared with simvastatin. But that trial may not be complete until 2012.
The bad news for Vytorin and Zetia could be good news for sales of generic simvastatin, Pfizer Inc.'s Lipitor and AstraZeneca PLC's Crestor. AstraZeneca's American depositary shares recently rose 85 cents, or 2.3%, to $37.39, while Pfizer was up 14 cents, or 0.7%, at $20.64.
online.wsj.com |
