Merck Updates: Outcome of Large Clinical Study On Tredaptive Soon

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Merck's ( MRK ) plan to seek approval of the U.S. FDA for its investigational cardiovascular drug Tredaptive early next year seems to be on the right track as researchers plan to announce the much anticipated results of a large clinical trial "HPS2-Thrive" by early 2013. Tredaptive reduces bad cholesterol in the blood and the clinical trial is being conducted  to see the drug's efficacy in reducing the risk of heart attacks and strokes. Merck had earlier unsuccessfully applied for U.S. FDA approval back in 2007, and the FDA asked to wait for the outcome of HSP2-Thrive.

The company may also be getting ready for approval of another investigational cardiovascular drug, Vorapaxar, a blood thinner, at the same time. If approved, these drugs could fend-off a decline in sales within the company's cardiovascular franchise even as the potential of these drugs remains uncertain. Below we take a look at the prospects of company's cardiovascular division.

Check out our complete analysis of Merck

Declining Cardiovascular Sales

Merck's sales from cardiovascular drugs were above $10 billion in 2007 but declined to under $7 billion in 2011 mainly due to Cozaar/Hyzaar losing patent exclusivity in major markets including the U.S. and Europe in 2010. Now the company is dependent on Zetia and Vytorin, which together bring nearly 8% of its total sales and 50% of cardiovascular sales. Going forward, we expect total cardiovascular sales (excluding pipeline drugs) to decline due to a number of factors. Zocor, which already lost its patent protection, will likely be further affected by the launching of generic versions of Pfizer's ( PFE ) Lipitor, which was the world's largest selling drug until last year.

New Drugs Could Offset Declines

Due to the aforementioned factors, Merck is hoping for approval for the new drugs sooner rather than later. However, there are a number of concerns about these new drugs. According to some clinical studies, while Vorapaxar lowered the risk of cardiovascular diseases, it also led to an increased risk of major bleeding, including bleeding in the head. Merck will seek approval for use of the drug to prevent cardiovascular issues instead of a broader use, including patients who have suffered a stroke. Additionally, Abbott Labs's ( ABT ) Niaspan, a competing drug, is going off-patent in September 2013. This will lead to the launch of cheap generic versions of Niaspan in the market, which could hurt Tredaptive's sales potential. We have, accordingly, forecast the drugs' expected sales on the lower side in our model.

Another experimental cardiovascular drug, Anacetrapib, may hold more promise than the aforementioned drugs. Anacetrapib preserved HDL function in preclinical studies and increased reverse cholesterol transport. The recent termination of Roche Holdings' ( RHHBY ) cholesterol drug Dalcetrapib gives Anacetrapib the opportunity to grab a larger share of the addressable market. Another experimental drug, MK-0524A, has also recently demonstrated the ability to lower LDL-cholesterol ("LDL-C" or "bad" cholesterol) and raise HDL-cholesterol ("HDL-C" or "good" cholesterol) and lower triglycerides with significantly less flushing than traditional extended release of niacin alone. However these drugs are not likely to receive FDA approval anytime soon. However, they could be launched just before Zetia and Vytorin lose their patent exclusivity.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks , US Markets

Referenced Stocks: ABT , JNJ , MRK , PFE , RHHBY

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