- The Washington Times - Monday, March 31, 2008

NEW YORK (AP) — Shares of Merck and Schering-Plough plunged today to their lowest levels in years as new clinical data raised questions about their cholesterol drugs.

The companies market the cholesterol drug Vytorin through a joint venture, but earlier this year, partial results from a clinical study showed that Vytorin was no more effective at limiting plaque buildup than Merck’s Zocor, a drug that is already available in generic form. Vytorin is a combination of Zetia and Zocor.

Full results from that trial were released yesterday. Analysts said they saw little positive news and expected sales of Vytorin and Schering-Plough’s drug Zetia to keep declining.

Schering-Plough shares plunged 26.4 percent to $14.33 in early trading, touching their lowest levels since August 1996. Merck shares fell 16 percent to $37.41, their lowest since June 2006.

Wall Street expects prescriptions of Vytorin to decline further in the wake of a recommendation by leading physicians to use the drug only after initial therapy with older drugs like Lipitor and Crestor.

Lehman Brothers analyst Charles Butler downgraded Schering-Plough shares to “Equal Weight” from “Overweight” on the news, and cut his price target to $20 per share from $35.

He said prescriptions of Vytorin will keep falling, and because Schering-Plough relies heavily on the joint venture, he slashed his profit estimates over the next five years.

UBS analyst Roopesh Patel, meanwhile, maintained a “Buy” rating for Merck, expecting a continued drop in Vytorin/Zetia sales but calling it expected.

Besides the Vytorin news, Merck also halted enrollment in a study for the cholesterol drug Cordaptive, which uses the same ultrasound measurement from the now-failed Vytorin study.

In addition, the company said high doses of the experimental obesity treatment taranabant are being cut out of a late-stage study because of higher rates of depression and anxiety.

AP Business Writer Marley Seaman in New York contributed to this report.

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