Biotech Values

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Most analysts and scientists think the trial was halted because Niaspan outperformed Zetia

To elaborate on this:

Merck Cholesterol Pill Sales May Drop 20% After Study

http://www.bloomberg.com/apps/news?pid=20601103&sid=akOuKzNzadaU#

By Shannon Pettypiece

Nov. 10 (Bloomberg) -- Merck & Co. may face a third negative study result within two years for its cholesterol pills Vytorin and Zetia, which have lost 14 percent of sales since January and could sink further.

The latest trial, scheduled to be presented Nov. 16, pits Merck’s drugs against Abbott Laboratories’ Niaspan, a modified form of vitamin B3 used to maintain healthy cholesterol levels. A win by Niaspan may discourage more doctors from prescribing Merck’s Vytorin and its component Zetia, said Steven Nissen, chief of cardiology at the Cleveland Clinic in Ohio.

The results are likely to show that Niaspan unclogged arteries better than Vytorin, said Seamus Fernandez, a Leerink Swann & Co. analyst in Boston, and Larry Biegelsen, an analyst with Wells Fargo Advisors LLC in New York. Such a finding may trim revenue for Vytorin and Zetia by $800 million yearly, or 20 percent, Fernandez said. Since January, sales have declined by $480 million to about $3 billion.

“The longer Zetia goes with a series of trials that are not favorable, the more questions get raised about whether it is a good choice” for doctors and patients, Nissen said in a Nov. 5 telephone interview. This study “is another major test for Vytorin and Zetia, which have come under a lot of criticism regarding whether or not they are, in fact, effective.”

Merck, of Whitehouse Station, New Jersey, fell 2 cents to $33.41 at 9:39 a.m. in New York Stock Exchange composite trading. The shares had jumped 16 percent in the 12 months before today, beating a 13 percent increase in the Standard & Poor’s 500 Pharmaceutical Index. Abbott, of Abbott Park, Illinois, climbed 5 cents to $52.40.

Speculation in July

The latest findings on Merck’s drugs will be reported at the American Heart Association meeting that begins Nov. 15 in Orlando, Florida. Speculation on the outcome began in July after researchers halted the trial about four months early. While they said safety wasn’t an issue, they didn’t give a reason for stopping the study.

The Abbott-funded trial began in November 2006, and was expected to enroll 400 patients.

Niaspan, approved for sale in the U.S. in 1997, is designed to raise HDL, the so-called good cholesterol. Vytorin combines Merck’s bad-cholesterol blocker Zocor, now available as a generic drug, with Zetia. It’s designed to hamper LDL cholesterol production in the liver and block its absorption from food. Vytorin was cleared by U.S. regulators in July 2004.

Merck is preparing to defend its drug, said Chief Executive Officer Richard T. Clark. Doctors shouldn’t change how they treat patients based on the findings, he said.

‘Well-Validated Guideline’

“I wouldn’t put too much emphasis on this study,” Clark said in a Nov. 4 interview. “We continue to have confidence in the efficacy and safety profile of our products, and lowering LDL remains a well-validated guideline.”

Fernandez, the Leerink Swann analyst, said in a note to investors yesterday that a survey conducted for his company found that 80 percent of 31 U.S. cardiologists surveyed, and 51 percent of 72 primary-care doctors in the poll, expect Niaspan to beat Vytorin in the research.

“We don’t know the data,” Fernandez said in an Oct. 29 interview. “Our strong suspicion, though, is that it will more likely than not favor Niaspan.”

If he’s correct, the finding would be the third since January 2008 to show negative results. The first trial, dubbed Enhance, found Vytorin didn’t help artery health more than Merck’s Zocor, sold generically as simvastatin for 77 percent less. Data presented in July 2008, in a trial called SEAS, found more patients taking Vytorin developed cancer than those on a placebo, a finding later contradicted in another study.

Studies Misinterpreted

After each report, Merck said doctors shouldn’t change treatment based on the results and urged them to wait for data from a larger trial to be completed in 2012. Merck has said both of those studies were misinterpreted by doctors and patients.

The newest research, called Arbiter-6 Halts, is designed to determined whether raising levels of HDL, or high-density lipoprotein, cholesterol, which helps ferry plaque out of the arteries, is better at unclogging arteries than lowering levels of LDL, or low-density lipoprotein, cholesterol.

In the trial, researchers took pictures of the artery leading to the brain to measure the vessel’s thickness in patients taking simvastatin with either Zetia or Niaspan over 14 months. Because plaque can clog arteries and restrict blood flow to the heart and brain, such measurements may predict risk of heart attack or stroke.

Richard Pasternak, head of Merck’s global center for scientific affairs, said the Arbiter study is small and used a non-clinical measure, or surrogate marker, rather than evaluating the rate of heart attacks and stroke.

‘Potentially Dangerous’

Pasternak said he is concerned the results will be interpreted in a way that may cause patients who benefit from Vytorin or Zetia to stop taking the medications.

“For a clinician to make a decision based on this is potentially dangerous,” Pasternak said in a Nov. 6 telephone interview.

Studies using this imaging technology have been unreliable in the past, Pasternak said. He also said the study design was skewed in Niaspan’s favor because the patients had low levels of HDL good cholesterol and well-controlled levels of LDL bad cholesterol.

Cardiologist Chris Cannon, an associate professor of medicine at Harvard Medical School in Boston, said the Arbiter study shouldn’t be a substitute for large-scale trials and cautioned against drawing definitive conclusions based on the data.

Small Studies

“We need to be very careful in using small mechanistic trials to change clinical practice,” Cannon said in a Nov. 6 e- mail. “To date, all the studies have been very small with 10-20 clinical events, and thus interesting scientifically, but would not generally lead to changes in clinical practice guidelines.”

Unlike with older cholesterol drugs known as statins, such as Lipitor, made by New York-based Pfizer Inc., there are no studies that have measured whether the addition of Zetia to a statin, the basis of Vytorin, can reduce the risk of heart attack and stroke.

“The ultimate test of the value of any drug is its effect on the things that we really care about, which is morbidity and mortality,” Nissen said, adding he would use Zetia in cases where a patient can’t tolerate a statin.

Merck is working on one such study now that will involve 18,000 patients and compare Vytorin with simvastatin. The study may not be finished until 2012, more than a decade after Zetia came on the market. Vytorin won U.S. regulatory approval based on its ability to lower levels of LDL cholesterol, which the Food and Drug Administration says is a risk factor for heart attacks and strokes.

Assuming Bad News

Analysts and investors are assuming bad news for Vytorin based on the Arbiter trial’s design and previous study findings, said Wells Fargo’s Biegelsen in an Oct. 26 research report. He said the results could give a moderate boost to Niaspan sales and Abbott’s share price.

“If Niaspan is superior to Zetia in the study, we expect the data to provide the Niaspan franchise with a shot in the arm especially if there are significantly fewer events in the Niaspan group,” Biegelsen said.

If the study findings don’t favor Vytorin and Zetia, it will be more evidence of uncertainty about the drugs’ benefits, said the Cleveland Clinic’s Nissen. Vytorin and Zetia shouldn’t have been so widely prescribed because there is no evidence they offer a long-term benefit, he said.

“The difference with Zetia is that we have very good alternatives to lower LDL that are of proven value,” Nissen said. “It will have some impact on my behavior based on the results of the trial. If the study has a compelling result, as in one drug does better than the other, it will definitely have an impact.”