Analyst: Singulair drop threatens Merck

Just what Merck doesn't need: Its asthma-and-allergy med Singulair is losing ground, with new scrips down year-over-year for 13 weeks straight. For the week ended May 30, the drop was 16 percent, and year to date, Singulair has fallen off by 4 percent. That's according to Sanford Bernstein analyst Tim Anderson, who's worried that Singulair performance might seriously undermine Merck's projected 2008 sales growth. The company has projected worldwide year-over-year increases in Singulair sales of 8 percent to 13 percent.

Anderson speculates on possible causes for the reversal. A light allergy season? Competition from a newly OTC Zyrtec? Headlines about the FDA's flagging Singulair as having a potential psychiatric problems? (Merck says safety isn't the reason for the slowdown.)

"As Singulair is Merck's single biggest drug--with 2007 sales of $4.3 billion, up 19 percent year-over-year, and representing 18 percent of total company sales--these trends are worrisome," Anderson writes in a note to investors. "Internationally, Singulair performance may well be better, but the U.S. accounts for nearly three-quarters of total Singulair sales." Even if scrips stopped dropping now, he notes, the drug would have a tough time making those sales goals.

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