Fissures in Merck, Schering relationship?

Are fault lines in the Merck/Schering-Plough joint venture beginning to open up? Market-watchers are reading the earnings-call transcripts--and the tea leaves--and finding evidence of "the diverging interests of Merck... and its partner."

Part of the problem is that Merck depends less on Vytorin revenues than Schering does. Merck was perfectly willing to admit that it expects a $700 million hit on Vytorin this year, but Schering danced around that prospect like a fire-walker. "We really have no model" for figuring out how much Zetia and Vytorin sales might drop, Schering CEO Fred Hassan told analysts during his earnings call yesterday. A big company like Schering, with plenty of financial types at its disposal? Color the pundits skeptical

Plus, as Forbes points out, Merck is hoping to launch a new heart med this year, Cordaptive, a tweaked form of niacin that could be an add-on to statins--just as Schering's Zetia is. Imagine patients taking Merck's Zocor--one half of Vytorin--along with Cordaptive instead of Zocor-plus-Zetia, otherwise known as, yes, Vytorin. Why would Merck mind that? Schering, on the other hand, would mind it quite a bit.

The "trouble in Merck/Schering-Plough land" chatter must have some traction, because Merck CEO Richard Clark (photo) addressed it in a Star-Ledger interview published today. The fallout from the controversial Enhance study "won't result in any changes" to the partnership, the Star-Ledger reports. "The joint venture is well-managed," Clark said. "This was an unfortunate outcome."

- see the Forbes article
- check out the item at BNET's pharma blog
- read the Star-Ledger piece

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