Merck dodged Zetia bullet, analysts say

The Arbiter 6 trial results may have gone against Merck's Zetia, but Wall Street nonetheless breathed a sigh of relief. The data wasn't as damaging as some had feared. Media coverage wasn't as bad as it could have been, analysts say; plenty of stories highlighted the small study's limitations, and certain vociferous critics of Merck's cholesterol franchise didn't dominate the news. And investors agreed, bidding up Merck's stock.

Now analysts are following up with predictions that the new data won't hit Zetia sales as much as initially feared. Some examples: "We expect limited commercial impact to the cholesterol franchise and believe the ARBITER overhang on Merck shares will lift following today's balanced editorials," said J.P. Morgan analyst Chris Schott in a research note (as quoted by Reuters). "The market worry was for a negative result," Credit Suisse analyst Catherine Arnold wrote (as quoted in the New York Times), "while the result was essentially no change for Zetia and positive results (plaque regression) for niacin."

That's good news for Merck, which was quick to criticize the Arbiter study and defend Zetia and its sister combination med Vytorin, which together have delivered billions in sales to the company's top line. Arnold suggested that even if the drugs' sales continue to fall--cutting into the franchise's profits by as much as 15 percent--the decline would be "manageable."

But don't break out the party hats just yet. Doctors said they'll be looking more favorably on niacin treatment, now that Arbiter showed Abbott Laboratories' Niaspan to deliver positive artery-clearing outcomes--at least for the patients who can tolerate it. The study, though limited, is making some think twice about using Zetia.

And though most cardiologists understand that the new data isn't definitive, they predict that some anxious patients will want to go off Zetia or Vytorin. Indeed, some already are asking to. Analysts say they'll be watching prescription patterns. So will we.

- read the Reuters news
- get more from the NYT
- check out the Associated Press coverage
- see the Reuters analysis

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