Report: Merck said to be testing lower dosage Zilmax to revive sales

Merck ($MRK) is financing a $1.85 million study being conducted at Texas Tech University to see if lower dosages of its lucrative but controversial cattle growth drug Zilmax could allow the company to reintroduce the product to U.S. and global markets and kick-start sales, Reuters reports.

The company voluntarily pulled Zilmax from the market in August 2013 following reports from farmers of hoofless and immobile heifers. Major U.S. meatpackers like Tyson and Cargill quickly refused to accept cattle treated with the product, which brought in $159 million in U.S. sales for Merck the year before it was pulled.

The news agency said the Texas Tech study is likely testing Zilmax at its FDA-approved full dosage of 6.8 grams per ton of feed for a 20-day period before slaughter in addition to lower dosages of about 60% and 80%. Funding for the study was quietly awarded in October, and neither Merck nor the university would comment about details of the research when asked by Reuters. The FDA, citing confidentiality regarding drug applications, also declined to comment.

In November, the company said that following a comprehensive review it found the product is safe when used according to its label. The FDA approved an updated label with a lower dose, and Merck filed to update Zilmax's label in Canada as well.

With Zilmax on the sidelines, rival pharma giants didn't waste time to fill the void. Feedlot operators quickly switched to using Optaflexx from Eli Lilly's ($LLY) Elanco unit. Zoetis ($ZTS) is also looking to jump into the fray with its own growth-promotion drug.

- check out Reuters' story