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Leerink Outlines Gloom Potential for Merck/Schering's $2B Zetia Franchise

Analysts at Leerink Swann have fleshed out their scenario in which the result of Merck and Schering-Plough's "Arbiter 6" comparison of their Zetia cholesterol drug versus Abbott Labs' Niaspan went badly for Zetia. The trial was ended mysteriously and suddenly earlier this year, prompting conjecture that one arm showed a dramatic benefit that all the patients should have received.

If the imaging study did favor Niaspan, then the worry is that Cleveland Clinic's Steve Nissen would step in and urge restricted use of Zetia. (Note how "Fear of Steve" is becoming a real mover of the stock market.) The American Heart Association is looking for an "independent thought leader" to present the results to its November meeting, Leerink said in a note to investors:
Commercial importance of ARBITER 6 to Zetia/Vytorin should not be ignored. Consultants point out that a negative outcome could have more impact on Zetia/Vytorin than we believe since:
(1) a negative outcome would make ARBITER 6 the third study where Zetia/Vytorin failed to demonstrate superiority on the primary endpoint; and
(2) the difference in effect on atherosclerosis may be substantial given the short treatment duration. Another risk is if the data are championed by Steve Nissen. A win for Zetia seems like a low probability but would be a major surprise relative to expectations.
The drug currently earns about $2.2 billion in revenues a year for Merck and Schering.

Leerink bases its guesswork on a survey of doctors and consultants.

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