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Here's a rather grim analysis from the Associated Press of Merck's (MRK) current status. The company's stock was recently downgraded by two analysts after last Friday's earnings call didn't go very well (links added by me below):

Future sales of Vytorin, a controversial combination drug on sale since 2004 that includes Zocor, and prospects for a crucial experimental osteoporosis drug called odanacatib were thrown into question Friday as Merck announced its fourth-quarter results. Company executives made some cryptic comments, suggesting significant problems with both drugs...

Merck said Friday that it won't apply for approval of odanacatib, a new type of osteoporosis drug, until 2014 instead of by this June. Management said it was reviewing safety and efficacy data from one study and now won't apply for approval until they have longer-term data from an extension study.

Executives also said a committee monitoring its 18,000-patient study of Vytorin, called IMPROVE-IT, had requested a new interim analysis of patient data in March. The study is meant to determine whether Vytorin reduces risk of heart attack, stroke and death in heart disease patients -- the ultimate purpose of cholesterol drugs -- but Merck executives, grilled by analysts on a conference call, wouldn't say that they're confident the study will show that benefit.

I wouldn't, either, if I were in their shoes. The Vytorin story has been long and complex, and that complexity comes from two sources: the drug's unique mechanism of action (at least the ezetimibe part), and the uncertainties of human lipid handling and its relationship to cardiovascular outcomes. Honestly, these things could go any way at all, and the same goes for Merck's high-profile push in CETP. A lot of the company is riding on some very uncertain science.

But I wonder, as I was speculating on in that last link, if that isn't where the whole industry is these days. By now, we've attacked all the things that we believe we really know something solid about. What's left is often big, important, potentially very profitable -- and risky enough to make you leave fingernail marks in the armrests of your chair. The higher up you sit, and the nicer the material that chair is made of, the more damage is being done to it.

Disclosure: None.

Source: Not Working Out So Well At Merck?