Vytorin Battle Pits Merck and SGP against Pfizer

Given investor reaction to the Vytorin/Zetia news yesterday, you might draw the conclusion the huge cholesterol drug franchise might be doomed.

Sure, analysts say, prescriptions and sales are gonna go down some more, but they're not going to zero. The drug may not have been as effective as had been hoped against a key heart disease measure, but it did lower bad cholesterol, triglycerides and a marker for heart attack risk more than Zocor alone.

Merck (MRK) and Schering-Plough (SGP) are already trying to promote that fact. Check out the two-page ad the companies took out in today's USA Today sports section. (The first page is the true ad, the second page is all the fine print on the label about side effects and stuff.) What I think is most notable about the message is that they come right out with it--and in boldface type, no less:

"VYTORIN has not been shown to reduce heart attacks or strokes more than Zocor alone."

On the flip side, Pfizer (PFE) has taken out a big ad in the Newark Star-Ledger (most of the large drug companies have major operations or their HQ in Jersey and tens of thousands of employees live there) for the past couple days. The copy says:

"Now you know. There's an important difference between Vytorin, Zetia, and Lipitor. Unlike Vytorin and Zetia, Lipitor is FDA-approved to reduce the risk of heart attacks, strokes...."

And now even the editorial cartoonists are jumping into the fray. Today's Star-Ledger opinion page features this little gem on Vytorin: "Take twice a day for no good reason. Side effects: falling stock prices, reduced executive bonuses, uncontrollable CEO weeping, job loss."

But in all seriousness, the Vytorin/Zetia aftermath may not be Schering's only challenge. There's a slew of analyst commentary and at least a couple of upgrades on Vertex Pharmaceuticals (VRTX) this morning.

What does that have to do with SGP? Well, the companies are racing to get new drugs approved for Hepatitis C and based on new data many analysts are saying it looks like VRTX's drug might be better than they thought it was and possibly better than Schering's.

In an exclusive interview with Jim Cramer on "Mad Money" last night SGP CEO Fred Hassan said, "This is a broad, strong company."

Its strength is certainly being put to the test.

Comments

[misinformed media]

These doctors are way out of control. Vytorin is a drug that lowers cholesterol better than Lipitor and Crestor. That is a fact.

The Enhance study was done on a small number of patients with very high cholesterol, over 300. You cannot reduce plaque build up until you get the ldl down to below 100.

Crestor recently stopped a study where it did notice a small amount of plaque regression. That study was done on patients with ldl of 170 and after high doses it came down by over 50% or about 80, below the 100 mark. Crestor is very potent, but is very toxic and many patients cannot handle it. Vytorin is much more tolerable. This is also something the Cardiac Panel did not address. Lipitor is the same as Crestor. Also, Zocor, which is part of Vytorin, is the same as Lipitor and Crestor. Zocor alone had no effect on the study group. Could it be the plaque build up in this group is just too stubborn, probably.

I think the doctors are way off base totally dismissing the fact that LDL is not the issue and the only issue is plaque regression. LDL is very important to a patients cardiac health.

I think the panel of cardiologists had an agenda which is why they did not even want to discuss Enhance in an open forum.

The media has to get together, get informed and stop shooting from the hip.