Finally, the results of the IMPROVE-IT study are being awaited eagerly to understand the efficacy of the Vytorin-Zetia combination versus simvastatin. Vytorin is the combination of Merck’s statin and simvastatin with Zetia, Merck’s cholesterol absorption inhibitor. Both drugs, when administered singularly, lower LDL cholesterol.
But, Merck & Co., Inc. (NYSE:MRK) considered combining both the drugs into one pill to lower LDL levels even further in patients. Since this new drug would be attacking LDL levels in two different ways, perhaps greater LDL lowering could be achieved than before.
Earlier studies on Vytorin revealed that the drug lowered LDL to levels about 7%-10% lower than that achieved by atorvastatin. However, the significance of this level of lowering is questionable. In order to study whether Vytorin would reduce cardiovascular attacks, Merck launched IMPROVE-IT, an 18,000 patient trial comparing Vytorin to simvastatin.
In my opinion, it would have made more sense to have launched a trial showing the efficacy of Vytorin versus atorvastatin, which is a more powerful statin compared to simvastatin.
In case IMPROVE-IT shows that Vytorin provides better outcomes than simvastatin alone, nothing quite substantial is established. This is because simvastatin is known to be a weaker statin than atorvastatin or rosuvastatin. Physicians are unlikely to use the more expensive Vytorin instead of the cheaper, generic atorvastatin, unless substantial efficacy is established.
Additionally, Zetia will be off-patent in 2016, which will make it available for much cheaper prices as a generic. Despite the inconvenience of taking two pills, patients might prefer going for the two generic molecules rather than the more expensive Vytorin.
On the other hand, if IMPROVE-IT shows Vytorin to be not much different from simvastatin, both Vytorin and Zetia would lose out because simastatin alone would be considered good enough for treatment, as Zetia’s cardiovascular benefits would be considered negligible or non-existent.
IMPROVE-IT results will add to our basic understanding of LDL cholesterol and heart disease treatments, but it is not clear how these results will immediately benefit Merck commercially. Merck should have conducted a study that would clearly show the benefits of Vytorin, or not done one at all, because carrying out a study like IMPROVE-IT can also suggest that Merck does not have the confidence to pit Vytorin against atorvastatin in a large-scale clinical trial.
Conclusion
While paying a good dividend of about 4% and being a well established company (with a market cap of $141.57 billion), operating internationally helps boost investor confidence. Merck & Co., Inc. (NYSE:MRK)’s drug pipeline shows uncertainty at this stage in my opinion, and I would wait and watch a bit longer before considering an investment in the company.
Additionally, operating income has now steadily started increasing (about 20% increase was achieved last year), but its sustainability is uncertain. The company’s stock has started performing better than Dow Jones and the S&P 500 of late, probably owing to the positive news from FDA’s review of the pill form of Merck’s drug, Noxafil, which is used to treat fungal infections.
Let us see whether the pill form gets approved and how much of a valuable addition it is considered by physicians. Singulair’s sales have dropped, but Januvia and Janumet (used to treat type 2 diabetes) are doing well. Tredaptive has failed a Phase III trial, but Suvorexant and Vintafolide may have a brighter future. As of now, I wouldn’t say sell, but rather hold, for those already invested in Merck.
Shas Dey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
