Investors batter stock of Vytorin makers

NEW YORK -- Shares of Merck & Co. and Schering-Plough Corp. fell to record lows Monday, as analysts warned new clinical data would cause sales of their blockbuster cholesterol drug Vytorin to fall further.

The companies market Vytorin through a joint venture, but earlier this year, partial results from a clinical study showed it was no more effective at limiting plaque buildup than Merck's Zocor, a drug already available in generic form. Full results of that study were released Sunday.

Vytorin is a combination of Zocor and Schering-Plough's drug Zetia.

Schering-Plough shares plunged as low as $14, touching their lowest levels since August 1996. Merck shares fell as low as $36.82, their lowest since June 2006.

Leading physicians are now recommending the use of older drugs called statins before putting patients on Vytorin. Many physicians had prescribed Vytorin in lieu of higher doses of statins because of what some said was an undue fear of side effects.

"There was an irrationality to begin with," said Dr. John LaRosa, president of State University of New York Downstate Medical Center.

One ultimate result of the outcome could be a tightening of regulatory standards at the FDA when it comes to approving cholesterol drugs, LaRosa said.

Federal and New York state officials have been investigating why results of the study were not released for nearly two years after the study ended. The company has also been chided for its aggressive marketing of the drug in that interim period.

According to TNS Media Intelligence, which tracks advertising spending, the company spent about $472.8 million on advertising since the drug hit the market.

Wall Street, meanwhile, expects prescriptions of Vytorin to decline further in the wake of a recommendation to use the drug only after initial therapy with older drugs like Pfizer Inc.'s Lipitor and AstraZeneca PLC's Crestor.

Lehman Brothers analyst Charles Butler downgraded Schering-Plough shares on the news, and cut his price target on the stock by more than 40 percent.

He said prescriptions of Vytorin will keep falling, and because Schering-Plough relies heavily on the joint venture, he slashed his profit estimates over the next five years.