WHITEHOUSE STATION, N.J.—In a development some analysts arecalling an "embarrassing gaffe" for a large pharma, Merck & Co. Inc.announced last week that the U.S. Food and Drug Administration (FDA) hasrefused to file its application for a new combination cholesterol pill thatwould combine Merck's Zetia with Pfizer Inc.'s Lipitor.
Merck announced the rejection in a 10-Q filing with the U.S.Securities and Exchange Commission (SEC). The company filed a New DrugApplication with the FDA in September. The application sought approval forMK-0653C, a combination of ezetimibe, the active ingredient in cholesteroldrug, Zetia, with atorvastatin, the active ingredient in Pfizer's Lipitor.
The combo may have been a boon to both companies. Lipitor'spatent expires in 2011, while sales of Zetia, which was developed by Merck'spartner Schering-Plough, have been falling for more than a year. Merck andSchering-Plough are also seeing slow sales for its combination cholesterol pillVytorin, a combination of Zetia and Zocor, which lost patent protection in2006. Sales of both cholesterol combo drugs have been slow since January 2008,when a study revealed that Vytorin lowers bad cholesterol but does not provideany significant benefit over generic Zocor in reducing the risk of heartdisease or stroke. For the nine months ended Sept. 30, combined sales ofVytorin and Zetia dropped to $3 billion from $3.49 billion in the year-agoperiod.
According to its SEC filing, "the FDA has identifiedadditional manufacturing and stability data that are needed, and the company isassessing the FDA's response in order to determine a new timetable for filing."
While it's common for the FDA to reject NDAs, the agencyusually only issues refuse-to-file letters when NDAs are "incomplete." Thisfact was not lost on analysts, who noted that this event usually happens tosmall drugmakers with less experience about what the FDA wants.
"For it to happen to Merck, which has plenty of experiencesubmitting NDAs over its long history, is really embarrassing," Motley Foolcontributor Brian Orelli wrote. "Think Merck's regulatory department might be alittle distracted, worrying about job cuts after the merger withSchering-Plough?"
Brandweek contributor Jim Edwards called the news "amateurhour" at Merck, adding,
"that's an unheard of gaffe for a Big Pharma firm."
Following the news, Merck shares rose 33 cents, or 1.1percent, to close at $31.26. Schering-Plough gained 20 cents to end at $28.40,while Pfizer shares fell 8 cents to $16.95.