A Weak Prognosis for Vytorin and Zetia

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Lower Not Always Better

But as doctors kept lowering the target for acceptable levels of LDL in the blood, statins weren't always potent enough. Plus, many Americans have come to believe that lower is always better. So in 2002, Schering-Plough introduced Zetia, which lowers cholesterol by another mechanism; it reduces absorption of cholesterol by the intestines. The company then combined Zetia with a statin originally sold by Merck (simvastatin) to create Vytorin, which was approved by the Food & Drug Administration in 2004.

Both Zetia and Vytorin were approved simply because they lower "bad" cholesterol, not because they were shown to actually reduce heart disease or prevent deaths. Both have been aggressively marketed. Since there still are doubts about whether cholesterol lowering really is a magic bullet, the companies began studies to try to show actual clinical benefits from the drugs.

One such study was the one presented at the recent ACC meeting. It gave patients with genetically high cholesterol either statins alone or Zetia plus a statin. Then doctors then examined the patients' arteries to see if the blood vessels were getting thicker, a sign of atherosclerosis.

The study quickly became controversial. The drugmakers delayed announcing the results, prompting scientific outrage and the threat of a congressional investigation. They finally released the data on Jan. 14. Adding Zetia to the statin did indeed reduce bad cholesterol more than the statin alone did. But that didn't improve the patients' arteries. In fact, the arteries thickened more when they took the combination than with the statin alone.

Both companies' stocks took a beating in January when the results came out. At the time, however, doctors urged caution. They pointed out there are many reasons the study is not definitive. The test that looks at the thickness of arteries may not predict the likelihood of future heart attacks, for instance. In addition, patients who have high cholesterol because of genetics may not be representative of the general population. Doctors weren't going to be stampeded into changing their prescribing by headlines in the press.

Waiting for the Big Trial

Since then, the facts haven't changed. What has changed is that the medical community has had more time to digest the results. And the Mar. 31 session on the trial at the ACC meeting was crucial. This was no longer the press raising doubts, but prominent physicians telling their peers not to prescribe the drugs. That's why analysts are rushing to reduce their estimates for the sales of Zetia and Vytorin, and to downgrade the stocks. One Schering-Plough sales rep posted a bitter message hoping the company would offer buyouts to the sales reps so that "we can rebuild our reputations and get another job with a more credible company."

The long-term prognosis, though, isn't clear. The crucial question is whether Zetia (alone or in combination) reduces heart disease and prevents death. The answer should come from a big trial dubbed Improve-It. If the trial results, due in four years, show that the drugs don't work, it would be the final nail in the coffin for Zetia—and a severe blow to the whole idea that aggressively lowering cholesterol is crucial.

Says LaRosa, "If Improve-It does not show clinical benefits, then we will have to say either that ezetimibe [Zetia] in some way promotes atherosclerosis, or that everything that we know about lowering LDL is wrong."

The Early Results Aren't Promising

The early signs from the Improve-It trial are not good. Schering-Plough recently announced it was expanding the number of patients in the study. "There is only one way to interpret that. It's negative," says analyst Krensavage. Adding more patients means that the beneficial effects of the drug may be smaller than the company expected, he says. To spot an effect, therefore, the trial has to have more patients.

Schering's Dr. Spiegel agrees that the Improve-It trial is more important than ever now. But he says that the expansion (from 12,500 patients to 18,000) is needed. "No one has seen the results, but we do know that the number of events [such as heart attacks] occurring is less than expected," he says. So adding patients will get the results more quickly, he says.

Krensavage expects Schering-Plough's stock will climb from the low levels reached on Mar. 31 (around $14), but perhaps not until the company trims costs to reflect the plunge in Zetia and Vytorin sales. "The concern is that earnings will be decimated," he explains. "But if you put a zero for sales of Vytorin and Zetia, the stock still is trading at 1.7 times revenue. It is worth at least three times revenue, which is $28 per share." The company will have to cut back expenses to compensate for the reduced sales, he says.

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Carey is a senior correspondent for BusinessWeek in Washington .