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Executive Summary

Merck plans to file an NDA for its cholesterol-lowering agent lovastatin, formerly called mevinolin, on Nov. 14, Chairman and President, Roy Vagelos, MD, told securities analysts in New York City on Nov. 4. "In long-term clinical trials lovastatin continues to show a high degree of safety and more effectiveness than any known drug in reducing the elevated levels of low-density lipoproteins that are correlated with coronary artery disease," Vagelos declared. The class of anticholesterol drugs, HMG-CoA reductase agents, "inhibit an enzyme which is the key step in making cholesterol," he explained. Vagelos portrayed lovastatin as a product for the late 1980s with an impact like Aldomet in the 1960s. The Merck exec compared the market potential of lovastatin and its effect on treatment practices to the first safe and effective antihypertensive agents. Citing a recent study in Lancet, Vagelos commented: "There's no question that most people in the U.S. and in the developed world have cholesterol that is higher than it should be. It is going to be a matter of deciding what level of cholesterol needs to be treated by drug." Vagelos noted that patent protection for lovastatin "is essentially limited to the U.S." However, he said, Merck has "worldwide coverage for a successor product in the same class -- MK-733, previously called synvinolin -- which is about one year behind lovastatin in development." In response to an analyst's question on the potential for cataract problems with this class of drug, Vagelos replied that cataracts had appeared in high-dose lovastatin dog studies. "Because of that, and the history of other drugs in this area," Vagelos said, "we have looked very widely and very carefully ophthalmologically in all our clinical studies and discovered that there is no difference between those people on our drug and in our control group in so far as . . . getting anything that smacks of being a cataract." With the lovastatin NDA filing, Merck continues to move new drugs into the approval process to complement the new product momentum established this year with four launches. Vagelos said that Merck will begin two of those launches -- for the H[2] antagonist Pepcid and the quinoline anti-infective Noroxin -- the week of Nov. 10. Asked how Merck would price Pepcid against Tagamet and Zantac, Vagelos said that the one day (40 mg) therapy of Pepcid would be priced at $1.42, which he said was equal to a once-daily dose of Tagamet and slightly under Zantac. Pepcid was approved by FDA on Oct. 15 ("The Pink Sheet" Oct. 20, T&G-1). Pepcid's advantage, Vagelos maintained, is that the drug is the "first inherently once-a-day" H[2] antagonist. He predicted that the advantages associated with the drug's potency would be more apparent with Pepcid I.V. solution in the hospital market. Vagelos said that I.V. Pepcid "will be administered much less often than either of the other two drugs because it is inherently longer acting." He also noted that Pepcid "has the same profile as Zantac in so far as it has no side effects that are problems with Tagamet." With the recent approvals of Pepcid, Recombivax HB, Vaseretic and Noroxin, Merck has successfully guided seven new products to the marketing stage since the approval of Tonocard in late 1984. Of the nearly fifteen products nearing, or under, FDA review in late 1983, only a few have not reached FDA approval, including the antibiotic fludalanine/pentizidone, Zelmid (zimelidine), Losec (omeprazole), the antihypertensive MK-286, and Varivax, a varicella vaccine for chicken pox. The last three compounds listed are still in active development. Losec, in limbo for almost 18 months while human studies were suspended and rat tumor data was reviewed, is now in late Phase III studies. Asked to comment on how Merck will position Losec without hurting Pepcid, Vagelos said that Merck sees the Pepcid/Losec situation "as very similar to Indocin, Clinoril and Dolobid where we have three NSAIDs [nonsteroidal anti-inflammataory drugs] in the same marketing group. [Those sales reps] go forward and explain how each works and what advantages each of them has." Vagelos observed that the two anti-ulcer drugs "both ultimately suppress the secretion of hydrochloric acid in the stomach . . . but the way they suppress it is very different -- one is an H[2] antagonist [Pepcid] and the other [Losec] is an enzyme inhibitor." He noted that in clinical studies "the cure rates for Losec are faster and higher at both two and four weeks, so it's a faster curing drug. We also know that because of the complications in toxicology in animals, we'll only have treatment [labeling]. We will not have prophylaxis . . . with Losec, initially." Pepcid marks a new market for Merck in the gastrointestinal area. The company has also taken steps to enter the diabetes market for the first time with its recent agreement with ICI covering the aldose reductase inhibitor Statil ("The Pink Sheet" Oct. 6, T&G-1). Under that agreement, Merck is giving up exclusive U.S. marketing rights for the ACE inhibitor Prinivil (lisinopril) to ICI's Stuart subsidiary, while ICI is giving U.S. marketing rights for Statil to Merck. An NDA for Prinivil was filed with FDA in April, while Statil is in early Phase III studies. Asked to comment on Statil's potential advantages over other aldose reductase inhibitors in development, Vagelos said that the ICI drug has not shown the same skin rash problems encountered by Pfizer's sorbinil. Pfizer restarted Phase III studies at a lower dose in an attempt to avoid skin rashes. However, the "big question in this field," Vagelos declared, "is ultimately proof of efficacy." Noting that Ayerst's Alredase "had difficulties" at an FDA advisory committee ("The Pink Sheet" Sept. 15, p. 3), Vagelos called the aldose reductase inhibitor situation a "race." He added that it "now remains for a really good study to put it all together and hopefully Statil will be able to do that." He said that Merck will soon join ICI "with an even more complete clinical research package that will look at all the possible indications." Commenting on Merck's other development work, Vagelos said that Vasotec studies in congestive heart failure have been redone and submitted to FDA. Noting that the company's original studies were judged by FDA as "not statistically positive enough," he added: "We don't expect approval in the immediate future." However, he also pointed out that Vasotec has been selected by the National Institutes of Health and the Veterans Administration for their long-term congestive heart failure longevity studies. By the end of its first six months on the market for hypertension, Vagelos said that Vasotec "had already gained a 2% share of the huge composite antihypertensive market" in the U.S. Recent Pharmaceutical Data Services' figures show the Merck ACE inhibitor headed toward first year retail sales (at pharmacy acquisition cost) of approximately $35 mil. ("The Pink Sheet" Nov. 3, T&G-1). Based on September sales data, Vasotec sales are annualizing at over $60 mil. In overseas markets, Vagelos reported that Vasotec "is doing particularly well in France, with a share of 14%; the Netherlands, with 11%; and Italy, where two Merck subsidiaries and a licensee have a combined share of 18%." Also launched last January, Primaxin "has also made a highly successful entry into the U.S. market, having won a 3% share of hospital antibiotic sales," Vagelos said. However, he said that sales of the broad spectrum antibiotic are not yet meeting the company's expectations, which "are very high."

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