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MERCK ZOCOR APPROVAL WILL TAKE LONGER THAN EXPECTED, VAGELOS TELL ANALYSTS; $ 755 MIL. 1989 R&D BUDGET IS ROUGHLY 5% OF WORLD PHARMACEUTICAL R&D TOTAL

Executive Summary

Merck is not optimistic about the near-term chances for FDA approval of Zocor (simvastatin), Merck's HMG-CoA reductase inhibitor follow-up to Mevacor, Chairman Roy Vagelos, MD, told securities analysts in Boston Nov. 13. Merck continues to discuss with FDA its review of the Zocor NDA, filed in October 1987. However, "approval of the product will take longer than we might have hoped, because the FDA has requested additional information," Vagelos said. "Although we continue to press for expeditious approval," he pointed out that "regulatory agencies generally are not inclined to put follow-up compounds on the same fast track as the breakthrough compound." While Zocor waits on the sidelines in the U.S., Merck is pushing ahead with worldwide approval of the cholesterol-lowering agent. Zocor, launched in Sweden in 1988, has been introduced this year in the U.K., France, Italy, Holland, New Zealand and Switzerland. Introduction of the product in Belgium, Greece and Brazil "is expected soon," and the firm plans to apply in Japan for approval "early next year," Vagelos said. Merck's first cholesterol-lowering agent, Mevacor (lovastatin), already holds a 56% market share. "Mevacor has now been prescribed for more than 1.2 mil. patients in the U.S. alone," Vagelos said. Merck hopes any lingering questions about possible side effects from long-term use of lovastatin will be allayed by preliminary results of the Expanded Clinical Evaluation of Lovastatin (EXCEL) study reported at the American Heart Association annual meeting in New Orleans (see related T&G). The 8,000-plus patient study found "no evidence" of cataracts. Running down the status of drugs in the pipeline, Vagelos forecast Proscar (MK 906) Phase III study results will not be ready until "the end of 1990." The treatment for prostate enlargement advanced to Phase III trials in November 1988. By late April, Merck had more than 500 patients enrolled. Vagelos continues to predict: "This could be a most exciting product for males over 50 years of age." He added that the company's belief "that this drug will prove to be a major advance in medicine" is supported by what he called "impressive results" of an earlier, small-scale study, which showed reduction in prostate gland size and increased urinary flow after 12 weeks. Prodiax (ponalrestat), the aldose reductase inhibitor, has a less certain outlook. "Results of studies in neuropathy to date have not shown a positive benefit, although Prodiax proved to be well-tolerated," Vagelos reported. The Merck chief exec noted that studies at higher doses for other complications of diabetes, such as retinopathy and nephropathy, "are not far enough advanced to yield results." Vagelos said that Merck and co-developer ICI, which will call the drug Statil, "remain committed to going forward with clinical studies." U.S. trials were put on a limited clinical hold from late 1987 until October 1988 due to exacerbation of neuropathy in aging rats ("The Pink Sheet" Dec. 12, 1988, T&G-5). Vagelos also commented on the ongoing launch of Losec (omeprazole), which was introduced in the U.S. in October for the treatment of poorly responsive symptomatic gastroesophageal reflux disease (GERD). Vagelos reminded the analysts that while Losec is strictly limited to the narrow GERD indication, Merck has data pending on Losec for short-term use in duodenal ulcers "poorly responsive to treatment with H[2] receptor antagonists." In addition, he noted that Merck will present additional data to FDA "in the future . . . supporting the use of Losec for treatment of duodenal ulcer and gastric ulcer." Merck says it has no target date for submission of the additional ulcer indication data. FDA's Gastrointestinal Drugs Advisory Committee suggested in March that Merck hold off on ulcer indications until long-term data is available on the drug's potential carcinogenicity. Merck is "awaiting" U.S. approval of Plendil (felodipine, formerly dubbed Splendil), Vagelos noted. The company filed an NDA for the vasodilator in early 1988 as a once-daily formulation for hypertension ("The Pink Sheet" March 7, 1988, T&G-7). In addition, Merck is expecting approval "very soon" for PedvaxHIB, a pediatric Haemophilus influenzae conjugate vaccine against bacterial meningitis, Vagelos told the analysts. The PLA was filed in August 1988 for vaccination of children aged 15 months or older. He added that Merck also recently filed a PLA for Varivax, a live attenuated varicella vaccine against chicken pox. Merck's newest publicly discussed research compound is MK-217, a bone resorption inhibitor licensed from the Italian firm Instituto Gentili. An I.V. formulation of MK-217 is under study for reducing the symptoms of high blood calcium and bone disease in metastatic cancer patients, particularly breast cancer patients, Vagelos noted. An oral formulation is being investigated for osteoporosis. Merck's total R&D expenditures will be $ 755 mil. this year, Vagelos said, an increase of 16.2% over the $ 650 mil. the company spent last year. By year-end, Merck will have a 2,700-person sales force in the U.S. and a 4,800 person force abroad, Vagelos said. At the end of July, before the Losec launch, the company employed a domestic sales staff of 2,100. Chart omitted.

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