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Executive Summary

Lipid-lowering drugs currently are treating only 10% of the existing market, Merck Chairman Roy Vagelos, MD, told a Nov. 8 meeting of the New York Society of Securities Analysts. Citing statistics from the National Cholesterol Education Program, Vagelos contended that "the total number of people in the United States with hypercholesterolemia requiring treatment is 21 mil." However, "only 2.4 mil. patients are currently receiving drug therapy," Vagelos said. Because of the overall size of the potential market, the Merck CEO sees plenty of room for the next generation of HMG-CoA reductase inhibitors. Merck's Mevacor (lovastatin) was the first such agent on the market. It currently "holds a 60% share of the [U.S.] cholesterol-lowering market," Vagelos reported. Sales through the first nine months of 1990 are up 44%. Merck and Warner-Lambert (with Lopid) have been driving the expansion of the cholesterol-lowering prescription market. Bristol-Myers Squibb, which has had one of the old-line treatments (Questran), is on the verge of entering the U.S. market with a new HMG-CoA product. Pravachol (pravastatin) was recommended for approval by FDA's Endocrinologic and Metabolic Advisory Committee last month ("The Pink Sheet" Oct. 29, p. 8). In response to an analyst's question about the effect of Pravachol's introduction on Mevacor sales, Vagelos responded that pravastatin "will definitely take some market share, as is inevitable. But we see an enormous market to grow into, 21 mil. patients that are out there." He noted that those market size predictions "come from -- not our marketing people -- but the medical community." Another of the new entrants into the cholesterol-lowering market will be Merck's own Zocor (simvastatin). Zocor was recently launched in Canada and currently is used by more than 500,000 people in 19 countries, Vagelos said. In Canada, the product's value as an inter-company trade candidate is being established through a deal with Glaxo's Canadian subsidiary. Glaxo is to co-promote Zocor with Merck-Frosst for seven years. Merck is to receive co-promotion rights in Canada to a "major Glaxo product currently in development." If that Glaxo product is either in the respiratory or CNS category it could offer a sizeable and important market education for Merck. In the U.S., Zocor remains at FDA pending the submission of new information requested by the agency in November last year ("The Pink Sheet" Nov. 20, 1989, p. 20). Vagelos observed that "FDA asked us to do additional things that we started at that time and haven't been finished." The additional information is "on the way, but it is the same stuff," the Merck exec said. Vagelos also described "ongoing clinical trials involving more than 20,000 patients on Mevacor and Zocor." The company is studying clinical endpoints such as "acute myocardial infarction, the progression -- and possible regression -- of atherosclerotic lesions in the coronary and carotid arteries, and mortality." Merck's meeting with analysts in New York coincided with publication in The New England Journal of Medicine of the results of a study evaluating the effectiveness of a combination of Mevacor and Upjohn's Colestin (colestipol) in reducing levels of atherosclerotic plaque. Vagelos said the study "encourages us," because it found the therapy to be effective. However, he noted, "our studies are with Mevacor alone or with Zocor alone, and that's of course what counts. One could say that maybe colestipol did it and Mevacor was just there for the ride." Merck's Pepcid (famotidine) commands a 14% share of the U.S. antisecretory market with sales up 47%, Vagelos reported. From a relatively slow start, the company is emerging as a major player in the anti-ulcer market. Prilosec (formerly Losec), licensed from Astra and introduced with limited indications in the U.S. last year, is another product that Vegelos predicts "will do very well in the United States" once it receives FDA approval for the short-term treatment of duodenal ulcers. Vagelos cited a four-week comparative study of Prilosec (omeprazole) and ranitidine (Glaxo's Zantac) to indicate that omeprazole will have speed of action over the ulcer market leader. Vagelos maintained that the study showed "82% of Prilosec patients were healed, compared with 63% of patients on ranitidine" after four weeks, despite the smaller dosage of Prilosec (20 mg) compared to Zantac (300 mg). Merck's top seller continues to be the angiotension converting enzyme (ACE) inhibitor Vasotec (enalapril) for the treatment of hypertension and congestive heart failure. "It has been prescribed for more than 3.5 mil. patients in the United States alone," Vagelos said. Merck is "currently conducting studies with Vasotec as first-line therapy for congestive heart failure in hypertensive patients with diabetes or kidney problems." Vasotec and Prinivil (lisinopril) have made Merck "the world leader in the ACE inhibitor market in both market share and sales," Vagelos reported. Merck now has 41% of the worldwide ACE market and 14% of the total antihypertension market. As the first major company to go before a New York financial group after passage of the Medicaid rebate legislation, Merck, appropriately, was put in the position of conveying an image of the legislation to the analysts. Vagelos lauded the legislation from Merck's 1990 refrain of "open access." Presumably referring to the lack of a national P&T committee in the bill and the six-month open window for any new products, Vagelos declared: "The beauty of the program is that there is now a federal program to assure patient access to the best new drugs." He noted in his prepared remarks that Merck is increasing its current rebate offers to bring its discounts up to the 12.5% floor under the bill (see related story, p. 4).

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