NEW YORK — Shares of Merck & Co. and Schering-Plough Corp. fell to record lows Monday, as analysts warned new clinical data would choke sales of their blockbuster cholesterol drug Vytorin, while bringing intense government scrutiny to the companies.
Earlier this year, partial results from a clinical study on Vytorin, which is marketed through a joint venture of Merck and Schering-Plough, showed it was no more effective at limiting plaque buildup than Merck's Zocor, a drug that is already available in generic form. Full results of that study were released Sunday.
Federal and New York State officials have been investigating why results of the study were not released for nearly two years after it ended. The companies have also been chided for their aggressive marketing of the drug in the interim.
According to TNS Media Intelligence, which tracks advertising spending, the companies spent about $472.8 million on advertising since the drug hit the market.
The Senate Finance Committee said in a report Monday that the researcher who led a crucial study of the drug angrily accused Vytorin makers Merck & Co. and partner Schering-Plough Corp. of withholding negative results to boost sales.
"This is the last thing that Schering and Merck need, especially in a political year," said analyst Steve Brozak of WBB Securities Ltd. "This can become brutal."
Vytorin is a combination of Zocor and Schering-Plough's drug Zetia.
Both stocks hit 12-year lows Monday. Schering-Plough shares plunged as low as $14, touching their lowest levels since August 1996, before ending the day at $14.41, down 26 percent. Merck shares fell as low as $36.82, their lowest since June 2006, finishing $37.95, down 15 percent.
Leading physicians are now recommending the use of older drugs called statins, such as like Pfizer Inc.'s Lipitor and AstraZeneca PLC's Crestor, before putting patients on Vytorin. Many physicians had prescribed Vytorin in lieu of higher doses of statins because of what some said was an undue fear of side effects.
"There was an irrationality to begin with," said Dr. John LaRosa, president of State University of New York Downstate Medical Center.
Trouble with Vytorin could lead to a tightening of regulatory standards at the FDA when it comes to approving cholesterol drugs, LaRosa said.
Lehman Brothers analyst Charles Butler downgraded Schering-Plough shares on the news, and cut his price target on the stock by more than 40 percent.
He said prescriptions of Vytorin will keep falling, and because Schering-Plough relies heavily on the joint venture, he slashed his profit estimates over the next five years.
Besides the Vytorin news, Merck also halted enrollment in a study for the cholesterol drug Cordaptive, which uses the same ultrasound measurement from the now-failed Vytorin study.
In a separate statement, the company said high doses of the experimental obesity treatment Taranabant are being cut out of a late-stage study because of higher rates of gastrointestinal side effects, depression and anxiety. The high doses were no more effective than low doses, the company said.
AP Business Writer Marley Seaman in New York contributed to this report.