Reporting Live from the ACC Scientific Session


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Reporting Live from the ACC Scientific Session
by Stephen Cervieri, Managing Director
 

 

This can’t be Good, for Merck and Schering Plough That Is

 
It looks like 10,000 cardiologists are attending the Scientific Session.  About half with phone-cameras recording each slide.  And the panelists and their slides are telling  the 10,000 members in the audience with 5,000 phone-cameras that they should be looking to statins first, and then other drugs.
 
And then, only when patients have not responded and have failed to reach cholesterol targets, should patients receive Vytorin or Zetia.
 
Wall Street, let alone the drug companies, had expected that the data presentation would generate more positive reviews to counter the steady flow of negative publicity that has dogged Vytorin and Zetia since preliminary study results were released in January. Prescriptions plunged before leveling off over the past month, sending Schering-Plough's stock price down 46% since the beginning of the year and Merck's down 35%.
Instead, the opposite happened.
 
The panel made its recommendations on the basis of a 720-patient imaging study known as Enhance.  Vytorin failed to show a benefit over a cheaper generic drug in halting the progression of disease in neck arteries, a measure of heart-attack and stroke risk.
 
The cardiologists' stance also reflected worries that the use of Vytorin and Zetia, which have been proven effective in lowering cholesterol associated with heart disease but not in preventing the disease or heart attacks themselves, has far exceeded data showing their benefits.
 
To Merck and Schering-Plough, that seemed thin evidence on which to dismiss out of hand a drug that offered tangible benefits and presented no safety concerns.
 
"It would be very inappropriate to conclude from this one study that doctors should change their practice or that patients should come off medicines that are helping them," said Robert Spiegel, chief medical officer at Schering-Plough.
 
He said the companies had expected a balanced scientific discussion from the panel, and instead "we had a verdict delivered by one individual who dominated" the discussion.
 
Added Mr. Hassan: "We were surprised that the scientific forum that we were waiting for didn't occur." Mr. Hassan said that "the panel was selected based on some credentials that we don't understand, and secondly, the way the panel proceeded was something that we would not call a scientific forum. ... It was basically a statement and basically there was no participation by the audience."
 
Exhibition Hall - Disneyworld for the Docs
 
My colleague and I tried to figure out whether the pavilions – Abbott, Siemens, Medtronic, Pfizer  et al – now top out at 4 stories or are still at 3.  I predict that the next differentiator from a floor marketing perspective, is audio.  Colors and size have been pushed to the max.  The aural senses are underserved by comparison.
 
Spotlight on the booths we saw and like (of the 1,000 that exhibited and dozen we met with):
 

Accumetrics – diagnostic for patient response to anti-platelet and Plavix-class drugs
Atherotech – cholesterol and bio marker diagnostic with add-on ecommerce application
CardioDynamics – welcome back, after tough couple years, house is in order
Position – ditto for PET technology
 
The Other Shoe Drops - The Day After
 
Investors sent Schering-Plough's stock down as much as 26% to $14.41 a share, and Merck's down 15% to $37.95. The stock losses reduced Schering-Plough's market capitalization by $8.2 billion and Merck's by $14.3 billion.
 
Damage to the stocks is likely to linger, especially for smaller Schering-Plough, whose revival is generally attributed to the two drugs. Analysts figure the cholesterol joint venture accounts for about half of Schering-Plough's profit, and some put the figure closer to 60%. Meanwhile, analysts estimate the joint venture accounts for about 15% of Merck's profit.
 
Schering-Plough Chief Executive Fred Hassan put on a brave face.  The company doesn't have immediate plans for big changes to the company's business plan in response to fallout from the drug trial. But he added, "We will take tough actions if tough actions are needed.... If revenues are going to be permanently impaired, then we would need to size the company to line up with that size."
 
Deepak Khanna, general manager of the Merck Schering-Plough joint venture that markets the drugs, said the companies' sales force has prepared a letter for doctors that provides the companies' view of the study presented at the conference and will provide copies of the study, called Enhance, to doctors. "Our sales force and medical-affairs group have been well prepared about what this study is and how to talk about it," Mr. Khanna said.
 
The companies hope to appeal to the significant number of doctors who aren't swayed by the study's findings and remain convinced their patients will benefit from Vytorin. Still, many physicians will be more comfortable operating in line with the consensus of their peers.
 
The companies also plan to aggressively take their case to managed-care plans and pharmacy-benefit managers who make decisions affecting the use of prescription drugs.