Drug rejections hint at tougher FDA stance

Merck, Genzyme, Isis try to regroup

WASHINGTON -- Regulators ended last week and started this one by rejecting two potential blockbuster cholesterol drugs.

The refusals have left three drug makers reeling and Wall Street wondering whether tougher approval standards are here to stay.

Merck surprised investors late Monday when it said the Food and Drug Administration did not approve its cholesterol pill, Cordaptive. The company was counting on the approval to help replace flagging sales of its older cholesterol drugs, Vytorin and Zocor.

The agency dealt a similar blow Friday to Genzyme and Isis Pharmaceuticals, saying the companies must conduct additional studies of their cholesterol drug, mipomersen, that will delay its introduction for several years.

There was no delaying the effect on Wall Street. Shares of Merck fell 10 percent Tuesday, while Isis fell 4 percent.

Analysts read the FDA's back-to-back refusals as a potential signal of a trend: tougher approval standards for cholesterol medications. The already-crowded market for the pills was the largest in the U.S. last year, with sales of $18.4 billion, according to IMS Health.

WBB Securities analyst Steve Brozak said the FDA has increasingly rejected drugs that don't offer a clear advantage over older medications.

"The party for all these 'me-too' drugs has been over for at least two years," Brozak said. "It's just that these pharmaceutical companies are only now beginning to realize it."

FDA demanded more data from drug maker Wyeth four times before approving its antidepressant Pristiq, a follow-up to an older drug, Effexor. Last year, regulators flatly rejected potential blockbusters to treat obesity and arthritis from Sanofi-Aventis and Merck.

FDA's unexpected rejections come amid a debate over the benefits of newer cholesterol drugs, triggered by a failed study of Merck and Schering Plough's blockbuster Vytorin. The drug, which had 2007 sales of $5 billion, combines Merck's older, cholesterol-lowering drug Zocor with Schering's Zetia.

Results released by the companies in January showed that though the combination lowered cholesterol levels, it was no better at reducing fatty plaque than Zocor, available as a low-cost generic.

Experts called on doctors to return to the older, more established class of cholesterol-lowering drugs known as statins, which includes Zocor and Pfizer's Lipitor.

Lawmakers questioned whether FDA's "lower is better" criterion for approving cholesterol drugs should be re-examined. The FDA has long approved drugs based on their ability to lower so-called bad cholesterol, which is widely thought to reduce heart attack and death.

The Vytorin results suggest that the connection between higher cholesterol and negative results aren't as concrete as initially thought.

FDA staff have said they are not changing the standards for approving cholesterol drugs; analysts say their actions suggest a shift.

Drug makers Genzyme and Isis said Friday that the FDA would not grant their drug broad approval based solely on lower cholesterol levels. Instead the companies said they will have to conduct a large-scale study tracking whether patients live longer or have fewer heart problems while taking their drug.

"The good news is we'll get a good idea of whether these newer cholesterol drugs actually improve outcomes for patients," Cowen and Co. analyst Eric Schmidt said. "The bad news is it will take longer for patients to get access to them."