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Merck (MRK - Analyst Report) recently announced its decision to halt a phase III study with its HIV drug Isentress based on the recommendation of an independent Data Monitoring Committee. The phase III study was being conducted to investigate the safety and efficacy of a once-daily dosage of Isentress in treatment-naïve adult HIV patients.

Isentress is currently approved in a twice-daily dosage regimen for the treatment of HIV in treatment-naïve and treatment-experienced adults in combination with other antiretroviral therapies.

The phase III study compared the once-daily (800 mg once daily) dosing regimen of Isentress with the currently approved twice-daily (400 mg twice daily) dosing regimen. While the once-daily dosage helped achieve viral suppression in more than 80% of the patients, it failed to show non-inferiority to the twice-daily treatment regimen.

Results showed that after 48 weeks, 83.2% of the patients in the once-daily arm achieved undetectable viral levels compared to 88.9% in the twice-daily arm. Full results from this study will be presented at a scientific meeting next year.

The results are disappointing as a once-daily treatment regimen would have been more convenient for HIV patients and would have helped reduce the chance of patients missing dosages.

Merck’s Isentress is the first integrase inhibitor to have gained approval. Isentress is currently approved in more than 90 countries across the world and the product is on track to become a blockbuster with sales during the first nine months of 2010 coming in at $777 million.

However, competition is fast catching up with companies like Gilead (GILD - Analyst Report), Pfizer/GlaxoSmithKline (PFE - Analyst Report)/(GSK - Analyst Report) working on bringing their integrase inhibitors to market.

Neutral on Merck

We currently have a Neutral recommendation on Merck, which is supported by a Zacks #3 Rank (short-term “Hold” rating). Merck is currently facing issues like patent expirations of key drugs and EU pricing pressure. However, the company has a deep pipeline that should act as a cushion when its key products lose patent protection in the next few years.

Moreover, some of Merck's recent launches should start contributing significantly to the top line in the forthcoming quarters. The restructuring initiatives undertaken by the company should also improve its bottom line.

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