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Merck (MRK - Analyst Report) recently announced that it is taking its cholesterol management drug, Tredaptive (extended-release niacin/laropiprant), off the market. While Tredaptive (also known as Pelzont and Trevaclyn) is not approved in the US, it is available in 40 countries across the world and approved in 70 countries.

Merck’s decision was based on preliminary data from the long term safety study, HPS2-THRIVE (Heart Protection Study 2-Treatment of HDL to Reduce the Incidence of Vascular Events), and discussions with regulatory authorities.

Merck had announced disappointing results from the HPS2-THRIVE study in Dec 2012. Tredaptive failed to meet its primary endpoint in the study that compared Tredaptive plus statin therapy to statin therapy.

Results showed that adding Tredaptive to statin therapy did not lead to a significant reduction in the risk of major vascular events (a combination of coronary deaths, non-fatal heart attacks, strokes or revascularizations) compared to statin therapy. Moreover, the incidence of some types of non-fatal serious adverse events in the Tredaptive arm increased significantly.

Merck’s decision to take Tredaptive off the market is in line with the recommendation of the European Medicine Agency’s Pharmacovigilance Risk Assessment Committee (PRAC). The PRAC, which assessed available data related to safety concerns over Tredaptive, recommended that the marketing, supply and authorizations of Tredaptive, Pelzont and Trevaclyn should be suspended across the EU.

Our Take

The decision to suspend Tredaptive does not come as a surprise given the disappointing long-term safety data from the HPS-2 THRIVE study. Tredaptive sales were not significant (first nine month 2012 sales of the drug were $13 million) and its removal should not affect Merck’s top-line.

However, Tredaptive was one of the candidates in Merck’s pipeline slated for a US regulatory filing in 2013. Therefore, the suspension of the drug is a setback for the company’s pipeline efforts.

We currently have a Neutral recommendation on Merck, which carries a Zacks Rank #3 (Hold). Large-cap pharma companies that currently look better-positioned include Eli Lilly (LLY - Analyst Report), Johnson & Johnson (JNJ) and Novartis (NVS - Analyst Report). All three are Zacks Rank #2 (Buy) stocks.

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