I'm back at Merck HQ in central Jersey for the annual analyst meeting. And I must say that the reception--so far at least--is much more hospitable and helpful than last year wen things were tense and got a little ugly. A new pr team is in place.
Investors in big pharma are always looking down the road. They want to know what drug companies have up their sleeves that could drive future revenue and earnings. And this morning, Merck is showing off what it has in its late-stage drug development pipeline. The Dow component says it has seven drugs in Phase Three clinical trials--that's typically the last step before seeking FDA approval.
And among the group of seven, two of them jump out at me. Next year Merck will move a potentially big drug into Phase Three. It lowers bad cholesterol and raises the good kind, but it's similar to Pfizer's torcetrapib which crashed and burned last year over high blood pressure side effects. So far, Merck says it hasn't had that problem, so it's moving forward. This is the first time the company has said it has made a "go" decision with this drug.
The other headline is Merck's announcement that it plans to file for FDA approval next year for a diet pill. It's similar to the one from Sanofi-Aventis recently and overwhelmingly rejected by an FDA panel over psychiatric side effects. Merck says it has seen so-called "adverse events" which appear to be "mechanism based". That means it has something to do with the way the drugs work. You may recall these drugs work on the receptors in the brain that give pot smokers the munchies.
Nonetheless, Merck thinks its drug is different. Patients on the drug lost weight and saw their waistline shrink. Merck has extended the studies of the pill by a year to better measure the safety, but again, it says it will file for an FDA OK in 2008.
Merck's shares have been putting on pounds. It hit another multi-year high of nearly $62 last week.