Investors are finding no solace in Merck's reaffirmation that it'll still hit its earnings numbers this year. Instead they're punishing the stock after the company announced what everyone is calling a surprise and a significant setback.
Yesterday I blogged about regulatory riskand late yesterday the Food and Drug Administration provided Merck with another example of it. The agency rejected the drugmaker's cholesterol treatmentformerly known as Cordaptive and now called Tredaptive (The FDA sometimes makes companies change proposed commercial drug names for any number of reasons.)
In a press release Merck didn't divulge the FDA's problem(s) with the drug, but analysts suspect it has something to do with safety issues. Tredaptive combines Niacin with a new drug to reduce the extremely bothersome facial flushing side effects of Niacin.
Anecdotally, two co-workers at CNBC told me separately in the days leading up to the FDA decision date that they'd both taken Niacin, but had to go off of it because the turned red, tingly and hot. Abbott Labs markets A Niacin drug under the brand name Niaspan. ABT shares are rallying on the elimination of, at least, a near-term threat to the drug which brought in $660 million in revenue last year.