Merck & Co. (MRK) Slammed On Speculation After Trial Abruptly Halted

Shares of Merck & Co. Inc. (NYSE: MRK) are under significant pressure today on speculation after a study comparing the company's Zetia with Abott Lab's (NYSE: ABT) Niaspan was halted. The trial was halted on results of a "pre-specified, blinded interim analysis", but not because of safety concerns.

According to analysts at Natixis Bleichroeder and Wells Fargo, the study may have been halted because it showed Niaspan was more effective at unclogging arteries than Zetia.

Natixis Bleichroeder said if the trial favors Niaspan it would be the third blow against Zetia after the ENHANCE and SEAS trial, and they would expect Zetia and Vytorin prescriptions to show further declines. As a result, the firm downgraded Merck to Hold from Buy and lowered their price target to $27 from $30.

Analysts at Deutsche Bank were more sanguine on Merck, saying the trial halt is likely related to one of two things - Niaspan superiority or trial futility. The firm said at this point they favor the latter, and view superiority for Niaspan as a very unlikely possibility. The said any substantial weakness in MRK share is unwarranted.

Shares of Merck are down 4.2% currently to $26.87.

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