Monday, March 31, 2008

Vytorin and Zetia Deemed No Better That Generic

I guess all of those ads on TV amounted to nothing in terms of stopping heart disease.

The cardiologists made the recommendation at a conference Sunday in Chicago, where researchers presented full results of the so-called "Enhance" study. The patient trial showed the drugs were no better than an older, cheaper drug at slowing artery thickening, despite
producing a greater drop in bad cholesterol levels.

I guess combining Zetia and Zocor which seemed like a way to end-around Zocor being made into a generic doesn't do anything in particular. It should be especially bad for Schering-Plough since a majority of their revenue came from sales of these drugs.

One thing I noticed was that if this $5 billion cut in sales number is to be believed SGP may be heading for bad times unless they tighten their belts considerably. You would figure that they would lose about $2 billion in sales and they could burn through their $2.2 billion in cash on their books in no time. The bad part is that they already have $9.48 billion in debt on their books so any slip-up could be disastrous for SGP.

I guess it is all up to how fast people dump these drugs for either the generic or their competitors. My guess is that it will be fairly fast since people are already facing high healthcare costs and the generic is pretty much does the same thing as Vytorin/Zetia but for much cheaper. SGP better have a great pipeline.

It should also be good for Pfizer's Lipitor and AstraZenica's Crestor. Those stocks may get the lions share of that $5 billion shortfall. Also it makes me wonder if they will be making a combo Lipitor/Crestor in the near future to dodge when they will become generic?

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