UPDATE 3-US FDA: unlikely Merck's Vytorin ups cancer risk

* FDA says cancer link cannot be ruled out

* No cancer risk seen in early results of 2 large studies

* Merck shares up 10 cents (Adds details on previous findings, drug action; updates shares)

By Lisa Richwine

WASHINGTON, Dec 22 (Reuters) - Merck & Co's (MRK.N) blockbuster cholesterol drug Vytorin is unlikely to raise the risk of cancer but a link cannot be ruled out, U.S. health officials said on Tuesday.

The Food and Drug Administration reviewed data on Vytorin and Merck's related drug, Zetia, from a trial called SEAS, plus early findings from two large ongoing studies.

"Based on the currently available information, FDA believes it is unlikely that Vytorin or Zetia increase the risk of cancer or cancer-related death, but at this time an association cannot be definitively ruled out," the agency said.

Vytorin and Zetia were tarnished in January 2008 when a study called ENHANCE raised questions about the drugs' effectiveness. Sales of the medicines plunged after the ENHANCE data, although they remain a $4 billion-a-year franchise.

Concern about cancer arose in July 2008 when the SEAS trial found more cancer cases among Vytorin patients versus a placebo.

Leerink Swann analyst Seamus Fernandez said the FDA statement on Tuesday was positive though expected.

The cancer issue "was an overhang for the stock, so getting it out of the way as a potential concern is a positive. It's good from the perspective of eliminating an investor overhang," he said.

Fernandez said "you're never going to really truly be able to state definitively that there isn't a cancer risk. In fact, FDA wasn't truly definitively able to say there wasn't a cancer risk with the use of statins (cholesterol drugs) for about ten years."

Vytorin combines Merck's statin Zocor, or simvastatin, with the newer Zetia. Statins lower cholesterol by cutting the amount of cholesterol made by the liver while Zetia blocks cholesterol absorption in the gut. Zetia's generic name is ezetimibe.

The FDA said it was not advising doctors or patients to stop using the medicines "but to continue to evaluate the clinical benefits and potential risks" compared to other approved medications.

The agency said an interim analysis of cancer data from the two larger studies, SHARP and IMPROVE-IT, "did not show an increased risk of cancer with Vytorin."

Those studies, which include more than 20,000 patients, will provide more data to assess cancer risk when they are completed, the FDA said. SHARP is expected to conclude in 2010 and IMPROVE-IT in 2012.

SEAS was a smaller study with nearly 1,900 patients.

Merck spokesman Ron Rogers said the company was "pleased by the conclusions reached by the FDA review" of the trial.

In November, another small study showed Abbott Laboratories Inc's (ABT.N) drug Niaspan, which raises HDL or "good" cholesterol, appeared more effective and safer than Zetia for reducing build-up of plaque in neck arteries. Merck called that study "scientifically inadequate."

Shares of Merck were up 10 cents to $37.79 in afternoon trading on the New York Stock Exchange.

The FDA released the statement on Vytorin here. (Reporting by Lisa Richwine and Bill Berkrot; Editing by Lisa Von Ahn and Tim Dobbyn)