UPDATE 2-Merck HIV drug from Schering merger fails trials

Wed Jan 20, 2010 5:19pm EST

* Merck says will not seek drug approval "at this time"

* HIV drug proves ineffective in two late-stage studies

* Trial involved patients previously treated for HIV

* Studies continue among previously untreated HIV patients (Adds findings from earlier mid-stage study, share price)

By Ransdell Pierson

NEW YORK, Jan 20 (Reuters) - Merck & Co (MRK.N) on Wednesday said its experimental HIV treatment vicriviroc proved ineffective in two late-stage studies involving patients who had previously been treated with other HIV medicines.

Some industry analysts had considered the once-daily drug, which Merck acquired through its recent $41 billion purchase of Schering-Plough Corp, to be potentially the best in a new class of HIV treatments that block receptors to CCR5-- a protein that gives HIV an entry way into human immune system cells.

Wall Street had expected Merck to seek approval this year for the drug. But Merck said it now has no plans to seek marketing approval for the product "at this time."

The trial failures were briefly mentioned in a notice on the company's Web site, headlined "Frequently Asked Questions and Answers."

"In two Phase III studies in this patient population, vicriviroc did not meet the primary efficacy endpoint," the two-paragraph notice said. It said the failed trials enrolled a high percentage of patients who continued to take three or more other active HIV drugs, along with vicriviroc.

A previous mid-stage trial of the drug among treatment-experienced patients suggested it was able to suppress the virus, and was generally well tolerated, during two years of therapy.

Merck said it will continue mid-stage studies of the drug among a different group of patients -- those not previously treated for HIV.

Cowen and Co had expected vicriviroc to achieve annual sales of $75 million in 2012, growing to $150 million in 2015 -- modest sales for the second-biggest U.S. drugmaker.

Pfizer Inc's (PFE.N) already approved Selzentry works by the same mechanism as vicriviroc. But its sales have been crimped by the need for patients to take a diagnostic test that assesses whether they have mutated strains of HIV that inhibit effectiveness of the class of drugs.

Merck, which acquired Schering-Plough in November, bought the company largely for its pipeline of drugs in late stages of testing.

Shares of Merck were down 8 cents to $40.95 in after-hours trading. (Reporting by Ransdell Pierson; editing Carol Bishopric)

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