UPDATE 2-US FDA backs Merck, Schering-Plough's Vytorin

(Recasts first paragraph; adds analyst and company comment, share prices and byline)

By Susan Heavey

WASHINGTON, Jan 8 (Reuters) - A U.S. regulatory review of the controversial cholesterol drug Vytorin, made by Merck & Co Inc (MRK.N) and Schering-Plough Corp SGP.N, found the drug works and should still be used, but the positive finding may be too late to win back patients.

Sales of the combination drug have plummeted in the last year along with share prices of the two companies after a clinical trial raised questions about whether it worked any better than an older, cheaper statin drug.

The Food and Drug Administration on Thursday said it reviewed the company-sponsored study, known as Enhance, and found Vytorin effectively reduced levels of so-called bad cholesterol more so than Zocor alone. Levels of low-density lipoprotein, or LDL cholesterol, fell 56 percent in Vytorin patients compared to 39 percent in those given Zocor, the agency said.

It also found no significant difference in the thickness of patients' arteries -- a sign of possible heart disease -- in either set of patients in the study, the FDA said.

Vytorin combines Merck's older cholesterol fighter Zocor with the two companies' other cholesterol drug Zetia and is approved by the FDA to lower bad cholesterol and raise good cholesterol.

Research has shown patients who reduce their LDL can reduce their risk of heart attacks and stroke. As a result, the FDA has allowed companies to use studies that a drug effectively lowers LDL, rather than studies that prove a drug actually reduces the risk of heart attacks and stroke.

But in Vytorin's case, LDL levels dropped but patients did not see a greater reduction in artery-clogging plaque compared to Zocor.

Still, the FDA said it continued to believe that lower LDL could reduce the chances for cardiovascular disease.

"Based on current available data, patients should not stop taking Vytorin or other cholesterol lowering medications and should talk to their doctor if they have any questions about Vytorin, Zetia, or the Enhance trial," the FDA said.

Skip Irvine, a spokesman for the Schering-Plough/Merck joint venture that sells Vytorin, said the companies were pleased with the FDA's finding.

But some analysts said the FDA's support was unlikely to turn Vytorin around.

"I don't think this helps them generate sales, but it probably prevents a massive major erosion" of sales, said Jon LeCroy, an analyst with Natixis Bleichroeder. "It's kind of a moot point at this juncture."

FDA said it expected further data from another ongoing trial called Improve-It, which is looking at the risk of death, heart problems and strokes in patients given Vytorin or Zocor.

LeCroy said the drug's real safety and ability to prevent heart attacks will not be known until data from that long-term trial is available, perhaps four years from now.

A small study in July, called Seas, also pointed to a possible increase in cancer in Vytorin patients compared to those given a placebo, but researchers and the company have said that may be due to chance.

Shares of Merck closed off less than one percent at $29.36 after the FDA's announcement, while shares of Schering-Plough ended 2.7 percent higher at $18.19. Both stock of both companies trade on the New York Stock Exchange. (Additional reporting by Ransdell Pierson; editing by Carol Bishopric)