ANALYSTS' VIEW: Schering, Merck hit after cholesterol study

CHICAGO (Reuters) - Shares of Schering-Plough Corp (SGP.N: Quote, Profile, Research, Stock Buzz) and Merck & Co (MRK.N: Quote, Profile, Research, Stock Buzz) plunged on Monday after doctors at a prominent medical meeting recommended patients try older cholesterol drugs before the companies' newer medicines.

Schering-Plough shares dropped 27 percent, while Merck shares fell 16 percent, as analysts cut their sales forecasts for the companies' shared drugs, Vytorin and Zetia.

The value of Vytorin and Zetia, which generate about $5 billion in combined annual sales, has been questioned since the results of a controversial study were released in January.

Additional data from the study were released Sunday at the American College of Cardiology meeting in Chicago.

JAMES KELLY, ANALYST, GOLDMAN SACHS & CO

"The Enhance data were presented this weekend and were not surprising. The big surprise was the professional commentary, which spoke to limiting the use of the drug (until after other cholesterol-lowering medicines have failed) unless it is proved in an outcomes trial (expected to be completed in 2012). Given the uncertainty around the franchise, we are downgrading Schering-Plough stock to 'neutral.'"

JAMI RUBIN, ANALYST, MORGAN STANLEY & CO

"The Enhance session at the ACC was a setback for Merck and Schering-Plough despite the full release of the data set, which brought out no new surprises. The surprise, and the source of the negative media publicity, was the panel discussion, or rather the lack thereof. While we had anticipated the session to be an opportunity for a scientific debate on the trial design, results and clinical implications, the discussion was dominated by just one of the four panel members."

SEAMUS FERNANDEZ, ANALYST, LEERINK SWANN