UPDATE 2-Arena says Merck drops atherosclerosis deal

* Says Merck drops atherosclerosis drug development

* Treatment failed to meet primary efficacy objective

* Arena shares fall (Adds details of treatment)

NEW YORK, Dec 23 (Reuters) - Arena Pharmaceuticals Inc ARNA.O said on Wednesday that Merck & Co Inc MRK.N will discontinue development of an atherosclerosis drug that the companies were jointly collaborating on.

Atherosclerosis, which occurs when there is a build-up of dangerous plaque in the arteries, can lead to heart attacks.

The news sent Arena’s shares down 6.1 percent to $3.56 in after-hours trading. Merck closed 1.32 percent lower at $37.25 on the New York Stock Exchange.

Merck’s decision to pull out from developing MK-1903 came after a mid-stage clinical trial conducted on patients with dyslipidemia failed to meet the primary objective for efficacy, Arena said in a statement.

Merck indicated that the increase of “HDL” or so-called good cholesterol relative to a placebo did not meet the trial’s pre-specified objective for efficacy, but did not tie its decision to any safety concerns, Arena said.

Reporting by Dhanya Skariachan; Editing by Andre Grenon and Richard Chang