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Building on a rival's drug

Merck and partner plan to create a new product when Pfizer's Lipitor patent expires.

Combining Merck and Schering- Plough's Zetia with Pfizer's Lipitor would enable the two drug giants to leap ahead in the cholesterol-drug marketing war.
Combining Merck and Schering- Plough's Zetia with Pfizer's Lipitor would enable the two drug giants to leap ahead in the cholesterol-drug marketing war.Read more

Battling over the $32 billion cholesterol-drug market, Merck & Co. Inc. said yesterday that it planned to develop a new treatment made partly from a rival drug, Lipitor, currently produced by Pfizer Inc.

Merck and its joint-venture partner, Schering-Plough Corp., said the companies aimed to market the new combination drug only after Lipitor's patent expired around the world starting about 2010.

Lipitor is currently the world's No. 1-selling prescription medicine, generating sales of $12.9 billion last year for Pfizer. Merck and Pfizer competed fiercely over the statin market until last year, when Merck's biggest-selling drug, the cholesterol drug Zocor, went off patent and lost most of its revenue to generic versions.

Shares in Merck, whose headquarters are in Whitehouse Station, N.J., with large operations in West Point, Montgomery County, closed at $44.07, down 38 cents, or less than 1 percent.

Shares of Schering-Plough, based in Kenilworth, N.J., rose 52 cents, or about 2 percent, to $25.14.

Pfizer, based in New York City, closed up a penny at $25.67.

The partnership between Merck and Schering-Plough would enable the drug giants to try to use their rival's own coveted drug to leap ahead with a related, patent-protected product, albeit not a new drug.

They plan to combine Lipitor, known generically as atorvastatin, with Zetia, known as ezetimibe and produced by a joint venture between Merck and Schering-Plough. The joint-venture also markets Vytorin, a combination of Zetia and Merck's statin Zocor.

Merck did not disclose a name or time line for its Vytorinlike combination of Zetia and Lipitor, other than saying development would be timed to Lipitor's patent expiration.

Sales of cholesterol-treatment drugs reached $32 billion last year, according to IMS Health, a Plymouth Meeting firm that monitors the industry. The United States accounted for about $22 billion of that total. Zetia and Vytorin generated sales of $3.9 billion for the joint venture.

Zocor brought in $2.8 billion last year ahead of its patent expiration, and its generic version quickly became the top-grossing generic medicine in the United States at $1.5 billion, according to IMS figures compiled by a generic-drug trade association.

"This agreement exemplifies Merck's Plan to Win by expanding our lead in cutting-edge science through investments in our own internal research as well as through external collaborations and is a logical next step for our very strong and successful partnership with Schering-Plough," Merck's chief executive officer, Richard T. Clark, said in a statement.

Pfizer's medical team leader for Lipitor, Halit Bander, declined to comment on marketing or legal issues surrounding its rivals' use of Lipitor.

"Today, we have Lipitor on the market, and it works. It's the outcome that's important to patients," Bander said.

Typically, generic-drug companies race to develop cut-rate versions of top-selling drugs like Lipitor after they go off patent. Brand-name manufacturers also constantly look for new formulations to expand their own products' patent life, or try to invent slightly better versions of a particular treatment.

But it appears to be rare for brand-name manufacturers to explicitly incorporate another company's patent-expired drug into their own new product.

Merck and Pfizer had spent vast sums conducting clinical trials and mounting marketing campaigns trying to prove one drug was superior to the other.

Asked about the irony of Merck's now embracing Lipitor, Pfizer demurred.

"I cannot comment on the combination," Bander said. "We had looked at different things with Lipitor. We continue to do research."

Pfizer did not say whether it had considered such a move itself with Schering-Plough, or whether it was planning to join with a generic-drug maker to market its own cut-rate version of Lipitor after 2010.