Post Schering-Plough purchase, drugmaker Merck has 43 compounds in late tests, 4 under review

‘New’ Merck has 43 drugs in mid-, late-stage tests

TRENTON, N.J. — Drugmaker Merck & Co. said Monday that it now has 43 experimental drugs in mid-or late-stage testing — nearly double what it had before buying joint venture partner Schering-Plough Corp. last fall.

The megadeal was partly meant to boost Merck’s prospects with a host of future drugs and to counter intensifying generic competition eroding sales of some big sellers.

The combined company, which has been reviewing and integrating the research programs of Merck and Schering-Plough for about 100 days, also has four drugs awaiting approval by regulators. Those include Schering-Plough medicines for asthma, schizophrenia and contraception, and a Merck drug for a dangerous irregular heartbeat.

The 19 drugs in late-stage development include four treatments for heart disease, an injection for dangerous Staph infections and two pills — instead of the shots now used — to gradually eliminate symptoms of grass and ragweed allergies. Another 24 drugs are in midstage human testing.

Overall, about 55 percent of the compounds came from Merck labs and the rest — 19 products — came from Schering-Plough.

“It is a combination of the best of both companies (and) sets the stage for us really to move forward with what I see as the best new pipeline in the industry,” said Peter S. Kim, president of Merck Research Laboratories.

Analysts and other experts considered Schering-Plough’s late-stage drug pipeline one of the best in the business, making the deal a smart one for Merck. While Merck produced a burst of new products a few years ago, it needed new medicines to replace revenue being lost to increasing generic competition.

Merck, Whitehouse Station, N.J., plans to lay off about 15,000 of the combined company’s 100,000 employees. Many will be in research and development, but Merck still isn’t saying how many or which laboratories might be closed.

Kim said top prospects among the drugs acquired from Schering-Plough include two that would each be the first in a new class, an anticlotting drug referred to as TRA and a hepatitis C drug called boceprevir.

He said that the day after the deal closed, scientists from each company finally got to see detailed information on each other’s experimental drugs.

“We were like kids in a candy store, with a whole lot of things to look at,” Kim recalled.

The two companies’ pipelines overlapped only in hepatitis C and cancer. In those two cases, each company had a lead compound out of multiple candidates. The combined company decided to put the Schering-Plough compounds on the back burner and move forward on testing of the Merck compounds.

The rest of the pipeline includes pills, vaccines and injected biologic drugs for diabetes, insomnia, schizophrenia, multiple cancer types, hardening of the arteries, glaucoma, infectious diseases, osteoporosis and anemia.

Since the deal was announced a year ago, three Schering-Plough drugs already won approval: Saphris for schizophrenia and bipolar disorder, fertility treatment Elonva and Simponi for rheumatoid arthritis and other immune disorders.

Merck bought Schering-Plough, which was based nearby in Kenilworth, N.J., on Nov. 3 for $41.1 billion in last year’s second-biggest pharmaceutical acquisition. The pharmaceutical industry is consolidating to cut costs due to intensifying generic competition, slumping revenue and a dearth of major new products — exacerbated by slightly lower sales amid the global recession.

The deal made Merck the world’s second-biggest pharmaceutical company by global revenue after Pfizer Inc. Previously, Merck was the eighth-largest company in the sector.

More importantly, the transaction diversified Merck overnight by adding Schering’s biologic drugs, popular consumer health lines such as Claritin allergy pills and Coppertone sun care, and a top animal health business.

The two companies had been longtime collaborators on a joint venture selling the popular cholesterol drugs Zetia and Vytorin, whose sales have fallen amid questions about their efficacy.

Merck shares rose 39 cents to $37.27 in Monday trading.

(This version CORRECTS the number of drugs in mid or late stage testing to 43 in the headlines.)