Merck Gets the Combo

Over the weekend, pharmaceutical giant Merck (NYSE: MRK  ) received news that the Food and Drug Administration approved its type 2 diabetes combination pill Janumet for marketing.

Janumet is a tablet that combines doses of Merck's novel DPP-4 oral diabetes drug, Januvia (which was approved in the U.S. last October) and the generic drug metformin. Since their launches last year, the two drugs have been used separately by some patients. But with the approval of Janumet, patients can now take the compounds in a more convenient one-pill dosage format.

This easier-to-use Januvia combination pill will only increase the rate of sales growth for the drug. In its first quarter on the market, sales of Januvia were $42 million. In January, the drug received a positive opinion from the European Union medical authority, which means final approval there should come later in the year.

The biggest competitor to Januvia and Janumet was supposed to be Novartis' (NYSE: NVS  ) Galvus, which is from the same class of drugs. In February, the FDA slapped Galvus with a second approvable letter and asked for Novartis to run another clinical trial with the compound. This gives Merck at least another year of not having to deal with direct competition against its Januvia franchise. If Galvus' stumbles continue through 2008, then the next DPP-4 inhibitor on the market could be Bristol-Myers' (NYSE: BMY  ) saxagliptin, which the company plans to file for marketing approval in the first half of 2008 if late-stage clinical trials are successful.

Merck has had a host of positive developments across all fronts in the past few months. It is slowly turning the corner on overcoming some of the Vioxx litigation, competitors have had their drugs delayed, and Merck has been stringing along several regulatory and clinical trial successes with its drug pipeline as well.

Merck is a former Income Investor recommendation. Check out our entire suite of newsletters by clicking here.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.