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A Drug to Fertilize Schering-Plough's Growth?

Down 20% so far this year, Schering-Plough (NYSE: SGP  ) needs something to replace all those cholesterol-fighting Vytorin and Zetia prescriptions (and revenue) that it and Merck (NYSE: MRK  ) are expected to lose. Yesterday, the company announced results of a trial for a drug that could help Schering take a few steps on the road to recovery.

In a phase 3 trial, the drugmaker's corifollitropin alfa was at least as good at helping women undergoing fertility treatments to get pregnant as its currently available treatment, Follistim. The new drug also seemed to cause more eggs to be released than the already-approved drug, although the clinical trial was only designed to test that the new drug wasn't worse than the old one. Its proven "non-inferiority" may not sound like much of an advantage, but the drug requires only one shot in the first seven days of treatment as opposed to daily doses of Follistim.

Corifollitropin alfa is part of the well-stocked pipeline that Schering got when it purchased Dutch Akzo Nobel's (Other OTC: AKZOY.PK) Organon BioSciences subsidiary. The purchase should begin to pay off in the not-too-distant future since both anesthesia reversal agent Bridion and antipsychotic asenapine are under FDA review.

Along with the pipeline, Schering acquired approved drugs, including Follistim, which managed $145 million in sales last quarter. That's not exactly blockbuster status, but if the idea of fewer injections pushes more women into fertility treatments, combined sales of Follistim and corifollitropin alfa could help move the drug category closer to that $1 billion, blockbuster status.

Just as Pfizer (NYSE: PFE  ) isn't going to replace $12.7 billion worth of Lipitor sales with a single drug when that goes off patent, Schering should plan on spreading any lost sales and growth from its cholesterol franchise among several replacements. If it manages that, investors will be proud parents.

So far, at least, its newest fertility treatment drug looks like a nice addition to the family.

Will Schering-Plough be able to come back? That's the kind of question answered at our Inside Value newsletter. To see which companies have been judged able to do so, take a free 30-day trial. 

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Pfizer is both an Income Investor and an Inside Value recommendation.The Fool's disclosure policy doesn't like needles, paper shredders, or other objects with sharp points.

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11/3/2009 4:02 PM
SGP.DL2 $28.15 Down +0.00 +0.00%
Schering-Plough Co… CAPS Rating: ****
MRK $61.29 Up +0.42 +0.69%
Merck and Co. CAPS Rating: ****
PFE $32.48 Up +0.08 +0.25%
Pfizer CAPS Rating: ****