Fun with Pharma
Board: Merck & Co., Inc.

Related Links
Discussion Boards

By TMFMillerTime
April 4, 2007

Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light. How are these posts selected? Click here to find out and nominate a post yourself!

The news flow has been very good for MRK lately. However, the real final leap in the rebound is coming up with Arcoxia. Arcoxia is a cox-2 inhibitor like Vioxx and Celebrex... PFE has launched a fascinating new ad campaign on Celebrex basically stating that "Celebrex never got jerked from the market, you should love it". The main reason it never got jerked is that Celebrex is the weakest of the cox-2 inhibitors and really acts like a very expensive Motrin (no difference in stomach irritation). The big day for MRK is April 12... that's the day that the FDA's arthritis advisory committee will consider Merck's Arcoxia application.

If you want to get a real heads up on the chance for approval, talk to one or two of these guys...

Here's some bad news for MRK. One of the seats on the committee is filled by Dr Gary Hoffman who is chairman of the dept of Rheumatic and Immunologic Diseases at The Cleveland Clinic Foundation. This is likely very important, because Darth Vader (in MRK's view) is Dr Steve Nissen, who is the head of cardiology at the very same Cleveland Clinic.

Nissen has been quoted thusly.... "The studies that have been done do not support the approval" and "I just can't imagine this is going to be recommended. Where is the advantage here? Do we really want to let this genie out of the bottle?"

My answer is yes... prudently used, Vioxx helped a lot of people who really failed to respond to other NSAID's. In a 34,000-person study, Arcoxia had the same risks for the heart and caused 30 percent fewer stomach ulcers than diclofenac (voltaren). The two drugs were similarly effective at reducing pain.

Back to Dr Nissan... he's again quoted as saying "They chose as a competitor the drug Diclofenac, which has a worse risk of adverse cardiovascular events than Vioxx, so proving that Arcoxia is not worse than diclofenac does not reassure anybody" and "I think the reason they chose that comparator was because they thought it was an agent they just couldn't lose to."

Here's what causes me to pause, blink, and get a little bit nauseous... NOBODY!, including the good Dr Nissan, is asking that poor old generic diclofenac be removed from the market. Why is that?? How can it be that the chairman of the division of cardiology at the Cleveland Clinic is screaming "if Arcoxia might make the heart not move... you must not approve!!" but he's completely silent and glosses over a more dangerous drug that's out on the market and being widely prescribed.

There's no money to be made with a tired old generic arthritis pill like diclofenac, no need for excitement.

Dr Nissen is the same guy who, it turns out, failed to disclose he was on the payroll of at least one hedge fund that was heavily short MRK before Vioxx hit.

Somebody needs to explain to me why the Chairman of the Dept of Cardiology of a major medical institution is on the payroll of a hedge fund. As a practicing physician who is trying to figure out who to rely on for unbiased information, it just makes me want to lie down and cry.

The federal government has all sorts of prohibitions on dealing with lowly doctors out in the field... but is just fine with the Chairman of the Dept of Cardiology at the Cleveland Clinic (CC) being paid by hedge funds and not disclosing the relation.

There's no doubt that Nissen has a real personal issue with MRK... I've heard him speak. It's become very important to Dr Nissen that he be "right" in this issue. CV programs are the huge money makers at big private clinics like the CC... CV is the engine that runs the place. The fact that a CC rheumatologist sits on the Arthritis Advisory board is probably very bad for MRK.

As near as I can tell, there's no doubt that Arcoxia is as safe or safer than drugs already out there being prescribed on a daily basis. The political pressure on the FDA is huge, the political pressure being exerted on a CC colleague is likely huge.

I own MRK... I also have sold Jan08 $45 calls on my entire position. If Arcoxia is approved I'll likely not participate in any upside. It ought to be approved but if you made me bet... I almost don't see how they could not approve it... the main reason for the covered calls is not the above referenced stuff, I think MRK's fair value is somewhere in the $50 range and I have some cooking syn longs that are doing very well and I'll be switching the MRK money over to other investments.

Hey! It's "can't miss" FDA TV

Become a Complete Fool
Join the best community on the web! Becoming a full member of the Fool Community is easy, takes just a minute, and is very inexpensive.