On Friday, CV Therapeutics (NASDAQ:CVTX) reported that a data safety monitoring board (DSMB) has given the final go-ahead to a clinical trial named MERLIN to expand the label for CVT's lead drug, Ranexa.

With its limited-label approval from the FDA last January, Ranexa became the first new drug to treat chronic angina, a painful heart condition, in more than 20 years. However, the FDA approved Ranexa only to help angina sufferers who were not responding well to the first-line treatments (beta blockers, calcium channel blockers, etc.) for the condition. This is a small patient population compared to the more than 6 million total chronic angina sufferers in the U.S.

If Ranexa is going to be an eventual blockbuster drug, it will need to get approved as a front-line treatment for angina. That's where the MERLIN study comes in. CVT has a special protocol assessment (SPA) with the FDA; if Ranexa can show that it causes no more death or arrhythmia compared to placebo in the MERLIN trial, the FDA should give it a coveted expanded label as a first-line treatment for angina.

It's worth noting, though, that an SPA is not a binding agreement by the FDA (as any EncysivePharmaceuticals (NASDAQ:ENCY) investor will tell you). However, barring some unforeseen turn of events, the FDA will usually approve an expanded label for a drug when it meets the terms given in an SPA.

So what's next for Ranexa? Now that the MERLIN trial has completed enrollment and passed review by the DSMB, the next step is for CVT to release top-line results of the study in the first quarter of 2007. This is where we'll know whether the terms of the SPA have been met and an improved label is possible.

Until that time, CVT really needs to get the word out about Ranexa if it wants to ramp up sales before the Merlin results are announced. In its latest investor presentation, the company did say it was working to promote Ranexa to cardiologists, who are becoming increasingly familiar with the drug.

Shares of CVT have been cut by more than half in the past four months because of worries about the slow launch of Ranexa. If the company pulls good MERLIN results out of its hat next year, earning an expanded label for Ranexa, don't expect this CVT stock sale to last.

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Fool contributor Brian Lawler does not own shares of CV Therapeutics. He welcomes your feedback at blawler@utk.edu. The Fool has a disclosure policy.