NEW YORK (CNN/Money) - A shingles vaccine developed by Merck & Co., Inc. reduced pain in the majority of test patients, according to the company, which released the results of late-stage clinical trials.

Zostavax reduced pain and discomfort in 61 percent of shingles patients, according to the Merck (down $0.09 to $32.10, Research) study, conducted on more than 38,500 men and women aged 60 and older. Zostavax also reduced by 67 percent the incidence of persistent nerve pain, the most common complication caused by shingles, and reduced the incidence of shingles by 51 percent, according to Merck.

The findings of the Phase III study were published in the June 2 issue of The New England Journal of Medicine, Merck said.

Shingles is caused by latent varicella zoster virus, the same virus that causes chickenpox, and can result in a blistering rash that lasts for years, Merck said.

In a report released Thursday by Leerink Swann & Co., analyst Andrew Oh wrote that Zostavax would probably be approved by the Food and Drug Administration in 2006 and sales would reach $175 million by 2008.

Oh, who rates Merck a "hold," wrote that the potential target group for Zostavax numbers in the millions, but it is difficult to project how many people would use the vaccine.

"Theoretically, Zostavax could be given to every adult over the age of 60 (perhaps as young as 50) who has had chickenpox in the past, which represents millions of patients (90+ percent of adults,)" wrote Oh. "In addition, each year approximately 800,000 patients in the U.S. suffer from shingles. However, since this disease is not life threatening, it is unclear in our view what the vaccine's market potential is, who would pay for it and what its price would be."

Also, GlaxoSmithKline is developing a potential competitor to Zostavax, though it is years behind, according to Oh.

Based in Whitehouse Station, N.J., Merck is one of the world's largest drug makers with $22.9 billion in 2004 sales.

Oh does not own Merck stock and Leerink Swann has no relationship with the company.

For more stories about fortune 500 companies, click here.