Judgment day for new Merck painkiller

NEW YORK (CNNMoney.com) -- The moment of truth has come for Arcoxia, Merck's arthritis painkiller intended to replace the withdrawn drug Vioxx.

On Thursday, a panel of Food and Drug Administration experts will vote on whether Arcoxia is safe and effective enough for U.S. consumers. Their non-binding decision - FDA commissioners will take a final vote at a later date - comes amid a divided medical community and mixed test results.

Arcoxia - also known by its scientific name etoricoxib - is already available in more than 60 countries, contributing $265 million in annual sales. But even if Arcoxia gets approved for the U.S. market, it probably won't be a blockbuster, said Les Funtleyder, analyst for Miller Tabak.

Funtleyder believes the drug would add a mere $50 million in annual sales if it wins FDA approval, because more rigorous safety restrictions would make it off-limits to many Americans. That's a drop in the bucket compared with the $2.5 billion in sales Vioxx generated before it was withdrawn.

Arcoxia is a member of the same drug class - Cox-2 inhibitors - as Vioxx, the former blockbuster that Merck (up $0.21 to $45.86, Charts) pulled off the market in 2004 after studies attributed an increased risk of heart attack and stroke to the drug.

The FDA lost credibility from approving Vioxx, which many people see as a massive bungle because the drug has been blamed for heart attacks and death. Merck denies these claims.

On Tuesday, the agency posted documents on its Web site that reveal a grab-bag of test results regarding Arcoxia's safety, based on experiments involving nearly 42,000 patients .These studies compared Merck's drug to the painkiller diclofenac from the NSAID class of painkillers.

Merck spokesman Chris Loder said the test results show that Arcoxia is safe enough to treat osteoarthritis, the common type of arthritis. But Jon LeCroy, analyst for Natexis Bleichroeder, said the results were inconclusive.

"It's a pretty mixed picture," said LeCroy. "The cardiovascular risk, which is the big picture here, is about the same as diclofenac."

The FDA said tests showed that Arcoxia had "comparable" heart risk to diclofenac, a painkiller commonly prescribed in Europe that is a member of the same NSAID drug class as ibuprofen and naproxen.

The FDA also said Arcoxia has less gastrointestinal risk than diclofenac for such relatively minor events as ulcers. But the drugs seem to share the same risk for major events like gastrointestinal bleeding.

LeCroy said Merck could have a tough time proving that Arcoxia is good enough to get approved, because of its inability to differentiate the drug from other treatments that are already on the market.

"The question is: If the cardiovascular risk is the same and the other things are mixed, does this warrant approval?" said LeCroy. "Is this a dead class of drugs? If I had to make the call, they probably don't get the green light. So there's not really an unmet medical need for this."

But Merck insists there is a place for Arcoxia in the U.S. market.

"We believe additional new medicines are needed because of the variable nature of the response to osteoarthritis pain," said Merck spokesman Loder. "Not all patients with arthritis respond to pain treatment the same way, and therefore may often need a series of treatment options before finding one that offers the best balance of efficacy and safety."

Dr. Steven Nissen, chief cardiologist at the renowned medical research facility the Cleveland Clinic, is one of Arcoxia's most vocal detractors. Nissen criticized Merck for comparing Arcoxia in safety studies to diclofenac, which is "under a cloud" as a high-risk drug.

"I think [Arcoxia] really does look very similar in many ways to Vioxx," said Nissen to CNNMoney.com. "Arcoxia has the problem of increasing blood pressure, edema [swelling] and heart failure. I don't think that this [drug] application is sufficient to support approval. And frankly I don't think there's any knowledgeable physician in the field who supports the approval."

But not everyone agrees. Some physicians, such as Dr. Gerard Varlotta, director of sports rehabilitation at New York University medical center's Rusk Institute of Rehabilitation Medicine, believes that Arcoxia - and even Vioxx - should be approved for specific patients.

Varlotta said he prescribed Vioxx "extensively" to many of his patients while it was available.

"I kind of disagreed with them taking [Vioxx] off the market," said Varlotta, who has no financial connection to Merck. "I think they should have stricter warnings on it."

"But a lot of people benefited from it and I couldn't find anything else that benefited them," he said. "I found a woman standing on a chair in my office looking into a Merck box to check and see if there was Vioxx left there."

Merck's stock price plunged 40 percent in the six weeks following the Sept. 30, 2004 withdrawal.

Since that time, more than 20,000 lawsuits have been filed against the company by former patients and family members who blame the drug for heart attacks, some of them fatal. Some of the plaintiffs accuse Merck of deliberately misleading patients and doctors about health risks.

Merck denies these accusations and has vowed to fight the cases one at a time. The company has had the upper hand so far in court, with 10 victories and five losses. Merck's stock has recovered and is currently trading above its pre-Vioxx withdrawal levels.

Merck wasn't the only company affected by Cox-2 problems.

Following the Vioxx withdrawal, Pfizer (up $0.00 to $26.00, Charts) pulled its anti-arthritis drug Bextra off the market, although its other Cox-2 inhibitor, Celebrex, remains on pharmacy shelves and is a key moneymaker for the company, with $2 billion in annual sales. Pfizer recently resumed advertising Celebrex directly to consumers, for the first time since the Vioxx debacle.

Also, Novartis (up $0.19 to $55.49, Charts) is trying to get its Cox-2 inhibitor Prexige, already available in Europe, approved by the FDA.

Funtleyder of Miller Tabak believes that Arcoxia should be approved for a select group of people who are less susceptible to its health risks than the general population. That way, Merck would avoid the problems it had with Vioxx, said Funtleyder.

"When you take a drug that works in a niche population and you try to expand that to everybody through consumer advertising, that's when the drug companies get into trouble," said Funtleyder. "I have a feeling that Vioxx, if it had been marketed to a small number of people, never would have been pulled from the market."

Merck, based in Whitehouse Station, N.J., is the fourth-largest U.S. drug company in terms of sales, behind Pfizer, Johnson & Johnson (up $0.04 to $61.67, Charts) and Abbott Laboratories. (down $0.15 to $57.06, Charts)

The analysts quoted in the story do not own shares of Merck stock and their firms do not conduct business with the company.

Merck: new pain drug safer than Vioxx

Drug stocks