Merck Holds Its Breath
Wall Street was panting. On Feb. 23, Merck & Co. stock soared nearly 5%, to 130 5/8, after the Food & Drug Administration gave the company marketing approval for a new asthma drug, Singulair. Cowen & Co. analyst Stephen M. Scala figures it could generate worldwide sales of $1.5 billion by 2001.
Why the hoopla? The incidence of asthma in the U.S. is soaring. According to the National Center for Health Statistics, the number of asthma sufferers rose from 10.4 million in 1990 to 14.6 million in 1994. And Merck's drug is the first of the new leukotriene-blocker drugs to be approved for children 6 and up--a large and growing market.
The most common treatment for asthma is inhaled steroids. But long-term high doses may cause such side effects as glaucoma, osteoporosis--and, for kids, impaired growth. Singulair and similar compounds work by blocking leukotrienes, molecules involved in the inflammation associated with asthma. "This whole class of drugs is a big step forward," says Dr. Jeffrey M. Drazen, a professor at Harvard Medical School.
So far, the only leukotriene blocker on the market, Zeneca Pharmaceuticals' Accolate, has not been a blockbuster. It generated sales of just $77 million in 1997, according to research firm IMS America Ltd. Dr. Beth Seidenberg, Merck's executive director for clinical research, points out that Accolate--unlike Singulair--was not approved for children under age 12. Accolate is also associated with incidences of liver toxicity when taken at four times the approved dose, a problem that hasn't shown up in Singulair. Seidenberg says the Merck drug will be a great option for children whose parents worry about stunted growth. And Singulair may help adults taking high doses of inhaled steroids to cut back.
Still, can Singulair live up to the Street's expectations? Many patients do well on inhaled steroids, so their doctors may see no need to alter treatment. And any possible long-term side effects may not be known for years. "It's promising, but [its] place in long-term asthma treatment is not fully defined," says Dr. David M. Lang, division chief for allergy and immunology at Allegheny University. It has proved capable of putting air in Merck's stock, though.
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