The Food & Drug Administration on Apr. 28 rejected one of Merck's (MRK) biggest hopes for a new blockbuster drug, a cholesterol-lowering medicine call Cordaptive. Analysts who had been predicting that the drug could easily top $1 billion in sales were surprised by the news that the agency sent a "Not Approved" letter to the company. The decision sent Merck shares sinking 10% to 37.33 in afternoon trading Apr. 29 on the New York Stock Exchange.
However, the FDA's ruling should not have been such a surprise. Here's why: The guts of Cordaptive are actually a substance called niacin. Most of us know it as a type of Vitamin B. It is nothing fancy. It's found in many multivitamins, as well as foods like milk, poultry, fish, nuts, and eggs. It helps keep the body running smoothly.