US FDA rejects Merck & Co's Arcoxia, calls for additional risk-benefit clinical data

The US Food and Drug Administration has rejected drug major Merck & Co's controversial drug for the symptoms of osteoathritis Arcoxia (etoricoxib). The negative decision was widely anticipated by industry observers but despite this, on the day of the news, April 27, shares in the New Jersey-based firm fell just 1.1% to close at $51.86.

The second-generation selective COX-2 inhibitor belongs to the same class of painkillers as Merck's former blockbuster Vioxx (rofecoxib), which had annual revenues of $2.5 billion before it was withdrawn in September 2004 after cardiovascular events were linked to its use (Marketletters passim). Analysts have always been cautious about the earning potential of Arcoxia, stating that, if approved, physician concerns about the safety risks would limit sales. Miller Tabak analyst Les Funtleyder predicted it would add only about $50.0 million a year to Merck's US revenue.

WBB Securities analyst Steve Brozak echoed the sentiment. He told the Associated Press he thought Merck was only "going through the motions" with the Arcoxia marketing application.