Merck (MRK) received a setback recently with respect to one of its pipeline candidates, vicriviroc. The drug did not meet the primary efficacy endpoint in two late stage studies (phase III) with HIV patients who have already been treated with other medication. Following this, Merck has shelved its plan to seek marketing approval for the drug.

Earlier, results from a mid-stage trial of vicriviroc in treatment-experienced patients found that the drug was being well tolerated and was effective during the two years of therapy. Merck will continue phase II studies of the drug in treatment-naïve HIV patients, for which patient enrollment is complete. We had high hopes of vicriviroc, which became a part of Merck’s portfolio following its merger with Schering-Plough.

Merck’s other HIV drug Isentress (raltegravir) is approved in combination with other antiretroviral agents for the treatment of HIV infection in treatment-experienced as well as previously untreated patients. The drug recorded worldwide sales of $179 million for the third quarter of 2009, an increase of 84% compared with year-ago period. The HIV market is highly competitive with products such as Selzentry of Pfizer (PFE), Intelence and Viread of Johnson & Johnson (JNJ), and Atripla and Truvada from Gilead Sciences (GILD).

To strengthen its HIV franchise, Gilead had entered into a deal with Johnson & Johnson’s Tibotec Pharmaceuticals for the development and commercialization of a new once-daily fixed-dose antiretroviral regimen for HIV treatment.

As per estimates, more than 1 million people in the US are living with HIV and AIDS. AIDS is one of the major causes of infectious disease-related mortality worldwide, responsible for approximately 2 million deaths in 2007 alone. We believe there is a huge unmet medical need for HIV patients, thereby providing ample room for improvement. We have a Neutral recommendation for Merck.

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