In a research note this morning, Pru drug-industry analyst Tim Anderson, who has previously expressed disappointment that the drugmaker wasn’t making a bigger splash in the way of acquisitions, drops Schering-Plough to Neutral Weight from Overweight.

“SGP shares have had a nice run,” he writes, “but there may not be enough ‘arrows in the
quiver’ to take the stock much above where it is today. SGP has been, and still is, a margin expansion story, but increasingly this appears to be reflected in EPS estimates and investor expectations.”

He continues that Vytorin, the cholesterol buster, should do well this year, but the ‘competitive landscape in cholesterol is likely to get tougher over time.’ Generic Zocor continues to surge, and we now count two Zetia-like molecules in phase II development that could be paired
up with statin competitors to create Vytorin-like products.

Finally, Anderson notes an upcoming ‘event’ that poses more ‘downside’ than ‘upside.’ This is the so-called ENHANCE trial comparing Vytorin to Zocor, looking at each drug’s impact on a measure of atherosclerosis. Results were originally to be released at the March American College of Cardiology meeting, but Schering-Plough now says the data is still being analyzed. Negative results could create a commercial hurdle for Vytorin, given that generic Zocor is now available for pennies on the dollar. Results are likely sometime in the first half of the year.

[tags]Schering-Plough, Tim Anderson, Vytorin[/tags]