The drugmaker is angling to take a piece Merck’s Singulair franchise. Here’s how:

In an investor note this morning, Prudential Equity’s Tim Anderson writes about an unknown clinical trial that’s testing a fixed-dose combination of Singulair with Schering-Plough’s Claritin. The two drugmakers, he reminds us, signed a respiratory development deal in 2000, when the Zetia pact was inked, centered on combining the two drugs for allergic rhinitis and/or asthma.

Now, back in 2002, a trial showed positive efficacy, but another two years later didn’t, and Merck declared the effort was dead. But Anderson writes that the initiative has been quietly revived, mostly driven by Schering-Plough. And as he explains it, it’s easy to understand why. For Schering-Plough, there’s nothing but upside, But not so for Merck.

Singulair is now Merck’s largest product; last year, worldwide franchise sales were about $4.1 bilion. “And any sales cannibalized by a Singulair/Claritin combination would get split 50/50 between the two drugmakers. Schering-Plough “has almost everything to gain and nearly nothing to lose by making another go of it.”

Moreover, Anderson believes, a new phase III trial on Singulair/Claritin appears to have finished last year, although the results haven’t been published, and another began late last year. A regulatory filing, he writes, could occur within the next 12 months, “assuming clinical data are
positive and sufficient for filing. We do not yet have a feel for this data.”

The upshot: “If the combo were to penetrate 50 percent of the eligible Singulair population by
2010, this could add 12 cents to Schering-Plough’s earnings (in Wall Street parlance, that’s accretive by 5 percent), and simultaneously take 13 cents away from Merck’s earnings (and dilutive by 4 percent).

This may have some Merck execs wheezing.

[tags]Claritin, Merck, Schering-Plough, Singulair[/tags]