In a blow to the drugmaker, the agency has issued a non-approvable letter for Cordaptive, which Merck hoped would revive its cholesterol franchise, now that Zocor is beset by generic rivals and Vytorin is under siege due to the controversial Enhance study.

Instead, Merck execs are scurrying to understand the FDA decision, which the drugmaker failed to reveal. “We plan to meet with the FDA and to submit additional information to enable the agency to further evaluate the benefit/risk profile,” Peter Kim, Merck’s chief scientist, says in a statement. Abbott must be happy - its Simcor pill was approved two months ago.

The pill contains an extended-release form of niacin, which is a vitamin, and a chemical called laropiprant to stop flushing, a dilation of blood vessels that causes redness and an unpleasant burning sensation on the neck and face. Flushing is a common side effect of niacin-based drugs, and the biggest reason many patients stop taking current products, including Niaspan.

Merck hoped to market Cordaptive as a way to reducing facial flushing while simultaneously lowering LDL, or bad cholesterol, and raising HDL, or good cholesterol. Given the failure of Pfizer’s torcetrapib, some docs expressed skepticism last year over the prospects for Cordaptive. The Pfizer pill caused unexpected deaths, and a recent Cordpative study revealed an increase in liver enzymes and had an impact blood sugar for diabetics.

At the same time, Committee for Medicinal Products for Human Use recommended approval in Europe. And though some investors remained concerned about risks to blood platelets, some Wall Street analysts expected FDA approval; Sanford Bernstein’s Tim Anderson, for instance, forecast $808 million in sales by 2012.