UPDATE 4-Merck to seek 5 new drug approvals this year

* Says to seek U.S. approvals of five new drugs in 2010

* Says halts work on long-acting “biosimilar” anemia drug

* Sees large revs contribution from emerging mkts by 2013

* Shares slide 0.8 pct
(Adds details on heart drug, analyst comment, updates shares)

By Lewis Krauskopf and Ransdell Pierson

WHITEHOUSE STATION, N.J./NEW YORK, May 11 (BestGrowthStock) – Merck
& Co (MRK.N: ) plans to seek approval for five new medicines this
year, including a closely watched hepatitis C treatment, but
has halted development of an experimental anemia medicine, the
company said on Tuesday.

At a business briefing for Wall Street, the world’s second-
biggest drugmaker also projected that more than 25 percent of
its pharmaceutical and vaccine sales would come from emerging
markets by 2013 — up from the current 17 percent — as the
industry makes a big push into developing countries.

But its shares fell nearly 1 percent as analysts said no
major positive new developments had emerged from the highly
anticipated event — the first such meeting for analysts and
money managers since Merck completed its acquisition of
Schering-Plough in November.

There is nothing “genuinely new or surprising out of the
meeting,” Leerink Swann analyst Seamus Fernandez said.

The company, which has four other new drugs already under
review by U.S. regulators, reaffirmed it intends to increase
its focus on biotechnology drugs.

It is working to develop its own versions of currently
marketed biotech drugs, known as “biosimilars,” and still
expects to have five in late-stage tests by 2012.

But it has halted development of a long-acting form of
erythropoietin — an anemia drug similar to blockbuster brands
sold by Johnson & Johnson (JNJ.N: ). Merck said it dropped the
medicine after weighing which of its experimental drugs was
most worthy of being developed.

Merck also said it expects business from emerging markets
to drive future growth as diseases typically associated with
developed markets, such as diabetes and heart disease, become
more and more prevalent in developing nations.

It already has a 3,000-strong sales force in China, Merck
told investors — an increase of 90 percent since 2007.

Merck paid $41 billion for Schering-Plough in November
after a number of Merck’s own medicines failed clinical trials
or suffered damaging setbacks during the past few years,
including drugs for asthma, heart failure, obesity, migraine
headaches and to raise “good” HDL cholesterol.

The company said it had completed commercial integration in
the majority of top markets in just six months.

“Layering on Schering-Plough’s pipeline, it just adds
considerable breadth and depth,” said Robert Hazlett, an
analyst for BMO Capital Markets. “Put all together, Merck has a
number of opportunities to grow through the decade.”

Experimental drugs acquired in its merger, including a
blood clot preventer known as Thrombin Receptor Antagonist, or
TRA, and boceprevir, a promising treatment for hepatitis C,
have fortified Merck’s late-stage drug pipeline.

“We need to see those clinical programs roll the right way
for them. TRA is obviously the big one,” said Les Funtleyder,
an analyst for Miller Tabak & Co.

Merck research chief Peter Kim said none of the patients
who appeared to have been cured by adding boceprevir to current
treatments have relapsed after two years of follow-up.

The company also reiterated its commitment to heart
medicines, an area that several drugmakers have made less of a
priority as more cholesterol and blood pressure treatments
become available in cheap generic forms.

“That’s one area they’re really strategically diverging
from everyone else,” said Avik Roy, an analyst with Monness,
Crespi, Hardt & Co.

But Roy noted that cardiovascular research is risky because
of the large, lengthy clinical trials required, significant
safety hurdles and widespread generic competition.

“That’s a roll of the dice,” he said.

Merck will continue to roll the dice with anacetrapib, an
experimental drug to dramatically raise good cholesterol from a
class tainted by Pfizer Inc’s (PFE.N: ) torcetrapib — the most
expensive clinical failure in pharmaceutical industry history.

“We have spent a lot of time studying this mechanism and
these issues,” Kim said of the safety problems that sank the
Pfizer drug. “We do not have the toxicities. We are moving
forward with confidence that we don’t have a torcetrapib

Merck, with more than 20 drugs now in late stages of
development, has been deemed since the Schering-Plough merger
to have one of the industry’s best drug pipelines.

The company plans to begin late stage trials of its
experimental treatment for Parkinson’s disease, preladenant,
this year. It also has high hopes for an osteoporosis drug,
odanacatib, for which it expects to seek approval in 2012.

Even so, analysts had been hoping the company would provide
some unexpected favorable information at Tuesday’s meeting.

Merck’s shares were down 28 cents, or 0.8 percent, at
$33.97 in afternoon trading on the New York Stock Exchange,
lagging the the Arca Pharmaceutical Index (.DRG: ) of large U.S.
and European drugmakers, which was up 0.6 percent.

“Part of the reason is the negative reaction to the
biosimilar (being abandoned),” Monness’ Roy said. “That’s
really the major news flow we’ve had this morning.”

Stock Market Advice

(Reporting by Lewis Krauskopf, Ransdell Pierson and Bill
Berkrot; Editing by Maureen Bavdek)

UPDATE 4-Merck to seek 5 new drug approvals this year