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Cardiome Pharma shares sink as Merck drops project

The Associated Press

Canadian drug maker Cardiome Pharma Corp. said Monday that Merck & Co. Inc. has quit developing an oral version of the heart drug vernakalant due to regulatory issues, causing shares of Cardiome to plunge more than 50 percent.

A Merck spokesman said by email that Merck made the decision "following a very careful assessment of developmental timelines and the anticipated regulatory requirements ahead." He declined to elaborate.

Vernakalant is used to treat a heartbeat irregularity called atrial fibrillation. The oral version was being tested as way to help people prevent atrial fibrillation over long periods of time.

Vancouver-based Cardiome said it will evaluate the impact of Merck's decision on its business and release a review. Cardiome said it already had decided to cut by half the rate at which it is spending cash reserves each year to support its operations.

Merck, based in Whitehouse Station, N.J., said it will working with Cardiome on an intravenous version of vernakalant, which is sold in the European Union and Latin America under the trade name Brinavess.

"We are extremely disappointed with the decision Merck has made," Cardiome CEO Doug Janzen said in the company's announcement. "However, we look forward to continuing to work with Merck on the worldwide development and commercialization of vernakalant IV."

Brinavess is approved for use in adults in 37 countries and Merck has plans to launch the drug in about 30 more countries this year, according to Cardiome Pharma.

Cardiome said it expects to report its full 2011 earnings on March 28.

Shares of Cardiome dropped $1.08, or 56 percent, to 85 cents by late afternoon.