Merck wins FDA nod for a weaker form of its embattled sleep drug

A year after enduring a stinging FDA rejection, Merck ($MRK) has convinced the agency to sign off on lower doses of its suvorexant, a novel sleep drug once predicted to become a blockbuster.

The pill, to be sold as Belsomra, works by blocking the brain's orexin receptors, preventing the absorption of chemicals that help keep people awake. Approved to treat insomnia, it's the first drug of its kind to pass FDA muster.

Belsomra came through with some impressive efficacy results in its Phase III program, helping patients fall asleep quickly and stay at rest through the night on the way to meeting 15 of its 16 primary endpoints. However, alarming safety concerns led to an untenable situation with regulators: Merck's best results came by giving patients between 30 mg and 40 mg of the drug, dosages the FDA said were associated with risks of next-day drowsiness that could lead to deadly auto crashes and thus were too dangerous to approve.

Now, after rejecting Merck's first application last summer, the agency has struck a compromise, approving Belsomra at doses between 5 mg and 20 mg and advising physicians to start with the smallest pill and adapt to patients' needs. Severe insomniacs getting a 20-mg dose should be cautioned against next-day driving, the agency said, and even those on the lowest regimen should be warned about the dangers.

The problem for Merck is that, at such low doses, Belsomra will likely have trouble standing out in a market already flush with generics, including copies of the top-selling Ambien. And Belsomra's approval is based solely on placebo-controlled studies, not head-to-head trials against other drugs, giving the Big Pharma an uphill battle in convincing the U.S.'s roughly 60 million insomniacs to try something new.

As such, analysts figure Belsomra's annual sales will peak somewhere around $500 million, well below the $1 billion many forecast back in 2012, when the treatment seemed poised to usher in a new era for sleep drugs.

Merck plans to launch the drug late this year or in the early part of 2015, the company said.

"Belsomra is the result of more than a decade of Merck research in neuroscience and provides tangible evidence of our long-standing commitment to innovation," Merck Neuroscience Vice President David Michelson said in a statement.

- read Merck's release
- here's the FDA's statement