Merck & Co. (MRK: sentiment, chart, options) announced that it has met with officials at the Food and Drug Administration (FDA) to discuss the status of its market applications for the cholesterol drugs MK-0524A, a combination of niacin and the drug Cordaptive; and MK-0524B, a combination of niacin, Cordaptive and Zocor. MK-0524A was formally rejected by the FDA in April. However, the pharmaceutical company reported that FDA officials have now advised MRK that it should wait until results from an on-going clinical trial for the product are received before re-filing its application. The trial will not be completed until January 2013. Merck added it would continue to discuss whether other information could be used to support its application in order to allow for an earlier filing. Merck will not seek approval for MK-0524B until it completes its application for MK-0524A.

The shares of MRK have slipped roughly 0.37% this morning, continuing their overall downtrend. The equity has lost more than 38% since the start of 2008, easily underperforming the S&P 500 Index, which has lost more than 9% during the same time period.

Not surprisingly, sentiment is extremely pessimistic among options players. The Schaeffer's put/call open interest ratio for MRK stands at 1.15, which is higher than 84% of all those taken during the past 52 weeks. However, the security is vulnerable to downgrades. According to Zacks, the equity has earned 7 "strong buy" ratings and 4 "holds." Any downgrades from this optimistic bunch could spell trouble for the shares.