It's been a rough couple of days for pharmaceutical giant Merck (MRK: sentiment, chart, options). After delaying its date in the earnings confessional yesterday, the company announced disappointing results regarding a study of cholesterol drug Vytorin a joint venture with Schering-Plough (SGP). What's more, when the company finally did report earnings, investors chose to focus on the company's lack of a 2008 earnings forecast, as opposed to stronger-than-expected second-quarter numbers. More specifically, Merck Chief Executive Richard Clark stated that he was ready to reiterate the firm's 2008 financial forecast of $3.28 to $3.38 per share (excluding items)... that is, until the latest Vytorin results were released.

In light of the news, MRK investors have retaliated by sending the stock to a new multi-year low of $31.15 within the first minute of trading. The shares, which have fallen about 35% year-to-date beneath resistance from their 10- and 20-week moving averages, are now trading in a range not seen since late 2005.

However, not only are investors responding with a vengeance, so are analysts. Since this morning, the drug maker has: been downgraded to "neutral" from "buy" at Merrill Lynch; had its price target slashed to $36 from $46 at Bernstein; had its price target cut to $44.25 from $50.80 at Deutsche Bank; been downgraded to "market perform" from "outperform" at Leerink Swann; had its price target reduced to $38 from $43 at Goldman Sachs; and saw its price target slashed by $6 to $40 at Credit Suisse.

Meanwhile, option players are flocking to the bears' lair, too. In early trading, MRK's August 30, 32.50, 35 and September 30 puts have already seen a combined volume of more than 23,000 contracts cross the tape.