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For Merck and Schering-Plough, it is the $5 billion question: Does Zetia prevent heart attacks and strokes or not? It has been 13 months since Forbes reported the results of the first study that asked that question, setting off a chain reaction of scientific and governmental inquiry that has dramatically pushed down sales of Zetia and its sister drug, Vytorin, which together generated some $5 billion in annual sales last year.

The study, called ENHANCE, showed no benefit to the arteries when Zetia was added to the off-patent Zocor. Vytorin is a combo pill of Zetia and Zocor, and is sold by Merck (nyse: MRK - news - people ) and Schering in a joint venture. Shares of both companies have plummeted, and Merck will try to shore up investor confidence at a meeting with analysts tomorrow. Now a new analysis from a study funded by the National Institutes of Health seems to show Zetia works on the same measure of artery disease it flunked in ENHANCE.

Has Zetia been exonerated? No. The new study, SANDS, is the first new evidence that ENHANCE may have been wrong. In the words of J.P. Morgan analyst Chriss Schott, it's "finally a positive data point." It will provide some comfort to doctors prescribing the drugs as national guidelines already suggest: as options for people who can't tolerate more well-proven cholesterol-lowering drugs because of side effects. But it is unlikely to head off the next iceberg that Wall Street is worried about: that insurers will make getting the Vytorin combo pill more expensive during the next year. And it emphasizes how Merck and Schering have failed to do the studies needed to defend their $5 billion-a-year (sales) cholesterol franchise.

William James Howard of Washington Hospital Center, the lead investigator of SANDS, firmly believes his results are a strong counterargument to ENHANCE, which he calls "unfortunately not a sound scientific study." He is an expert in cholesterol who does paid speaking for many drug makers. He says his study "has given some comfort that Zetia is a rational choice." Both ENHANCE and SANDS measured how much thicker patients' arteries got, using ultrasound cameras to look at arteries in the neck. ENHANCE tested the Vytorin combo (Zetia plus Zocor) against Zocor alone in patients with a genetic disease that causes super-high cholesterol, and the addition of Zetia made no difference. SANDS wasn't designed to evaluate the question of what Zetia adds to a cardiovascular regimen. It showed that among a group of Native Americans with diabetes, healthier arteries result from more aggressive treatment of both high cholesterol and blood pressure. The initial results were published in the Journal of the American Medical Association in April.

In an effort to tease out the effect of Zetia, researchers looked at a subgroup of patients who were supposed to lower their cholesterol to very low levels. Sixty-nine people got Zetia on top of more proven cholesterol drugs and 154 didn't. So long as they lowered their LDL, or bad cholesterol, by the same amount, their arteries did equally well, Howard says. This analysis was published in the current Journal of the American College of Cardiology.

Howard argues that the arteries of the patients in ENHANCE had simply been cleared out by years of treatment with cholesterol drugs, called statins, and so it was impossible to show a difference. Cincinnati cardiologist Evan Stein, one of the coauthors of the ENHANCE paper and a big proponent of the too-thin argument, reiterated it in an editorial that appears alongside SANDS in the cardiology journal.

The argument that walls were too thin got a boost from a recently presented analysis by John Kastelein of University Hospital Center in the Netherlands, the lead investigator of ENHANCE. He looked at a number of studies that showed in patients treated with genetically super-high cholesterol who'd been treated, it was getting difficult to show a difference in artery thickness. The patients had been treated so much with statins that it was difficult to show a difference. But Kastelein also presented another analysis showing that in ENHANCE, differences in cholesterol level based on Zocor resulted in differences in artery thickness. So adding Zetia to Zocor in that study still should have resulted in thinner arteries.

Has Merck's comeback turned into a wipeout?

Under chief Richard Clark, an unassuming company lifer, Merck (nyse: MRK - news - people ) staged a seemingly amazing turnabout from the dark days of 2004, when it had to stop selling the painkiller Vioxx after its own studies linked the drug to an increased risk of heart attack and plaintiffs' lawyers swarmed the company.

But though Merck's share price surged to pre-Vioxx highs early this year as Clark settled the litigation for just $5 billion and got eight drugs approved in two years, the stock now sits at a Vioxx-era $26, down 50% in 11 months. Don't just blame the financial crisis--that's the worst performance of any big pharmaceutical company this year.

An earnings guidance call Thursday and a meeting with analysts at company headquarters Dec. 9 will give Clark a chance to soothe Wall Street. The problem will be making analysts feel they haven't heard it all before.

One of Clark's first moves, in 2005, was to cut 7,000 jobs; Merck just announced it would cut 7,200 more. He's promised "fundamental changes" to the company's business model. But really getting Wall Street's attention will require unveiling a truly impressive research surprise or announcing a big acquisition.

"I want to like Merck, but they keep not succeeding," says Les Funtleyder, health care strategist at Miller Tabak. "They have some decent people and a very good research structure, but we have to go with the facts and the fact is success has been elusive."

Merck's total sales will drop 1% to $23.9 billion next year, according to analyst John Boris at Citigroup. He's bullish because the stock is so cheap, but in a recent report, he laid out the challenge Merck will face in 2009: Sales of top-seller Singulair, for allergies and asthma, will barely grow because of safety worries, and generics maker Teva Pharmaceuticals (nasdaq: TEVA - news - people ) could launch a copycat ahead of schedule. The company's vaccines division has stumbled due to manufacturing and marketing issues that executives need to fix--fast.

Has Merck's comeback turned into a wipeout?

Under chief Richard Clark, an unassuming company lifer, Merck (nyse: MRK - news - people ) staged a seemingly amazing turnabout from the dark days of 2004, when it had to stop selling the painkiller Vioxx after its own studies linked the drug to an increased risk of heart attack and plaintiffs' lawyers swarmed the company.

But though Merck's share price surged to pre-Vioxx highs early this year as Clark settled the litigation for just $5 billion and got eight drugs approved in two years, the stock now sits at a Vioxx-era $26, down 50% in 11 months. Don't just blame the financial crisis--that's the worst performance of any big pharmaceutical company this year.

An earnings guidance call Thursday and a meeting with analysts at company headquarters Dec. 9 will give Clark a chance to soothe Wall Street. The problem will be making analysts feel they haven't heard it all before.

One of Clark's first moves, in 2005, was to cut 7,000 jobs; Merck just announced it would cut 7,200 more. He's promised "fundamental changes" to the company's business model. But really getting Wall Street's attention will require unveiling a truly impressive research surprise or announcing a big acquisition.

"I want to like Merck, but they keep not succeeding," says Les Funtleyder, health care strategist at Miller Tabak. "They have some decent people and a very good research structure, but we have to go with the facts and the fact is success has been elusive."

Merck's total sales will drop 1% to $23.9 billion next year, according to analyst John Boris at Citigroup. He's bullish because the stock is so cheap, but in a recent report, he laid out the challenge Merck will face in 2009: Sales of top-seller Singulair, for allergies and asthma, will barely grow because of safety worries, and generics maker Teva Pharmaceuticals (nasdaq: TEVA - news - people ) could launch a copycat ahead of schedule. The company's vaccines division has stumbled due to manufacturing and marketing issues that executives need to fix--fast.