Strongsales of cholesterol drugs helped Schering-Plough post a twofold increase inquarterly profit this week, but earnings may expose an over-reliance on Vytorinand Zetia.

JohnBoris, an analyst with Bear Stearns, said Schering-Plough needs to lower itsdependence on the cholesterol joint venture, which contributes 78%of its pretax profits. Boris expects that number to decrease to 71% in 2010 asthe company absorbs sales of products from Organon BioSciences, the biotechfirm it acquired earlier this year. “Another deal is needed to furtherdiversify,” Boris wrote.

Sales of Vytorin and Zetia rose to $1.3 billion in thequarter, up 34% from a year earlier. They continue to gain share, despite theintroduction of generic Zocor (simvastatin) from multiple sources late last year.Pfizer’s Lipitor, meanwhile, the best-selling LDL-cholesterol lowering drug, islosing share.

Zetiaand Vytorin are indicated for second-line treatment and tend to be used after failureof other medications, most often generic simvastatin. “Generally simvastatinwill not get patients to their target goal. So we see very good uptake of Zetiabeing added on to existing therapy or patients being switched to Vytorin,”Carrie Cox, Schering-Plough EVP, president, global pharmaceuticals, said duringSchering-Plough’s second-quarter earnings call, according to a transcript from Thomson Street Events.

Vytorinhas also benefited from a shift in clinical practice toward more aggressive LDLmanagement, Cox said.

But the growth rate for the cholesterol JV is already decelerating,albeit modestly. Vytorin sales increased 38% to $686 million in the secondquarter, a slower growth rate than in the first quarter and in 2006, accordingto The Wall Street Journal.Schering-Plough CEO Fred Hassan told the Journalhe had anticipated some “moderation” as the two products become established inthe market.

And Schering-plough faces growing competition to other keyproducts, allergy drug Nasonex, arthritis treatment Remicade and hepatitis Cdrugs like Peg-Intron, a factor that dampens the outlook for its stock price,said Boris.

Schering-Plough’s partner in the cholesterol JV, Merck, is morediversified, with other blockbusters in its portfolio, namely rhinitistreatment Singulair and antihypertensives Cozaar and Hyzaar. Merck alsohas more affiliates. Equity income, which reflects income frompartnershipsand alliances, totaled $759 million in the second quarter, the companysaid. Ofthat, the cholesterol partnership contributed $465 million, a 45%increase overthe prior year. The balance of equity income comes from other jointventures, includingMerial, Sanofi Pasteur MSD and Johnson & Johnson Merck.