Shares of drugmakers Schering-Plough and Merck fell sharply on Monday following release of a study that showed that Vytorin, a jointly marketed cholesterol drug, failed to improve a rare heart condition and showed a potential cancer risk in certain patients.

Merck said its long-term financial earnings outlook remained unclear after the result of the study. In a conference call with investors, Schering’s chief executive and chairman, Fred Hassan, said the company’s strong stable of drugs in late-phase development would help supplement the “cholesterol challenge we’re facing in the US”.