(Corrects paragraph 11 to remove reference to Astellas Pharma holding European rights for the intravenous version of vernakalant drug, and to clarify Merck holds the global rights for it.)
* Merck cites regulatory environment, development timeline
* Merck to continue to support development of drug's intravenous version
* Cardiome's shares hit life low
By Aftab Ahmed
March 19 (Reuters) - Cardiome Pharma Corp said its partner Merck & Co dropped the development of an oral version of their drug to treat irregular heart rhythm, sending the biopharmaceutical company's shares down to their life low.
Canada's Cardiome, which develops drugs for diseases of the heart and circulatory system, and Merck were developing an oral version of vernakalant, a drug to treat chronic atrial fibrillation -- a heart rhythm disorder that can lead to stroke and heart failure.
The Canadian company said Merck cited regulatory environment and the expected development timeline for the pull out.
In December, U.S. regulators had revised the label for Sanofi SA's similar heart drug Multaq to reflect a doubling of health risks, including death, for some patients with irregular heart rhythms.
"There were some safety concerns (with Multaq). So, Merck anticipated FDA being critical over vernakalant," said Morningstar analyst David Krempa.
In 2010, Merck had postponed a late-stage trial of the heart drug, without giving any reason.
Analysts said the full ramification of the development was not yet known.
"The news was very surprising. Merck had been progressing with trials in order to prepare the drug to be moved into pivotal studies," said Canaccord Genuity analyst Neil Maruoka.
Merck will, however, continue to support the intravenous version of vernakalant, which is marketed in the European Union and Latin America under the trade name Brinavess.
"Brinavess sales, ex-US, could be a driver of future value, but uptake has been slow and meaningful sales are unlikely before 2013," BMO Capital Markets analysts said in a note to clients. The brokerage cut its rating on the stock by a notch to "market perform."
Merck holds the global rights for the intravenous version of vernakalant after Cardiome Pharma transferred the North American rights to the U.S. drugmaker last year.
The company's shares were down 55 percent at 87 Canadian cents on Monday on the Toronto Stock Exchange. The stock was the biggest percentage loser on the exchange. (Reporting by Aftab Ahmed in Bangalore; Editing by Sriraj Kalluvila)