Update: It’s open season on Schering-Plough (SGP). Shares of the drug company plunged 26% in early morning action Monday to a 52-week low after another big setback for Vytorin, the cholesterol drug the company makes with partner Merck (MRK). A panel of heart doctors at the American College of Cardiology conference in Chicago Sunday urged that physicians use other drugs to reduce patients’ cholesterol, after data that showed Vytorin, unlike older drugs called statins, failed to treat heart disease. The decision is likely to lead to a plunge in sales of Vytorin, which combines Schering-Plough’s Zetia with Merck’s Zocor and posted $5 billion in sales last year. A loss of those sales will hit smaller Schering-Plough especially hard, though Merck saw its shares drop 16% just before 10 a.m. The declines at Schering-Plough and Merck are the latest evidence that scientists may not know as much about treating heart disease as they once thought - though statins such as Lipitor emerge from the latest developments largely unscathed. “People need to turn back to statins,” Yale cardiologist Dr. Harlan Krumholz said.

Isis Pharmaceuticals (ISIS) is looking at a nice gain after setting up a $325 million licensing partnership with Genzyme (GENZ) to develop Isis’ cholesterol-lowering drug mipomersen. Genzyme will buy $150 million worth of Isis stock at $30 a share and pay the company $175 million in upfront cash. Genzyme will also make milestone payments as the drug moves through development that could be worth as much as $1.6 billion. “Mipomersen is an innovative approach to addressing a real unmet medical need, and we believe it could prove to be the most effective lipid-lowering agent for high risk patients for whom conventional therapies are not sufficient,” said Genzyme chief Henri Termeer. The news comes as big pharmaceutical companies are struggling to find replacement for blockbusters like Lipitor as they prepare to move off-patent. The arrangement also comes just two months after Isis chief Stanley Crooke estimated the value of a mipomersen license at around Isis’ market capitalization - then around $1.4 billion. Isis’ market value stands to be sharply higher when the stock reopens for postclose  trading later Monday.