NEW YORK - Merck & Co Inc shares fell 3.8 percent on Thursday amid speculation its Zetia cholesterol medicine fared poorly in a clinical trial comparing it with Abbott Laboratories' Niaspan in preventing plaque build-up in arteries.

The study was stopped early for unspecified reasons, according to a posting on a federal clinical trials website, although the posting did say it was not stopped because of safety concerns.

The study evaluated the impact of the drugs on atherosclerosis by measuring change in thickness of the carotid artery. Zetia cuts levels of bad LDL cholesterol, while Niaspan -- an extended-release version of niacin -- raises good HDL cholesterol.

Natixis Bleichroeder analyst Jon LeCroy downgraded his rating on Merck from buy to hold, saying he suspected the early termination means Niaspan may have worked better than Zetia.

We are now assuming that this trial significantly favored Niaspan and, as a result, we are decreasing our sales estimates for both Zetia and Vytorin, LeCroy said in a research note.

Vytorin is a combination pill that includes Zetia and statin drug Zocor.

However, Deutsche Bank analyst Barbara Ryan said the negative reaction of Merck shares was, extremely premature and probably unwarranted.

If the study were terminated for overwhelmingly positive result from Niaspan, I would expect that Abbott would have announced that, Ryan added.

The study was sponsored by Abbott, but led by independent researchers. An Abbott spokeswoman said the company was made aware of the decision to stop the study, but does not know the reason for stopping it.

Dr. Allen Taylor, the lead investigator on the study and a cardiologist from Washington Hospital Center in Washington, D.C., declined to expand beyond what was posted on the clinical trials website.

Merck sells Zetia and Vytorin in a joint venture with Schering-Plough Corp, which Merck agreed to buy in March for $41 billion.

The trial could be the latest blow for Zetia and Vytorin, whose growth has been blunted by negative publicity over studies raising questions about their effectiveness in preventing heart disease and their safety.

 JP Morgan analyst Chris Schott said in a research note he does not view the halted study as particularly significant for Zetia, regardless of the outcome.

But Schott cautioned: As we have seen in the past, media scrutiny/reaction can have more of an impact on the cholesterol franchise than the relevance of clinical data.

Shares of Merck, a Dow component, fell $1.06 to $26.98 in afternoon trading on the New York Stock Exchange. Schering was down 2.5 percent at $24.63, while Abbott slipped 1.1 percent to $45.79. (Reporting by Lewis Krauskopf; editing by Phil Berlowitz and Andre Grenon)