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Shares of



fell more than 6% Tuesday after Merrill Lynch lowered its investment rating on the stock to sell from neutral, citing potential competition for its Avonex multiple sclerosis treatment.

"We believe there is significant risk to sales of Avonex for multiple sclerosis as the MS market matures and the drug encounters increased competition from Serono's Rebif," analyst Eric J. Ende wrote in a research note.

An article published Tuesday in the journal Neurology contained results of a study showing Rebif was better than Avonex at preventing relapses and brain lesions in multiple sclerosis patients after 48 weeks of treatment. The study wasn't new but its publication in an accredited medical journal expanded certain marketing privileges in Europe and boosted Serono in Zurich. Serono's marketing partner for Rebif in the U.S. is

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"As Pfizer's sales force gains traction with community-based neurologies, we expect Pfizer to begin having a negative impact on Avonex sales during the first quarter of 2003," Ende noted. "In addition, we believe that Amevive, awaiting FDA approval for psoriasis, is likely to meet significant competition from several other drugs being developed for the disease."

Merrill is currently projecting 2002 Avonex sales of $1.04 billion and 2003 sales to come in at $1.09 billion. The company's shares have had a good runup in recent weeks, trading up 55% since Oct. 4. Lately, the stock was losing $2.93, or 6.3%, at $43.32 on the

New York Stock Exchange..