UPDATE 3-Niaspan tops Zetia in new setback for Merck drug

* Niaspan leads to reduction in artery wall thickness

* No meaningful change seen with Zetia

* 5 times as many serious adverse events seen with Zetia

* Journal editorials cite several limitations of study (Adds analyst comment, AHA comment on Zetia safety)

By Bill Berkrot and Ransdell Pierson

ORLANDO, Nov 15 (Reuters) - Abbott Laboratories' (ABT.N) Niaspan appeared to be more effective and safer than Merck & Co's (MRK.N) Zetia as a supplementary cholesterol treatment to statins, according to a small study that is likely to further tarnish Merck's damaged cholesterol franchise.

The damage, however, may be limited by the limitations of the study itself, which included data from just 208 patients and was criticized in a major medical journal.

"Niacin is the clear winner and led to very clear reductions in the amount of atherosclerosis that patients had," Alan Taylor, the study's lead investigator who will present the data on Monday at the American Heart Association scientific meeting in Orlando, Florida, said in an interview on Sunday.

Atherosclerosis, which occurs when there is a build-up of dangerous plaque in the arteries, can lead to heart attacks.