FOCUS-Lilly gets boost for battered Evista
Wednesday August 5, 9:05 pm Eastern Time
By Kevin Drawbaugh
CHICAGO, Aug 5 (Reuters) - Drug maker Eli Lilly & Co. on Wednesday got a welcome surprise from Europe -- early marketing approval and broad fracture-prevention and breast-cancer labeling for Evista, the company's osteoporosis drug.
The world's ninth-largest drug maker said the approval clears it to launch the drug in the European Union for prevention of spinal fractures in post-menopausal women at high risk for bone-brittling
osteoporosis.
The company said the EU approval marks the first regulatory review of data from a key Evista clinical trial on spine fractures involving 7,705 women in 25 countries worldwide.
Interim trial results, to be presented next month at a conference in Berlin, are expected to show Evista reduced the risk of spine fractures in osteoporotic women by 38 to 52 percent after two
years, Lilly said.
Lilly also said the EU Evista label cites studies showing its use reduced newly diagnosed breast cancer by 50 percent.
''This language is much stronger than the U.S. label, which only states Evista does not increase the risk of breast cancer,'' said Lehman Brothers industry analyst Anthony Butler.
Lilly is seeking U.S. Food and Drug Administration approval to broaden Evista's U.S. breast cancer label, a step seen as crucial to the drug's future, which some analysts question.
''Evista was part of that bridge to the next century of sales and earnings growth for Lilly and people worry that that bridge has burned down,'' said Neil Sweig, industry analyst at Southeast Research
Partners.
In the United States, analysts said Evista has been a big disappointment since its launch in January. Sales of the drug totaled about $48 million in the first half of 1998.
Early this year, analysts' 1998 revenue estimates for the drug ran as high as $450 million. ''It now appears it is going to struggle to achieve about $150 million in sales in 1998,'' Sweig said.
That prospect was evident after the drug's initial weeks on the market and it dragged down Indianapolis-based Lilly's share price to the high 50s from the low 70s over four months.
The stock has recovered since early June, however, and analysts said Lilly has held fairly steady over the past three weeks as other major U.S. drug stocks have tumbled.
Shares in Lilly were up 1-9/16 to 67-3/4 at midday on the New York Stock Exchange as other drug stocks were mixed.
Evista and Zyprexa -- an anti-schizophrenia drug on track to generate $1.4 billion in 1998 sales -- had been seen by analysts as ''twin towers'' supporting Lilly into the next century as it faces the decline of its top product, Prozac.
The blockbuster anti-depressant loses patent protection in two stages in 2001 and 2003, exposing it around that time to competition from generic knockoffs. The drug's market share is already under attack from a growing number of rival products, although Prozac sales continued to grow in the second quarter.
Analysts said Lilly's research pipeline will produce only three all-new drugs in the next three years, none of them expected to reach more than $500 million in annual sales.
With that as a background, analysts said the company had been looking to Zyprexa and Evista to carry a heavy load. Market pessimism on Evista's ability to shoulder its share of the burden could ease on the European news, analysts said.
''The timing and strength of the EU label confirm our positive expectations for Evista,'' Lehman's Butler said. ''Positive spillover from Europe could cause us to increase our 1999 Evista revenues (estimate) of $625 million.''
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