Captain, the latest Bloomberg update on the review, providing much more details:
Warner-Lambert's Rezulin to Get FDA Safety Review (Update5)
Bloomberg News
January 15, 1999, 4:33 p.m. ET
Warner-Lambert's Rezulin to Get FDA Safety Review (Update5)
Washington, Jan. 15 (Bloomberg) -- Warner-Lambert Co., the
fastest-growing U.S. drugmaker, said the safety of its Rezulin
diabetes pill, which has been linked to liver damage and 33
deaths, will be reviewed again by government experts.
Data on use of Rezulin since it went on the market in early
1997 will be evaluated March 26 by an advisory panel for the U.S.
Food and Drug Administration. In addition, Warner-Lambert said
it's delaying one study and halting another looking at broadening
use of Rezulin, one of its biggest-selling drugs with estimated
1998 sales of $700 million.
The developments could stall Rezulin's sales growth as
competitors including SmithKline Beecham Plc are on the brink of
bringing out diabetes drugs that may not put patients at risk of
liver damage. Rezulin is a pill that allows some diabetics to
avoid using insulin.
''Its growth is going to be quite limited,'' said Hemant
Shah, an independent drug-industry analyst. ''I don't think it's
ever going to become a multibillion-dollar drug.''
Shares in the Morris Plains, New Jersey-based drugmaker fell
1 3/16 to 69 15/16. SmithKline Beecham, which is pursuing FDA
approval for its competing diabetes drug, rose 3 5/8 to 69 5/8.
The FDA is calling the panel hearing to ask experts how it
might insure the drug is marketed safely in the future, and is
not considering recalling the product, said Murray Lumpkin, the
deputy director of the FDA's Center for Drug Evaluation and
Research.
''That's not the issue for the advisory committee,'' he
said. ''It is an open ended question. ... Are there are other
things we can do to market the drug more safely?''
While Warner-Lambert is scaling back some studies on wider
use of the drug, it's continuing others and will ask the FDA
panel to recommend it be allowed to promote the drug's use in
combination with other diabetes drugs.
Pressure
The drug will be the only item considered by the
endocrinology panel at the one-day March meeting, said Kathleen
Reedy, the panel's executive secretary. ''This is a highly
sensitive, highly public issue,'' she said.
The hearing could end up taking some pressure off Warner-
Lambert, said Ira Loss, an analyst with HSBC Washington Analysis
who covers the FDA. The agency held a similar meeting to review
Eli Lilly & Co.'s depression drug Prozac after it was linked to a
series of violent incidents, he said. The public vetting of the
drug's safety reduced pressure on Lilly and the FDA, Loss said.
''The same might also be FDA's intent here,'' Loss said.
Rezulin was invented by Japan's Sankyo Co. and licensed to
Warner-Lambert in the U.S. and Glaxo Wellcome Plc in Europe.
Glaxo halted sales of its version of the drug last year in the
U.K after at least five people died. Glaxo declined comment today
except to say it is ''in the process'' of seeking U.K. approval
to begin selling the drug again.
Warning Strengthened
Since Rezulin's introduction in March 1997, its warning
label has been strengthened three times. A black box on the label
-- considered the Food and Drug Administration's strongest
warning measure -- highlights the section on Rezulin's risks.
No deaths or liver transplants have been reported in
patients who started the drug after the third label change in
July, the company said last month.
That label extended the time doctors need to do monthly
monitoring of Rezulin patients for possible liver damage to eight
months from six months.
Even with the ''black-box'' warning, doctors have still been
prescribing the drug. Rezulin's third-quarter sales rose
32 percent to $181 million.
Competition Concerns
The real concern for Warner-Lambert may be competition.
Rezulin belongs to a new class of drugs called glitazones that
also includes drugs being developed by SmithKline Beecham and
Eli Lilly & Co., which appear to have fewer side effects.
Shares in Eli Lilly were unchanged at 81 1/2.
''You need Rezulin to maintain growth and Rezulin growth is
probably not going to be there,'' said Jack Lamberton, an analyst
with HSBC Securities Inc. ''If Rezulin doesn't accelerate, you
probably have to lower long-term growth estimates for Warner-
Lambert.''
In the near term, though, ''Warner-Lambert earnings are
bulletproof,'' said Lamberton, who lowered his recommendation on
the company's stock to a ''hold'' from a ''buy'' this morning.
SmithKline, the world's No. 9 drugmaker, in December applied
for European approval of its Avandia drug, which may generate
$1.8 billion in annual sales by 2005, according to Merrill Lynch
& Co. forecasts.
If the FDA decides these new drugs are needed urgently, the
agency could give them an expedited review -- meaning Rezulin
could face serious challengers as early as the end of 1999, said
Cynthia Beach, an analyst with Gerard Klauer Mattison & Co. with
a ''hold'' rating on Warner-Lambert.
Better Drugs
''The real threat to Rezulin are the new drugs,'' she said.
''What doctor would prescribe something when there's a better
product?''
Rezulin and the cholesterol reducer Lipitor turned Warner-
Lambert from one of the least-successful U.S. drugmakers into an
industry leader. Lipitor could have 1998 sales of more than $2
billion, analysts have estimated. Warner-Lambert's third-quarter
profit rose 49 percent to $295.5 million, or 35 cents a share, on
Rezulin and Lipitor sales.
Warner-Lambert said it is delaying a planned study into the
drug's effects in people at high risk of diabetes, and will halt
a separate study of whether the drug can reduce insulin
resistance in women with an ovarian syndrome.
The planned 1,000 patient study in people at high risk was
seen as particularly good news for Warner-Lambert when it was
announced late last year, because it indicated regulators were
more comfortable with the drug's risks.
--Kristin Reed in Washington with reporting by Kristin Jensen in
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