Headline: Monsanto's Arthritis-Pain Drug Celebrex Is Selling Briskly
"Once the freebies run out, sales could intensify." (from the story below)
(full text follows)
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By Thomas M. Burton, Staff Reporter of The Wall Street Journal
Monsanto Co.'s arthritis-pain drug Celebrex is fast becoming a sales
juggernaut, generating prescriptions in its third week on the market
that are more than six times those of the fast-selling cholesterol drug
Lipitor at a comparable stage.
But the question is whether this success will be enough to allow St.
Louis-based Monsanto to remain an independent company.
Celebrex, the forerunner of a new class of arthritis drugs known as
Cox-2 inhibitors, produced 82,600 prescriptions in the week ended
Sunday. That makes it the second-fastest start for a new drug in recent
years, surpassing cholesterol drug Lipitor, which had 13,100
prescriptions written in its third week in 1997. Lipitor, co-marketed by
Warner-Lambert Co. and Pfizer Inc., is expected to generate $3.1 billion
in sales this year and leads the U.S. among cholesterol medications in
new prescriptions.
Among all recent fast starters, Celebrex's sales are exceeded only by
those of the Pfizer impotence drug Viagra, which sold 224,100
prescriptions in its third week but peaked after three months.
"Celebrex could easily get to that number because they haven't even
been actively selling Celebrex yet," said Shel Silverberg, senior vice
president of NDC Health Information Services, an information provider to
the pharmaceutical industry that measured the prescriptions. Sales
visits to doctors by Monsanto and its co-marketer, Pfizer, don't start
until Feb. 22, and an ad campaign will soon commence. The sales so far
also have taken place on top of Monsanto's extensively doled-out, free
30-day "starter kits" of the drug to doctors. Once the freebies run out,
sales could intensify.
"The early data are stunning," said J.P. Morgan drug analyst Carl
Seiden.
Monsanto badly needs the Celebrex sales. The company has gone on an
$8 billion buying spree in the agricultural biotechnology and
agricultural-seed field that has left it with heavy debt. A planned
$35.08 billion combination with American Home Products Corp., which
could have alleviated that debt burden, fell through. Monsanto reported
a 1998 net loss of $250 million, because of restructuring charges, and
said it expects more charges this year to pare its work force further.
"It is highly unlikely that Monsanto will exist in its current form
12 to 18 months from now," said J.P. Morgan analyst Donald Carson. "At
some point, people will ask what's next after Celebrex. And it's not
clear there is much."
Gary Crittenden, Monsanto's chief financial officer, responded, "We
certainly have the wherewithal to be independent, if that's the best
thing for our shareholders. But if the right opportunity came along, we
would be crazy not to consider it."
The new-drug pipeline at Monsanto's Searle drug division took a major
hit earlier this year when the company pulled the plug on the
development of two anticlotting agents, called orbofiban and
xemilofiban, for which Monsanto and Wall Street had once held high
hopes. Xemilofiban, in particular, had been viewed as a promising drug
to be used in patients who had had angioplasty procedures to clear
coronary arteries.
"The crashing and burning of the fiban drugs was a shock," said
Philip Needleman, Monsanto's chief scientist and Searle's president.
Dr. Needleman said the company has high hopes for other drugs in the
pipeline, such as another arthritis pain drug, valdecoxib, and
eplerenone for hypertension and congestive heart failure. Also, the
agriculture business at Monsanto is growing. Sales of the weed-killer
Roundup are expected to increase to $2.7 billion this year from $2.4
billion last year, despite price cuts. Sales of genetically engineered
"Roundup-ready" soybean, corn, cotton and canola seed -- designed to
withstand heavy doses of the herbicide -- are the company's
fastest-growing business, expected to produce possibly $400 million in
sales this year.
Such strengths, along with a stock price that until recently was
anemic, gave rise to takeover rumors such as the notion that DuPont Co.
might acquire the company. But DuPont has said it isn't pursuing any
such plan.
In the meantime, Celebrex is surpassing the early sales figures for
numerous drugs that have become blockbusters, such as the antidepressant
Prozac, the ulcer drug Prilosec, and Zyprexa and Risperdal for
schizophrenia, said J.P. Morgan's Mr. Seiden. The class of "Cox-2"
drugs, which act on an enzyme called cyclooxygenase-2, includes Celebrex
and Merck & Co.'s Vioxx, which is likely to enter the market this
spring. And Monsanto and Merck have possibly better, second-generation
Cox-2 drugs that they are exploring.
The drugs' success stems from what many physicians believe is their
side-effect advantage over existing arthritis drugs, which cause
sometimes-fatal bleeding ulcers in a small minority of patients and can
cause less-serious stomach discomfort in many.
But the Cox-2 drugs aren't necessarily any better than older ones at
stopping pain, and arthritis patients often find that after about a year
on one drug, it becomes less effective. That could still happen with
Celebrex, too. Even so, doctors may prove reluctant to switch patients
away from Celebrex or other Cox-2 drugs because of their probable
gastrointestinal advantages.
"Monsanto now is the Celebrex company," said J.P. Morgan's Mr.
Carson. "It wasn't long ago that it was called the Roundup company."
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