Monsanto's
Arthritis Drug
Sells Briskly
By Thomas M. Burton
02/10/99
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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Fast Out of the Block
Prescriptions of three leading drugs in their first three weeks on the
market:
% growth
Week 1 Week 2 Week 3 WEEK 1-WEEK 3
Celebrex 9,500 46,200 82,600 +770%
Viagra 42,100 128,900 224,100 +432%
Lipitor 4,500 8,400 13,100 +191%
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Source: NDC Health Information Services
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