Celexa poses threat to Lilly's Prozac, analysts say
Depressing news for Lilly Prozac seen in rival threat
By Stephanie O'Brien, CBS MarketWatch
Last Update: 4:18 PM ET Mar 22, 1999
NewsWatch
NEW YORK (CBS.MW) -- Merrill Lynch is singing the blues about
Prozac, cutting its revenue expectations from Eli Lilly's anti-depressant as
rival drug Celexa threatens to take a 19 percent market share within three
years.
Sales of Celexa, the anti-depressant developed by
Forest Labs (FRX) and co-marketed by
Warner-Lambert (WLA), could exceed $1 billion
in 2003, Merrill analysts said in a note to clients
released Monday.
In a blow to primarily to market-leading Lilly
(LLY), that would give Celexa 19 percent share of
the market, jumping from 4.6 percent currently,
according to Merrill Lynch.
Forest Labs' stock gained 1 1/4 to 53. Lilly shares
closed down 2 3/8 to 85 1/16 while
Warner-Lambert's stock lost 3 15/16 to 66 3/4.
Merrill Lynch, which commissioned a research firm
to get doctor feedback, found that Celexa
reportedly has fewer serious side effects, including
the incidence of sexual dysfunction and drug
interactions.
Doctors also said Celexa cost less and they were able to give the drug to
patients that had not responded before to a similar class of drugs. As a
result, Celexa poses a threat not only to Prozac but also Pfizer's (PFE)
Zoloft and SmithKline Beecham's (SBH) Paxil.
"Due to the threat of Celexa we are revising our Prozac growth rates
downward to low single digits from high single digits," said Steven Tighe in
his research note.
The revision is offset in 1999 and 2000 by Actos, a diabetes drug that got
fast-track approval from the U.S. Food and Drug Administration, so its
launch date was moved up. Tighe didn't revise his revenue forecast for
Zoloft.
What's more, Warner-Lambert might benefit "more materially" from its
co-promotion effort than previously thought, Tighe said. "We are
conservatively forecasting contributions from Forest Labs of $37 million in
1999, $70 million in 2000 and $102 million in 2001," he said.
The analysts left earnings estimates for Lilly unchanged. They expect the
company to earn $2.27 in the 1999 fiscal year and $2.65 in 2000.
Stephanie O'Brien is a reporter for CBS MarketWatch.
cbs.marketwatch.com
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