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Biotech / Medical : ICOS Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Icebrg who wrote (1044)	7/21/2004 6:31:53 AM
From: Icebrg	Respond to of 1139

Sex On Demand: A Big Disappointment Matthew Herper, 07.21.04, 6:00 AM ET NEW YORK - When Viagra was approved by the United States Food and Drug Administration on Apr. 10, 1998, the blue impotence--sorry, erectile dysfunction--pill got a big rise out of drug-industry stock analysts. "It was a cultural phenomenon," remembers Robert Hazlett, an analyst at SunTrust Robinson Humphrey. In its first three months, $411 million worth of Viagra was sold, and 160,000 physicians wrote prescriptions for the drug. "That first quarter was extraordinary, but we've never seen anything like it--before or since." Viagra: "A Cultural Phenomenon" Some sell-side analysts had rose-colored forecasts. One estimate reportedly predicted Viagra sales would hit a stellar $11 billion. That would have made Viagra the top-selling drug in the world. But last year, Viagra sales came in at a mere $1.88 billion worldwide--a fifth of the total revenue brought in by the real top dog, the cholesterol-lowering drug Lipitor (see "The World's Best-Selling Drugs"). Both medicines are made by Pfizer (nyse: PFE - news - people ). Two new cholesterol drugs are entering the market, but some analysts say that even with the new entrants the total number of patients on impotence drugs is not increasing. Says Jim Birchenough, an analyst at Lehman Brothers: "The market's just never taken off." More than 12 million men have tried Viagra, but only three million have stuck with it. Several factors could have hurt the pill's total sales. For one thing, while cholesterol medicines are generally paid for by health plans, men pay for erectile-dysfunction pills out of their own pocket. Neil Sweig, an analyst at Fulcrum Global Partners, who emphasizes that Viagra was still a "breakthrough product," points out two other problems: Viagra is widely counterfeited, particularly outside the U.S., and the pill doesn't work for one in three men who try it. Sweig thinks that new erectile-dysfunction drugs could eventually expand the market to as much as $4 billion, but he says Viagra may have peaked. Birchenough covers not Pfizer but Icos (nasdaq: ICOS - news - people ), a biotech company that co-markets Viagra rival Cialis with drug giant Eli Lilly (nyse: LLY - news - people ). Cialis has been heavily promoted, and has a real advantage over Viagra--it lasts for 36 hours instead of four. But Birchenough thinks patients aren't becoming regular users. "New-prescription market share has been flat for 14 weeks," he says. Perhaps, he suggests, many of these people just don't want to pop impotence pills regularly. He sees Cialis' share of the market flattening, but, more importantly, he doesn't think the market will grow much at all, despite the entry of Cialis and another drug, Levitra from Bayer (nyse: BAY - news - people ) and GlaxoSmithKline (nyse: GSK - news - people ). Birchenough recently cut his rating on the company to "equal weight" from "overweight." Lehman Brothers has done investment banking for Icos. Not everyone is so bearish. Hazlett, the SunTrust analyst, disagrees with the notion that the market isn't growing. He argues that the flattening some other analysts see is the result of an across-the-board bias in prescription data sold to analysts. "The market is growing and will continue to grow," he says. He rates Icos a "buy"; SunTrust has done banking for Icos. Even in Hazlett's optimistic analysis, however, total sales of all three erectile-dysfunction treatments will be a "mere" $4.7 billion in 2010. (Cialis, he estimates, will have sales of more than $1.5 billion by then.) That's not bad but investors might want to remember that when it comes to erectile-dysfunction pills, the anticipation has so far been better than the actual payoff. forbes.com