Monsanto, Merck Studies Show New Arthritis Drugs Work Well
Bloomberg News
November 10, 1998, 4:36 p.m. ET
Monsanto, Merck Studies Show New Arthritis Drugs Work Well
San Diego, Nov. 10 (Bloomberg) -- Merck & Co. and Monsanto
Co., in a race to win doctors over to their competing arthritis
medicines before they hit the market next year, presented
research showing the experimental drugs are effective and
relatively free of side effects.
Monsanto's drug, Celebrex, is closer to winning U.S.
approval. It could be on the market by early 1999, giving it a
head start on Merck. Merck's drug, though, is taken just once a
day, while Monsanto's is taken twice. That advantage could help
Merck, the world's largest drugmaker, catch up with Monsanto.
At stake is a market for painkillers, estimated at as much
as $8 billion a year. Both companies presented studies today at
the American College of Rheumatology's annual meeting in San
Diego.
''You're looking at a situation where these two drugs will
probably have the majority of that market within a few years,''
said Peter Lipsky, director of the Harold C. Simmons Arthritis
Research Center at the University of Texas Southwestern Medical
Center at Dallas.
Merck rose 1 1/4 to close at 146 13/16. It earlier touched a
record high of 148 5/8. Monsanto rose 3/16 to 39 3/8.
The drugs are known as cyclooxygenase-2 inhibitors,
referring to the enzyme they target. Unlike other painkillers,
the Cox-2 inhibitors, as they are known, do not cause stomach
irritation and bleeding.
No Surprises
The drugs' benefits are well known. Analysts and investors
are following the meeting in San Diego to make sure there are no
unexpected surprises with their development.
''Everyone is here to make sure that what we already know
about the Cox-2s doesn't get refuted and to learn about any other
little tidbits,'' said James Kelly, an analyst with Credit Suisse
First Boston.
Merck's studies compared its drugs to common treatments for
the pain and swelling of arthritis. In a 784-patient study,
Merck's drug Vioxx appeared to work as well as the common
arthritis medicine, diclofenac, for people with osteoarthritis,
the more common form of the disease.
A 736-patient study showed similar results when comparing
Vioxx and diclofenac.
A 1,004-patient study of Monsanto's drug, Celebrex, showed
it compared well to Roche Holding AG's Aleve.
Vioxx and Celebrex are the first of the Cox-2 class of
drugs. These drugs target the compounds in the body linked to
pain and swelling more specifically than do existing painkillers,
such as aspirin and ibuprofen, sold under the brand names Advil
and Motrin.
Avoiding Stomach Problems
The Cox-2 drugs interfere with the production of the enzyme,
cyclooxygensase-2, linked to pain and swelling, without blocking
the action of a related one, cyclooxygenase-1, or Cox-1.
That's important because the Cox-1 enzyme appears to help
protect the stomach from its own acids. Drugs that block both
enzymes, such as ibuprofen, have the side effect of causing
stomach bleeding in some patients after long term use.
The Cox-2 drugs are expected to top $1 billion each in
annuals sales. Some analysts estimate the drugs could top $5
billion combined in sales.
Both Merck and Monsanto need these kinds of projections to
pay off. Merck could lose patent protection by 2001 on four
drugs, which had more than $5 billion in combined 1997 sales.
Vioxx is seen as the only potential blockbuster Merck has
ready to offset some of these losses, although the Whitehouse
Station, New Jersey-based company also is working a new
antidepressant that may have fewer side effects than some
existing drugs such as SmithKline Beecham Plc's Paxil.
The success of Vioxx could help Merck Chief Executive
Raymond Gilmartin's plan to face the patent expirations without
seeking a merger, a strategy rival drugmakers have tried when
facing the loss of top-selling products.
For Monsanto, Celebrex is seen as the product needed to
reverse a decline in profits for one of the world's largest
agricultural biotechnology companies. Monsanto's annual per-share
earnings aren't expected to rise again until 2000, according to
the average estimates of analysts polled by First Call Corp.
Monsanto, led by Chief Executive Robert Shapiro, has
invested $8 billion in acquiring seed and technology companies
over the past two years. St. Louis-based Monsanto last month
ended a planned $35 million merger with American Home Products.
Investors had favored the combination because of the resources it
would have given Monsanto.
--Jim Finkle in San Diego and Kerry Dooley in Washington through
news.com
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