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Biotech / Medical : Eli Lilly -- Ignore unavailable to you. Want to Upgrade?

To: Bull-like who wrote (436)	12/7/1998 3:09:00 PM
From: Epicenter	Read Replies (1) \| Respond to of 642

I am a new SI Member so I am giving it a try. Lilly's strategy makes a lot of sense to me for both the ICOS' Viagra follow-up as well as Sepracor's Prozac follow-up. The key question is what is the market going to look when these f/u hit the market. How well will IC531 compete against Viagra? How well will Separacor's Prozac f/u compete with all of the SSRI's that will be on the market by then? I am not sure if the Street has done all of the homework yet. Epicenter

To: Bull-like who wrote (436)	12/7/1998 8:58:00 PM
From: Anthony Wong	Respond to of 642

12/07 16:04 FOCUS-Lilly sets deal to reformulate, protect Prozac (Adds analysts' quotes, background; updates stocks) By Kevin Drawbaugh CHICAGO, Dec 7 (Reuters) - Drug maker Eli Lilly & Co. Inc., moving to shield Prozac from competition from generic drug makers, said Monday it struck a deal with Sepracor Inc. for a reformulated version of the blockbuster antidepressant. Sepracor, a small drug firm in Marlborough, Mass., is developing a molecularly altered version of Prozac that may reduce potential side effects and qualify the new drug for separate patent protection. In exchange for exclusive worldwide rights to the new compound, called R-fluoxetine, Lilly, based in Indianapolis, said it will pay Sepracor $20 million, plus $70 million in later payments based on its progress in developing it. If the compound makes it to market, possibly by 2002, Sepracor would get royalties from sales. But more importantly, Lilly could extend the exclusive patent on its most successful drug by a decade or more, industry analysts said. "This really shows how the number of tools that drug companies have to mitigate the impact of patent expirations is expanding every day," said Jim Flynn at investment bank and brokerage ING Baring Furman Selz. Prozac, the second-biggest selling prescription drug in America, generated nearly a third of Lilly's revenues of $7.2 billion in the first nine months of 1998. It has been the company's lead product since shortly after its 1987 debut. Domestic sales of Prozac totaled $1.6 billion over the nine months, trailing Prilosec, a stomach ulcer medicine from Sweden's Astra AB, which had sales of $2.1 billion. Two other antidepressants -- Zoloft from Pfizer Inc. and Paxil from SmithKline Beecham Plc -- are also among the biggest-selling drugs in the nation. "It shows how we have succumbed to the greatest marketing campaign of all time, which is that psychological and social problems can be dealt with by drugging ourselves," said Dr. Peter Breggin, director of the Center for the Study of Psychiatry in Bethesda, Md., and a long-time Prozac critic. "It's a testimonial to the power of biological psychiatry in combination with the drug companies," Breggin said. For some time, Wall Street has fretted about Lilly's future after Prozac. The drug's patent, which prohibits others from manufacturing it, expires in two stages in 2001 and 2003. That timetable may change, analysts said, depending on the outcome of a patent lawsuit scheduled to come to trial in late January in Indianapolis. Generic drug maker Barr Laboratories Inc. of Pomona, N.Y., is challenging Prozac's patents. Regardless of the trial's outcome, Lilly has rolled out new drugs in expectation of eventually seeing a decline in Prozac sales. Some, such as Zyprexa for schizophrenia and ReoPro for coronary blood clots, have been winners. Another, Evista for osteoporosis, has been disappointing, analysts said. "The only way in which the (Sepracor) deal would have major significance to Lilly would be in the unlikely event that the company loses the patent suit to (Barr)," said James Keeney at brokerage ABN AMRO. Sepracor's stock fell $3.125 to $84.875 on Nasdaq, while Lilly added 87.5 cents to $86.81 on the New York Stock Exchange. Sepracor said Oct. 14 that it started a Phase I clinical trial with R-fluoxetine. <BRL.N> <SEPR.O> <LLY.N> <PFE.N> SB.L> (Chicago Equities News, 312 408-8787, chicago.equities.newsroom@reuters.com)