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Biotech / Medical : wla(warner lambert) -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (430)	1/20/1999 9:02:00 AM
From: Anthony Wong	Read Replies (1) \| Respond to of 942

Warner-Lambert Falls for 2nd Day on Rezulin Setbacks (Update2) Bloomberg News January 19, 1999, 4:27 p.m. ET Warner-Lambert Falls for 2nd Day on Rezulin Setbacks (Update2) (Closing market activity) Washington, Jan. 19 (Bloomberg) -- Warner-Lambert Co. shares fell for a second day, after a Salomon Smith Barney analyst lowered her rating on the company as its Rezulin diabetes pill faces a safety review and new competition. The setbacks could halt Rezulin sales growth, so the company needs to convince investors that one of its drugs in late-stage development has the potential to be a blockbuster, Salomon Smith Barney analyst Christina Heuer said in a report. She lowered her rating on Warner-Lambert today to ''outperform'' from a ''buy.'' Shares in the Morris Plains, New Jersey-based drugmaker fell 3 1/16 to 66 3/4 today. Shares slid 1 5/16 on Friday after Warner- Lambert announced a U.S. Food and Drug Administration advisory committee review for Rezulin, which has been tied to liver damage and more than 30 deaths. Japan's Takeda Chemical Industries Ltd said yesterday it filed its application to sell a rival diabetes pill, joining SmithKline Beecham Plc on the list of potential competitors to Rezulin. If it is approved, Takeda will sell its Actos drug with Eli Lilly & Co. SmithKline, the world's No. 9 drugmaker, in December applied for European approval of its Avandia drug, which may generate $1.8 billion in annual sales by 2005, according to Merrill Lynch & Co. forecasts. SmithKline Beecham shares rose 3 7/8 to 73 1/2. Lilly shares fell 1 5/16 to 79 15/16. Rezulin Sales Rezulin had 1998 sales of $700 million. The diabetes drug, along with the cholesterol reducer Lipitor, turned Warner-Lambert from one of the least-successful U.S. drugmakers into an industry leader. Lipitor could have 1998 sales of more than $2 billion, analysts have estimated. Warner-Lambert's third-quarter profit rose 49 percent to $295.5 million, or 35 cents a share, on Rezulin and Lipitor sales. Now, ''only Lipitor is free of issues,'' said Heuer. The FDA review, along with Warner-Lambert's decision to scale back studies on using the drug in a wider range of patients, could hamper Rezulin's growth, even as competitors near the market with potentially safer diabetes pills, analysts said. ''I don't think it is ever going to become a multibillion- dollar drug,'' said Hemant Shah, an independent analyst who follows the pharmaceutical industry. If the FDA decides these new diabetes drugs are needed urgently, the agency could give them an expedited review -- meaning Rezulin could face serious challengers as early as the end of 1999, analysts said. Rezulin was invented by Japan's Sankyo Co. and licensed to Warner-Lambert in the U.S. and Glaxo Wellcome Plc in Europe. Glaxo halted sales of its version of the drug last year in the U.K after at least five people died. Glaxo declined comment today except to say it is ''in the process'' of seeking U.K. approval to begin selling the drug again. --Kristin Reed in Washington (202) 624-1858 /mfr news.com