Copyright 2000 The Buffalo News
The Buffalo News
August 10, 2000, Thursday, FINAL EDITION
SECTION: BUSINESS, Pg. 4E
LENGTH: 422 words
HEADLINE:
ELI LILLY LOSES PROZAC PATENT PROTECTION;
STOCK RECOVERS A
BIT TODAY AFTER DROPPING 29% WEDNESDAY
BYLINE: From
News Wire Services
DATELINE: NEW YORK
BODY:
The stock of Eli Lilly & Co.
tumbled 29 percent Wednesday, erasing $ 35 billion in market value, after a
court ruling cleared the way for a rival to sell a generic version of Lilly's
blockbuster Prozac antidepressant within a year.
This morning, Eli Lilly
stock rose $ 1.38 to $ 78.07 on the New York Stock Exchange after having tumbled
$ 31.86 Wednesday.
Prozac provides about a quarter of Lilly's revenues,
and the company had hoped to keep its patent alive until the
end of 2003.
The ruling by the U.S. Court of Appeals in Washington,
D.C., overturned a district court and was a victory for generic drugmaker Barr
Laboratories Inc., which has battled Lilly over its Prozac
patent since 1996.
The Pomona, N.Y.-based Barr said the
court ruling should clear the way for it to make a generic Prozac by February
2001. But Lilly is expected to apply for, and receive, a six-month
extension by agreeing to test the drug in
children, meaning the earliest Barr's generic version could appear on the market
is August 2001.
Bruce L. Downey, Barr's chairman and chief executive,
promised the generic version of Prozac will be substantially cheaper than the
brand-name version, but he refused to provide details.
Typically,
generics are at least half the price of brand-name equivalents; that usually
results in brand-name drugs losing about 80 percent of their
sales within two years.
Barr stock rose $ 31.25, or 68 percent, to $ 77
on the NYSE.
While sales of Prozac have been declining in the past year
due to increased competition, the pill still had $ 2.61 billion in sales in
1999, about $ 2 billion of which was in the United States.
Lilly plans
to appeal, but unless it wins, Lilly executives said earnings will decline
significantly in the second half of next year and in 2002.
The
Indianapolis-based company is now predicting single-digit earnings growth over
the next two years, down from the 14 percent some Wall Street analysts had been
forecasting.
Until Wednesday, Lilly had been one of the best performing
pharmaceutical manufacturers in 2000. Its stock price had soared 65 percent this
year on positive news about its sepsis drug, Zovant, and Wall
Street's growing confidence the company was managing its Prozac
patent issues.
Also Wednesday, shares of Sepracor Inc.,
which is working with Lilly on an improved version of Prozac, fell $ 23.38 to $
106.13. Shares of Forest Laboratories Inc., which makes an antidepressant,
Celexa, that already competes with Prozac, fell $ 25.55 to $ 88.94.
GRAPHIC: Associated Press; Brokers crowd the New York
Stock Exchange post where Eli Lilly stock is traded after the company lost a key
patent case Wednesday.
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August 14, 2000 
