Copyright 2000 The Houston Chronicle Publishing Company
The Houston Chronicle
August 10, 2000, Thursday 3 STAR EDITION
SECTION: BUSINESS; Pg. 2
LENGTH: 430 words
HEADLINE:
Eli Lilly shareholders grab the Prozac ;
Ruling stripping antidepressant's
patent protection sends stock reeling
SOURCE: Houston Chronicle News Services
DATELINE: NEW YORK
BODY:
NEW YORK - A federal court on Wednesday scuttled Eli Lilly and Co.'s hopes
of extending the patent protection on its blockbuster
antidepressant Prozac through 2003. As a result, Prozac could face generic
competition as early as next August.
The ruling is good news for
consumers, who will be able to buy a cheaper version of Prozac two years earlier
than expected.
However, the decision is a blow to Indianapolis-based
Lilly, which counts on Prozac for about a quarter of its total sales. Shares of
Lilly fell $ 31.67, or 29 percent, to $ 76.88 in New York Stock Exchange trading
on Wednesday.
The ruling was a victory for generic drug
maker Barr Laboratories, which has battled Lilly over its Prozac
patent since 1996. The ruling, which Lilly said it would
appeal, means Barr Laboratories may be able to introduce its generic Prozac
sooner than expected, and a year before Lilly introduces an improved version of
the original drug that it is developing with Sepracor. Prozac
had 1999 sales of $ 2.6 billion, accounting for a quarter of Lilly's sales last
year.
The Pomona, N.Y.-based company said the ruling should clear the
way for it to make a generic Prozac by February 2001. However, 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.
Barr stock rose $
30.25, or 66 percent, to $ 76 on the NYSE.
Shares of Sepracor, based in
Marlborough, Mass., fell $ 23.37 to $ 106.13. Shares of New York-based Forest
Laboratories, which makes the antidepressant Celexa, which already competes with
Prozac, fell $ 24.98 to $ 89.50.
Forest has been stepping up its
marketing efforts on Celexa, its biggest-selling drug, by
adding sales personnel, and analysts said shares fell on concern the Lilly
decision could hurt Celexa sales.
Revenues from Celexa, which has been
taking market share from Prozac, rose to $ 149.9 million in the fiscal first
quarter ended June 30 from $ 77.5 million in the year-earlier period, Forest
said last month.
The U.S. Court of Appeals for the Federal Circuit in
Washington reversed a lower court's decision supporting Prozac
patent protection through 2003. Lilly said it plans to appeal
the most recent decision. The U.S. Court of Appeals has nationwide authority
over patent cases, and its decisions are rarely reversed.
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.
LOAD-DATE: November 21, 2000 
