Eli Lilly Wins OK for New Depression Drug

Eli Lilly & Co. on Wednesday said U.S. regulators have approved its new antidepressant, Cymbalta, a drug that analysts say will be central to the company’s growth.

Eli Lilly & Co. on Wednesday said U.S. regulators have approved its new antidepressant, Cymbalta, a drug that analysts say will be central to the company’s growth.The U.S. Food and Drug Administration found the highly anticipated drug is both safe and effective in treating major depression, the company said.Industry analysts expect Cymbalta to generate peak annual sales of about $2 billion, a much-needed boon for Lilly after sales of its former top-selling antidepressant, Prozac, plummeted in the face of generic competition.”This will help ensure that Lilly continues to have double-digit sales growth” said David Moskowitz, an analyst at Friedman, Billings, Ramsey. Shares of Lilly rose 1.2 percent.Analysts said Cymbalta will be especially important to Lilly if it loses an expected ruling this summer from a federal judge on the validity of the patent on its blockbuster schizophrenia drug, Zyprexa.Although they expect Lilly to prevail in the court battle, a defeat would allow cheaper generic forms of Zyprexa to be marketed.Lilly in 2003 had total revenue of $12.5 billion, with Zyprexa contributing $4.3 billion.Cymbalta works by maximizing the presence in the brain of two chemicals, serotonin and norepinephrine. That makes it similar to Wyeth’s Effexor. Drugs like Prozac, Pfizer Inc.’s Zoloft and GlaxoSmithKline Plc’s Paxil, known as SSRIs maximize the presence only of serotonin.Increasingly, psychiatrists have been turning to dual-action Effexor as front-line treatment, said Patrick McGrath, research psychiatrist at New York State Psychiatric Institute. Previously it was used if a patient failed to respond to other medications.Where Cymbalta may have an advantage over Effexor is that it appears to increase levels of norepinephrine at lower doses than Effexor, he said. And it may help more to reduce pain associated with depression.”I don’t think any of us think Cymbalta is going to be an earthshaking breakthrough,” he said. “But theoretically it has a potential advantage over Effexor,” he said.The drug will have an average wholesale price of $2.85 a pill, similar to the price of Effexor, which has annual sales of about $3 billion.The dual mechanism drugs are also likely to stand up against competition even from generic versions of SSRIs, analysts said.Generic forms of Paxil were recently launched in the United States, and generic forms of Zoloft and Forest Laboratories’ Celexa are expected to be launched by 2006.”The dual mechanism affords greater remission and will increasingly take share from SSRIs,” said John Boris, an analyst at Harris Nesbitt who holds Eli Lilly stock.Cymbalta comes to the market at a time of growing concern that antidepressants may increase the risk of suicidal thoughts and behavior in some people, especially the young. A 19-year-old college student involved in one of the Cymbalta trials committed suicide, though she was not depressed at the beginning of the trial.Eli Lilly is also studying Cymbalta as a treatment for neuropathic pain, or pain caused by damage in the nerves, in diabetics.Lilly’s shares rose 68 cents to $63.90 in afternoon trading on the New York Stock Exchange. Shares of Wyeth fell 18 cents to $35.20. (Source: Reuters, August 2004)