Marks Electrical Share Discussion Threads

[ariane] 22/12/2006 08:17

Actelion "overweight," target price raised

Tuesday, December 19, 2006 5:04:19 AM ET
J.P. Morgan Securities

LONDON, December 19 (newratings.com) - Analyst Annie J Cheng of JP Morgan maintains her "overweight" rating on Actelion Ltd (ACT.ETR), while raising her estimates for the company. The target price has been raised from CHF265 to CHF300.

In a research note published this morning, the analyst mentions that the EARLY study indicates that Tracleer provides clinical benefits to PAH patients who suffer from a less severe form of the disease. This positive data would help Tracleer defend itself better against competition, particularly from Gilead's ambrisentan, the analyst says. The EPS estimate for 2008 has been raised from CHF10.92 to CHF12.12 to reflect the addition of 2.5 percentage points of new patient shares to Tracleer's estimates. The EPS estimate for 2009 has been raised from CHF10.89 to CHF12.45.

[ariane] 30/11/2006 07:22

Thailand breaks patent on Merck's AIDS drug, announces compulsory licensing

BANGKOK (XFN-ASIA) - Local and international AIDS activists praised
Thailand's military-backed government's decision to break the patent on
pharmaceutical giant Merck's high-priced HIV/AIDS drug Efavirenz.
The Thai public health ministry announced yesterday that compulsory
licensing would take effect immediately and will allow access to the lifesaving
drug at a lower price.
"We need to break the patent because the price is too high for the
government to afford it as new AIDS patients increase every year by the tens of
thousands," said Thawat Suntrajarn, director general of the department of
disease control.
Over the past five years, Merck has had exclusive rights to import the drug
for distribution in Thailand.
"After discussions with the Council of State, we agreed that the patent with
Merck provided us a chance to import the drug from other sources. The company
has been informally informed about the decision and they have a chance to
legally challenge us," Thawat told Agence France-Presse.
Medecins San Frontieres (MSF) praised the decision, saying it would improve
access to Efavirenz, a key HIV/AIDS drug.
"Efavirenz is currently patent-protected in Thailand, and the resulting
monopolistic situation is limiting supply and affordability," said David Wilson,
MSF's medical co-ordinator in Thailand.
"The patent holder, Merck, has on several occasions been unable to supply
Efavirenz. This has resulted in treatment interruptions, forcing several
hospitals to supply suboptimal dual therapy," he added.
The licensing will be valid for only five years, but will be able to bring
down the cost of the drug that is needed by many AIDS patients in Thailand but
was previously too expensive.
With the compulsory licensing, the cost for Efavirenz would be cut in half
from the existing 2,500 baht (67 usd) a month to 1,400 baht (38.50 usd), Thawat
said.
The government was considering importing the medicine from India where three
factories produce the drug, he added.
The Thai government is also developing its own generic production capacity
for Efavirenz which is expected to be ready in 2007.
afp/nui/str/gs/lh/km

[waldron] 25/11/2006 08:31

Market Scan
Novartis' Recent Selloff Seen As Buying Opportunity
Peter Kang, 11.24.06, 4:00 PM ET


The recent sell-off in shares of Swiss drugmaker Novartis following a delay in approval of experimental diabetes drug Galvus makes for an "attractive entry point" for investors, according to research firm Bear Stearns.

Novartis shares have declined about 6% since Nov. 7, Bear Stearns noted, following news of a delay by the U.S. Food and Drug Administration for Galvus, as well as the Democratic sweep of the congressional elections.

"In our view, this seems excessive as we estimate Novartis offers the second fastest five-year earnings growth in the sector after Roche and we expect several positive catalysts by the end of the year including the approval of Tekturna and Exforge," wrote analyst Alexandra Hauber in a client report.

Tekturna and Exforge are both treatments for high blood pressure.

The analyst said threats to U.S. drug pricing due to the election is likely to be limited but even so, Novartis has product differentiation and strong volume growth which would allow the company to withstand any potential drop in pricing.

Hauber pointed to the upcoming research and development meeting Novartis will host with investors and analysts on Nov. 28 as a potential catalyst.

"We expect the upcoming R&D day to showcase the breadth of Novartis' phase II/III pipeline," the analyst said. "Although Galvus' approval is not without risk, we think in the absence of any skin lesions in humans, the FDA will approve the product in February 2007."

The Bear Stearns analyst reiterated an "outperform" rating on the stock. Galvus is expected to compete with Merck's Januvia, which was approved by the FDA in mid-October.

[grupo guitarlumber] 20/11/2006 06:54

Merck looks for ancient Chinese cancer cure
By Susie Mesure
Published: 20 November 2006
The German drugs giant Merck is seeking help from the world of traditional Chinese medicine to find a cure for cancer. The Chinese medicine company spun out of Hong Kong's Hutchison Whampoa, Chi-Med, will today unveil a potentially lucrative deal to research oncology on behalf of the German group.

Merck will pay Chi-Med to raid centuries of Chinese medical knowhow in search of a natural cancer-fighting product that it can turn into a marketable Western drug.

The financial terms of the deal were not disclosed, but Chi-Med stands to reap tens of millions of pounds from the partnership if it comes up with a drug that is suitable to be put into trial.

Western pharmaceutical companies are increasingly outsourcing their drug discovery work, with many looking east for the solution to medical mysteries that Western doctors cannot solve.

Ulrich Betz, Merck's head of strategic innovation and research, said the partnership would allow the group to "extend its interaction with the emerging Chinese pharmaceutical industry".

Chi-Med raised £40m from listing on AIM in May. It is based in Shanghai, and controlled by the Hong Kong billionaire La Ka-Shing's Hutchison conglomerate. It has a library of 10,000 natural substances, many of which have been used for centuries, which it is scanning for medical potential.

The company has already brought two drugs into US phase II clinical studies in the oncology and auto-immune areas. One is a drug to enhance radiotherapy for cancer patients. Another drug in trial is an oral treatment traditionally used for respiratory infections and modified to treat Crohn's disease and ulcerative colitis.

The Chinese company recently struck a deal with Proctor & Gamble to screen its collection of plant extracts for possible use in the consumer giant's beauty care products.

In the UK, Chi-Med has its own chain, Sen, which sells skincare products, with outlets in high-profile shopping areas such as London's South Molton Street and the upmarket department store Harvey Nichols. It also has a retail chain in China, which had a turnover of $31m (£16.3m) in the first half of the year. The company made a $3.1m loss in the six months to 30 June compared with a $2.75m loss last year.

[ariane] 12/3/2006 06:23

March 12, 2006


Astra Zeneca faces $4.5bn payout to rival
Paul Durman



ASTRA ZENECA, the British pharmaceuticals group, will in two years' time have to pay an estimated $4.5 billion (£2.6 billion) to its American rival Merck, it is expected to tell investors this week.
The payment to Merck stems from the partial unwinding of a long-standing royalty agreement between the two companies, dating back to 1998.



The American company is currently receiving royalties from many of Astra Zeneca's best-selling medicines, which include Nexium for heartburn and ulcers, Symbicort for asthma and Toprol-XL, a beta-blocker heart treatment.

Under the terms of the agreement, the British company is required in 2008 to buy out Merck's financial interest in a group of products that includes Toprol-XL and Symbicort.

Merck also has an option that would allow it to force Astra Zeneca to buy its interest in another group of medicines. These include the heart drugs Atacand and Plendil, as well as the recently withdrawn blood-thinning agent, Exanta.

The precise amount that Astra Zeneca will have to pay will depend on product sales over the period from 2005 to 2007.

However, based on current forecasts, Graham Parry, an analyst at Merrill Lynch, has estimated that Astra Zeneca will have to pay $4.5 billion to Merck. The amount could rise to $4.7 billion if it exercises its option over Atacand, Plendil and Exanta.

Although Astra Zeneca could comfortably afford these large payments, Parry believes the company's reported earnings could fall by about 5%.

However, the impact on the company's cashflow looks likely to be more modest. Most of the dilution of reported earnings will be because of the amortisation of goodwill, an accounting adjustment that does not affect cash.

One of the many factors that could affect the size of the eventual payment is the current threat to sales of Toprol-XL.

In January, an American court ruled the drug's patents were invalid and unenforceable, a judgment which, if it stands, could open the door to cheap generic competition.

Merck's most valuable interest in Astra Zeneca's sales is covered by the so-called second option.

This relates to Nexium and its closely related predecessor, Prilosec, and cannot be exercised until 2010 at the earliest.

Sales of Nexium reached $4.6 billion last year, while Prilosec generated $1.6 billion even though it has lost patent protection.

Martin Hall, an analyst at Eden Group, said Prilosec and Nexium had generated $69.2 billion of sales since the original product was launched in 1988 - making it the biggest-selling pharmaceutical of all time.

The second option would allow Astra Zeneca to repurchase Merck's interest in these blockbuster drugs, but it would have to pay the net present value of future royalty payments.

With annual royalty payments currently estimated at about $800m, Hall believes it would cost Astra Zeneca many billions of dollars to buy out Merck's rights.

[waldron] 03/3/2006 07:20

Actelion Shr Price Reaction Overdone -ZKB

Thursday, March 02, 2006 2:01:38 PM ET
Dow Jones Newswires



1749 GMT [Dow Jones]--Actelion's (ATLN.EB) share price reaction, closing -5.4% at CHF108.10, was overdone after US FDA asked for a labeling change of its flagship drug Tracleer to include info on possible liver damage, says Zuercher Kantonalbank analyst Hernani de Faria. Adds that from the beginning, it was known that the drug could raise liver enzyme levels, hurting the liver's functioning and thus, a monthly monitoring was already required. Keeps at market-overweight rating. (SWZ)

[waldron] 27/2/2006 12:07

Actelion "hold," target price reduced

Monday, February 27, 2006 2:04:20 AM ET
Canaccord Adams

LONDON, February 27 (newratings.com) - Analysts at Canaccord Adams maintain their "hold" rating on Actelion (ACT.ETR). The target price has been reduced from CHF128 to CHF126.

In a research note published on February 24, the analysts mention that the company has reported its FY05 results in-line with the estimates. Actelion's marketing/advertising costs rose 40% during the year and the company expects its cost base to expand further during 2006.

[waldron] 24/2/2006 10:42

Credit Suisse Cuts Actelion Target To CHF140

Friday, February 24, 2006 5:30:01 AM ET
Dow Jones Newswires



0908 GMT [Dow Jones] Credit Suisse cuts Actelion's (ATLN.EB) target price to CHF140 from CHF160, as higher-than-expected marketing and advertising costs are seen hitting net income going forward. Higher spending is a sign the company will further leverage its flagship drug Tracleer's considerable leading position, with the rival drug Thelin from Encysive (ENCY) expected US launch in April. Competitive newsflow, however, is likely "to cap the near-term performance of the stock." Keeps at outperform. Shares trade +0.4% at CHF117.70. (SWZ

[ariane] 18/2/2006 17:22

'Safer' sleep drug holds new hope of a good night's rest
LYNDSAY MOSS

A NEW type of sleeping pill that increases dreaming and boosts memory could soon be available, researchers said yesterday.

The new drug, being developed by biotech company Actelion, may also lack some of the more worrying side-effects of traditional sleeping tablets, such as addiction.


The developers believe the medicine could be on the market by 2012 if trials continue to show positive results. It is believed that only 10 per cent of an estimated 20-30 per cent of the population who suffer from insomnia use medication to try to tackle the problem.

In many cases this is because they worry about the side-effects, such as feeling tired during the day, as well as becoming addicted.

The new drug targets the hormone orexin, which is also linked with feeding and addiction. Experts believe a drug targeting this system could also be used in treatments for obesity and addiction, according to Chemistry and Industry magazine.

Orexin is also linked to narcolepsy - a sleeping disorder that causes people to fall asleep several times a day.

Initial tests in rats suggest the drug works differently to other sleeping aids.

Jean Paul Clozel, chief executive of Actelion, said: "The problem with most older medication is people often feel tired and unwell, and memory is affected."

But in the lab tests, rats given the drug slept soundly and performed better in maze tests the following day compared with rats given conventional sleeping drugs.

When the scientists measured muscle tone and brain activity, this also revealed that the "dream phase" of sleep, also known as REM, was increased.

This article:

Last updated: 06-Feb-06 10:23 GMT

[grupo guitarlumber] 13/12/2005 11:52

Vontobel Ups Actelion To Outperform

Tuesday, December 13, 2005 5:53:10 AM ET
Dow Jones Newswires



0933 GMT [Dow Jones]--Vontobel upgrades Actelion (ATLN.EB) to outperform, from sector perform, following Monday's strong price correction which leaves around 25% upside. Sees fair value at CHF132 from Tracleer in pulmonary artery hypertension stand-alone, which it had previously seen at CHF153. "We anticipate Actelion will publish strong FY '05 and 1Q '06 results," analyst says. Shares +0.8% at CHF106.50. (HJS)

[waldron] 29/11/2005 08:12

UBS Cuts Actelion Target After Negative Test

Tuesday, November 29, 2005 3:01:57 AM ET
Dow Jones Newswires



0654 GMT [Dow Jones] UBS cuts its target for Actelion (ATLN.EB) to CH150 from CHF170 after a test of Tracleer shows no statistically significant benefit in pulmonary fibrosis. Says there are some points of light; the non-statistically significant trend to mortality benefit could result in significant off-label use for idiopathic pulmonary fibrosis, UBS says. Keeps buy rating. Shares closed at CHF127.40. (HJS)

[Abuse team] 04/11/2005 03:29

Post removed by ADVFN

[hamsterape] 04/11/2005 02:17

What? No comment on yesterday's breakthrough news, or are you all still typing?

[waldron] 23/10/2005 08:51

In sickness and wealth: drugs firms on trial
Millions owe their lives to their products. So how did their reputation come to fall so low?
By Abigail Townsend
Published: 23 October 2005
There can be few industries that stir up as much emotion as the pharmaceutical sector. The UK is a leading player, with three FTSE 100 giants - GlaxoSmithKline, AstraZeneca (both of which have third-quarter results out this week) and Shire Pharmaceuticals - together worth £128bn. Every day, £9m is poured into research and development: thousands work in the industry, the Government loves it, shareholders have raked in returns and diseases have been treated.

And yet the industry's reputation is in tatters. In recent months rows have raged about controversial treatments, from breast cancer drugs to vaccines for bird flu, while the sector has for some time now been accused of sins ranging from skewing the results of clinical trials to putting drugs out of the reach of the poor.

So it is little wonder that many hate drug companies - though, as one analyst wryly notes, only until they get ill. Here The Independent on Sunday looks at both sides of the argument consuming one of the world's most talked-about industries.

Case for the defence

The biggest argument pharmaceutical companies have in their favour is that they make products that not only save lives but have changed the very way we live our lives.

And the industry believes that in this healthier day and age we have lost sight of this. "We have got to educate people as to how this all works," says an insider at GSK. "Not everything is certain and there's a lot of money spent on products that don't make it. But if you do get something on the market, it will be good and it will help millions."

The number of new breakthrough treatments may have slowed but they are by no means behind us. In the 1980s, HIV often led quickly to Aids as there was no way to delay the onset. Now, antiretroviral drugs mean that people with HIV live long, healthy lives. And only this month, Merck unveiled a vaccine for one of the most common forms of cervical cancer, a disease that kills thousands and can leave women unable to have children.

This sort of drug development does not come overnight, or cheap. According to the Association of the British Pharmaceutical Industry (ABPI), the average cost of developing a drug is £550m and it takes 10 to 12 years. Patents, ensuring that no one else can steal all that hard work and knock out cheap copies, last for 20 years - but minus the period spent in development. And if the drug is not a blockbuster, that is scant time in which to cover costs and turn in a profit for shareholders.

Prices for the finished product are also controlled in Western Europe. In the UK, the Pharmaceutical Price Regulation Scheme (PPRS) limits the amount of profit companies can make on sales to the National Health Service. "It's about trying to ensure that the NHS gets medicines at reasonable prices and that the industry gets a fair and reasonable return so it can continue its research into new medicines," explains an ABPI spokesman. "Over a period of time it has meant that the UK has retained a successful research industry while others have lost out. In detail it is arcane but in general it works."

And despite the high costs and risk, research and development is what the industry does best. In the UK, three-quarters of drugs R&D is done by the industry. The rest is carried out by academics, charities, the Medical Research Council (MRC) and the NHS. But a large proportion of that focuses on the actual illnesses rather than finding cures.

Industry is the only body willing to take on the risk, so it is little surprise it expects, at some stage, a healthy return for its pains. As the ABPI spokesman points out, Russia nationalised its R&D function under Communist rule with disastrous results. "In all that time, they came up with one major drug, and nobody can ever remember what it was."

Headlines are full of products that have been through R&D, including clinical trials, and were approved by regulators, only for subsequent side effects to cause the drug to be pulled. But clinical trials, as a matter of scientific course, focus on groups of between 4,000 and 6,000 people. So, for example, a side effect that occurs in one in 10,000 people is unlikely to be discovered.

The industry is not entirely impervious to its reputation, however, and efforts have been made to address it. The ABPI has reviewed the way companies promote and market their products, and has also compiled a global database of clinical trials. Other moves, claim industry experts, include the regulator, the Medicines and Healthcare products Regulatory Agency (MHRA), accepting it needs to be seen to be free of industry influence, and pharmaceutical companies supplying drugs at a cost to poor nations.

Things are also improving on the stock market, and this week's third-quarter numbers from GSK and AstraZeneca are likely to show growth in both volumes and margins, as costs are cut. For all the hype, the drugs, it would seem, really can work.

The case against them

"We have unrealistic expectations of medicine. We're consumed about ideas of our own mortality. The motives, interests and modus operandi [of the pharmaceutical companies] encourage us to believe that drugs are in some sense a route to salvation. They have totally exaggerated the benefits of their products." So argues Charles Medawar, one of the staunchest critics of the industry. He is a director of Social Audit, a charity that is part of the Public Interest Research Centre and has carried out investigations into the growing use of antidepressants. He is not a lone voice. Many, from the man on the street to authorities such as Richard Horton, editor of The Lancet, are growing increasingly, and vocally, disenchanted with the pharmaceutical business.

It is accused of being too powerful, of not being properly controlled, of stifling independent debate and having little transparency. Clinical trials, opponents claim, are flawed but hard marketing ensures doubts are swept under the carpet.

Critics also claim that profits are put before everything, meaning that drugs are overpriced and HIV sufferers in Africa go without. The World Health Organisation wants three million people in developing countries to be on Aids drugs by the end of this year and, after growing public pressure, the companies now sell drugs to African countries at cost. But that is still expensive and they refuse to provide free drugs because they are worried they will be sold on. "They are trying to make themselves look like benefactors by selling at low prices," says Tony Harrison, a senior researcher at the King's Fund health think-tank. "But the companies have got to make money. They will never be free because of the risks of undercutting their own markets in other areas through exports."

The industry's involvement in Africa and the HIV/Aids crisis has been suspect from the start. The pharmaceutical companies caused outrage when they took the South African government to court to try to stop it importing cheaper, and desperately needed, generic copies of HIV and Aids drugs.

And only last week, as the world worried about a possible flu pandemic, Roche's shares soared as investors calculated how much money the company would make from its vaccine Tamiflu (although the company has now agreed to license the drug to generic rivals as demand soars).

Cancer patients, meanwhile, end up in court as they fight to receive the best - but expensive - treatments, as witnessed in the row over the breast cancer drug Herceptin.

The treatments themselves are often just as controversial. A US court recently found against Merck in a case arising from the death of a patient taking Vioxx, its blockbuster painkiller, which has been shown to increase the risk of heart attacks and strokes. During the case, which Merck plans to appeal, documents were produced that appeared to prove the company had deliberately hidden its own concerns about the treatment. The whole issue was brought to light only after a whistleblower at the US Food and Drug Administration went public last year and revealed his concerns.

"The industry has produced some great products, but in the past it has behaved atrociously," says Mr Harrison. "The trend now seems to be turning. There seems to be a general recognition that it has got away with too much. However, it's still not a fundamental change." He believes the Government should be more involved to ensure unprofitable areas of research are not neglected. "The public sector has got to play a bigger role, making sure the gaps the industry will never look at are filled. It must pay, or provide incentives."

Campaigners also want the industry - powerful yet, for many, unaccountable - to clean up its act. That includes publishing the data of ongoing clinical trials and putting less emphasis on profits. "The starting point has to be complete transparency," says Dr Medawar. "The industry is, frankly, running riot. It's like the 19th-century chemical industry in externalised costs: shove the pollution up the chimney and not give a damn about who lives downwind."

Nor is the situation good for investors. Robin Gilbert, an analyst at Numis Securities, says: "Drugs companies globally have been struggling and stock prices have not performed well. They are spending huge sums on research, but are not generating new products."

Generic companies, meanwhile, have gone from strength to strength as governments get tough on prices. Two of the UK's biggest pharmacies, Boots and Alliance UniChem, are set to merge and one of their strategies is to distribute generic drugs across Europe. And in the US the FDA is taking a tougher stance, and lawyers are scenting courtroom success.

Dr Medawar sums up the industry's predicament. "It is a victim of its own success. It has raised expectations extremely high, because in the past 50 years it has produced a few dozen really good drugs. But now [companies] are so big, so influential, so powerful, that they don't have qualitative and quantitative feedback that allows them to see where they are going wrong."

Investors can be won over by the hope of strong sales or a promising pipeline. Yet few others are so easily convinced - and the sector has a mountain to climb to achieve a reputation it can be proud of.

Big Pharma and its Blockbusters

The world's top 10 pharmaceutical companies, listed according to their market value

Pfizer, US, $161bn

Viagra (erectile dysfunction), Celebrex (painkiller), Lipitor (cholesterol lowering), Zoloft (antidepressant)

GlaxoSmithKline, UK, $147bn

Advair (asthma), Paxil CR (antidepressant), Combivir (HIV)

Novartis, Switzerland, $146bn

Diovan (hypertension), Gleevec (cancer)

Roche, Switzerland, $127bn

Tamiflu (influenza), Avastin (colon cancer), Mabthera (lymphoma), Heceptin (breast cancer)

Sanofi-Aventis, France, $114bn

Lovenox (deep vein thrombosis), Plavix (thrombosis), Avapro (hypertension), Ambien (insomnia)

AstraZeneca, UK, $74bn

Crestor (cholesterol lowering), Nexium (ulcers)

Wyeth, US, $62bn

Effexor (antidepressant), Prevnar (meningitis), Enbrel (arthritis)

Merck, US, $59bn

Gardasil (cervical cancer vaccine, to be launched), Zocor (cholesterol lowering), Vioxx (painkiller, withdrawn but FDA to review)

Eli Lilly, US, $58bn

Prozac (antidepressant), Zyprexa (schizophrenia), Gemzar (pancreatic cancer)

Schering-Plough, US, $31bn

Remicade (auto-immune conditions), Clarinex (allergies)

[grupo guitarlumber] 15/10/2005 06:29

October 15, 2005
Lipitor or Generic? Billion-Dollar Battle Looms
By ALEX BERENSON
The Lipitor war is about to begin.

Starting next June, insurers and government agencies will have the opportunity to save billions of dollars by moving patients from Lipitor, a cholesterol-lowering drug by Pfizer that is the world's top-selling medication, to an inexpensive generic version of Zocor, a similar but less potent drug now made by Merck.

Some insurers are already planning ways to move patients from Lipitor to generic cholesterol drugs after Zocor loses its patent protection. But Pfizer, which plans to use marketing muscle and clinical data to fight that migration, says that Lipitor has unique benefits and is worth a premium price, especially for patients at high risk of heart attacks.

Both medicines belong to a class of drugs known as statins, which are the nation's best-selling medications, with almost 150 million prescriptions expected to be filled this year at a cost of $16 billion. The insurers, and some cardiologists, say that switching patients from Lipitor to generic Zocor will be a safe way to cut costs in an era of skyrocketing pharmaceutical prices.

In many cases, they say, patients who now take the most commonly prescribed dosage of Lipitor - 10 milligrams daily - can reduce their cholesterol just as much with Zocor. Lipitor costs $2 or more a day, while generic Zocor will probably cost 35 cents or less.

"If I was taking a statin, I'd want to take the cheapest one, as long as I get to the goal that I wanted to get to," said Dr. Scott Grundy, a researcher who has consulted for both Merck and Pfizer. Dr. Grundy led a federal panel that in 2001 wrote guidelines for treating people with high cholesterol.

But other doctors and epidemiologists say that Lipitor may be the best drug for many patients. "It would not be good medicine to go to a cheaper medicine that has less efficacy in our high-risk patients," said Dr. Robert Vogel, a cardiologist at the University of Maryland, who has been paid by Pfizer to help conduct a clinical trial of Lipitor.

Pfizer says it will fiercely defend Lipitor. "By taking any dose of Lipitor, you will reduce the risk of a cardiovascular event faster and to a greater degree than you will with any other medicine," said J. Patrick Kelly, Pfizer's president of United States pharmaceuticals.

The fight over Lipitor involves a collision of fundamental forces in American health care. Spending on prescription drugs has jumped from $40 billion in 1990 to almost $250 billion this year, and continues to rise faster than overall inflation. But while many Americans say they believe that prescription drugs cost too much, they rarely want to accept generic medicines for themselves instead of more expensive drugs that may be only marginally better - especially since insurers or government agencies pay nearly 70 percent of all drug costs.

Dr. JoAnne Foody, a practicing cardiologist and a professor at Yale University School of Medicine, said she expected to continue prescribing Lipitor for her high-risk patients, who need the maximum possible reduction in cholesterol.

But she said she would be inclined to switch other patients off Lipitor onto generic Zocor, also called simvastatin, if the price difference was significant.

"There are a very large portion of patients where the data for simvastatin are equivalent and sometimes better than the data for Lipitor," Dr. Foody said.

But convincing American patients to give up a brand-name medicine and take a generic drug is not easy, said Albert Rauch, a drug industry analyst at A. G. Edwards, a regional brokerage firm based in St. Louis.

For example, even though the antacid Prilosec is available in an inexpensive over-the-counter form, people prefer three very similar but higher-priced prescription antacids - Prevacid, Nexium and Protonix. Those three will have $10 billion in United States sales this year.

"Therapeutic substitution - substituting one product for another in the same class - just hasn't happened yet," Mr. Rauch said.

And Lipitor has more than Pfizer's marketing dollars working for it. Last month, an analysis of 14 clinical trials by Oxford University and the University of Sydney in Australia found that the more potent the statin and the greater the cholesterol reduction, the lower the risk of heart disease.

Dr. Colin Baigent, who oversaw the analysis, did not directly endorse Lipitor but said he believed that statins were not interchangeable.

"The aim should be to get their LDL cholesterol as low as possible," Dr. Baigent said, referring to low-density lipoprotein, or LDL, cholesterol - commonly called bad cholesterol. "There is potential for many patients benefiting more."

Statins work by interfering with the liver's ability to synthesize LDL cholesterol. All statins are chemically similar, although Lipitor, whose active ingredient is called atorvastatin, is more potent than Zocor, or simvastatin.

The highest dosage of Lipitor (80 milligrams) can reduce cholesterol as much as 57 percent in an average patient, while the highest dosage of simvastatin lowers cholesterol 47 percent. But because most patients are not placed on the highest dosages, the two drugs can achieve comparable cholesterol-lowering results in many cases.

Several large clinical trials have shown that statins reduce the risk of heart attacks and strokes. And statins appear to be safe for most patients, although they can cause muscle weakness in some people and occasionally lead to severe muscle damage.

As a result, statins have become among the most commonly prescribed drugs. This year's forecast of 150 million statin prescriptions in this country is up from 82 million in 1999, according to IMS Health, a Pennsylvania company that compiles data about drug usage.

About half of those prescriptions will be for Lipitor, which is taken by 12 million Americans a year, at a cost of about $8 billion. Worldwide, Lipitor sales are forecast to top $12 billion this year, making the drug by far the best-selling prescription medicine.

Prescription drugs are protected by patents that give their inventors the exclusive right to sell them for up to 20 years, though they usually must spend part of that time gaining federal approval. The patent protection enables the drug maker that discovered the drug to earn back its development costs and make a profit. Otherwise, other companies could make and sell identical versions of the medicine, undercutting the company that invented it.

But when a patent expires, the legal protection disappears. At that point any company can make the drug, as long as it proves to the Food and Drug Administration that its version is identical to the original. The patent on Lipitor is to expire in 2011, but that patent has been challenged.

Zocor will lose its patent protection next June 23, and be opened to competition. Ivax, a generic drug company, has already said it will produce a generic version of the drug, and other companies plan to follow. As more generics enter the market, the price of generic simvastatin could fall to 35 cents a pill or less, compared with $3 or more now, according to Richard T. Evans, a drug industry analyst at Sanford C. Bernstein & Company.

Merck will lose billions of dollars in annual sales and profits when Zocor loses its patent protection. To recoup its profits, Merck has introduced another anticholesterol drug, Vytorin, which combines Zocor with Zetia, a medicine from Schering-Plough that is not a statin but also reduces cholesterol.

Vytorin is about as effective as Lipitor at lowering cholesterol, so both Merck and Pfizer have a stake in convincing doctors and insurers that they should pay extra for the increased potency their drugs offer over generic Zocor. But because Lipitor is so much more popular than Vytorin, Pfizer has more to lose than Merck and Schering-Plough if generic simvastatin becomes a standard treatment.

Last week, Express Scripts, a Missouri company that helps companies design drug benefit plans, said it would drop Lipitor from its list of preferred drugs. Instead, Express Scripts has devised a plan that will offer patients taking generic simvastatin a much lower co-payment on their prescriptions.

Steve Littlejohn, a spokesman for Express Scripts, said simvastatin was a viable alternative to Lipitor for most patients.

At its minimum 10-milligram dose, Lipitor reduces bad cholesterol an average of 39 percent. In contrast, a 40-milligram dose of simvastatin cuts cholesterol by as much as 41 percent. For patients who need a higher-potency statin, Vytorin will be available, Mr. Littlejohn said. "Consumers and physicians and employers have seen the steady, almost inexorable rise in pharmacy costs, and said nothing can be done," Mr. Littlejohn said. "We're saying something can be done."

Other insurers also say the Zocor patent expiration is an opportunity to reduce drug spending. Robert Seidman, the chief pharmacy officer for WellPoint, the nation's largest publicly traded health insurer, estimated that wide use of simvastatin could reduce the nation's drug costs by $2 billion or more a year. To encourage patients to switch from Lipitor, WellPoint plans to offer members four to six months of free simvastatin as soon as generic versions are available, he said.

But Pfizer is fighting back. To demonstrate Lipitor's benefits in different kinds of patients, Pfizer has conducted 400 clinical trials on Lipitor, covering 80,000 people. Lipitor's edge over other statins goes beyond its superior ability to lower cholesterol, said Mr. Kelly.

The data from those clinical trials has enabled Pfizer to repeatedly broaden Lipitor's label of approved uses, changes that must be approved by the F.D.A. Last month, the F.D.A. said Pfizer could begin to market Lipitor for the prevention of heart attacks and strokes in diabetics. To build brand loyalty, Pfizer also has thousands of sales representatives discussing Lipitor with doctors and spends at least $60 million annually to advertise Lipitor to consumers, according to Brandweek magazine. Pfizer declined to discuss how much it spends to market Lipitor.

Dr. David Hyman, professor of medicine at Baylor College of Medicine in Houston, said he did not expect many patients to be switched off Lipitor. He pointed to drugs that lower blood pressure, where expensive branded medicines dominate cheaper generics despite extensive research showing the generics work as well. "So much of the market is really not price-responsive."

But other experts on drug benefits said they believed that generic simvastatin might put a dent in Lipitor's sales, because companies, government agencies and patients had become so concerned about drug costs.

"It's very likely that a large portion of the market, especially those covered by managed care organizations, will switch to generic Zocor," said Albert Wertheimer, a professor of pharmacy at Temple University. "It seems like a reasonable thing to try."

[waldron] 09/9/2005 18:30

Actelion Drug Tracleer Has Competition

Friday, September 09, 2005 6:37:18 AM ET
Dow Jones Newswires



1023 GMT [Dow Jones] Current market expectations for sales potential of Actelion's (ATLN.EB) main drug Tracleer are too optimistic, says Helvea analyst Andrew Fellows. "The success of competing product sildenafil and its role in the treatment of pulmonary arterial hypertension are growing," he says. Rates shares reduce with CHF115 price target. Trades -1% at CHF145.50. (AAG)

[waldron] 09/9/2005 08:54

CSFB Keeps Actelion Outperform

Friday, September 09, 2005 2:01:46 AM ET
Dow Jones Newswires



0551 GMT [Dow Jones] CSFB "strongly reiterates" outperform rating for Actelion (ATLN.EB) after R&D day. Key message of "upbeat" meeting, says CSFB, is that Actelion has made considerable progress in extracting more value from flagship Tracleer treatment and in its overall pre-clinical and clinical pipeline. Major trigger for stock will be Tracleer's extension potential in two types of pulmonary fibrosis - SScPF and IPF - says CSFB, on which data are expected in 4Q. Target is CHF160. Shares closed at CHF144.10 Thursday. (KAB)

[maywillow] 06/9/2005 16:29

Actelion downgraded to "sell"

Tuesday, September 06, 2005 10:58:16 AM ET
Merrill Lynch

LONDON, September 6 (newratings.com) - Analysts at Merrill Lynch downgrade Actelion (ACT.ETR) from "neutral" to "sell," while reducing their estimates for the company. The fair value is set to CHF136.

In a research note published this morning, the analysts mention that market is over-optimistic about the prospects of the company's pulmonary hypertension drug, Tracleer. The analysts believe that sales of Actelion's Tracleer drug would decline in 2010 on account of increasing competitive pressure and the expected slowdown in the PAH market. The EPS estimates for 2006 and 2007 have been reduced from CHF6.18 to CHF5.67 and from CHF7.07 to CHF6.79, respectively.