Prozac Sales Can't Depress Lilly

Eli Lilly and Co. said Monday that its profits rose 20 percent during the first three months of this year despite falling sales of it's antidepressant Prozac.

The Indianapolis-based pharmaceutical company also announced it formed a joint venture with French drug maker Sanofi to develop a treatment for colorectal cancer in the United States.

Lilly earned $625.7 million, or 56 cents per share, during the three months ended March 31, compared with $521.1 million, or 46 cents per share, during the first quarter of 1998.

The net income was affected by three one-time events: a gain of $174.3 million from the sale of PCS Health Systems Inc. pharmacy benefits subsidiary to drugstore giant Rite Aid Corp. in January, a pretax charge of $150 million to fund the company's non-profit foundation, and a pretax charge of $61.4 million to write down manufacturing assets in Clinton, Ind., and Indianapolis.

The company said its sales rose 8 percent to $2.26 billion from $2.09 billion in the year-ago period.

Sales of Prozac, the world's top-selling antidepressant, fell 4 percent worldwide to $589.9 million. Lilly said the drug's U.S. sales tumbled 6 percent because of competition from new drugs and because of stocking by U.S. wholesalers at the end of 1998.

The wholesalers still had excess inventory on-hand at the end of the first quarter, Lilly said. That could hurt second-quarter sales of the drug as well.

Prozac has been the company's lifeblood for the past decade, and Sidney Taurel, the company's chairman and chief executive, said the company was taking steps to pump up sales of all of its drugs.

"A high priority of these efforts is to work diligently to improve the sales performance of Prozac," Taurel said in a prepared statement.

Lilly did report some good news on Prozac, saying the Food and Drug and Administration has granted the company an additional six months of sales exclusivity in the U.S. market after new research on the effectiveness of the drug in patients under 18.

That means Lilly will not face generic competition for Prozac until mid-2004 unless pending court appeals result in one or both of the two Lilly patents on the drug being thrown out.

Among other Lilly drugs, sales of the antipsychotic agent Zyprexa shot up 40 percent to $287 million during the quarter.

Meanwhile, Lilly announced it would pay Sanofi an upfront fee and other payments for a share of U.S. sales of a platinum-based treatment for cancer.

The venture plans to submit the new drug, Oxaliplatin, to the FDA as a first-line treatment for metastatic colorectal cancer, in combination with another drug called 5-FU, by the end September.

Colorectal cancer is the No. 2 cancer killer in this country and will kill an estimated 55,000 Americans this year.

By Ken Kusmer