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Generic Prozac on its way
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August 2, 2001: 3:51 p.m. ET
Barr begins antidepressant shipments; Lilly still headed to Supreme Court
By Staff Writer Kim Khan
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NEW YORK (CNNfn) - Just a year after Barr Laboratories won its first legal battle against Eli Lilly over a generic form of blockbuster antidepressant Prozac, the cheaper capsule is heading toward pharmacy shelves.
Barr is set to begin shipping the 100 million 20-mg capsules it has earmarked for retailers and wholesalers on Thursday and by doing so, Barr is effectively discounting any possibility of a last-minute Supreme Court patent reprieve for Lilly. Prozac's patent protection expires midnight Thursday.
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 Bruce Downey, chairman and CEO of Barr Laboratories, chats with CNNfn about generic version of Prozac. |
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"We're ready to ship in the morning," Barr Labs Chairman and CEO Bruce L. Downey told CNNfn.com. "It should be on the shelves at some pharmacies on Friday or Saturday and available virtually nationwide by the first of next week."
On Thursday a handful of international companies also received U.S. Food and Drug Administration approval for generic Prozac in different dosages. Dr. Reddy's Laboratories (RDY: up $0.44 to $24.99, Research, Estimates) received approval for a 40-mg dosage, Teva Pharmaceutical Industries (TEVA: down $2.15 to $67.75, Research, Estimates) received approval for 20-mg and 5-mg dosage, Geneva Roth Pharmaceuticals received approval for 10-mg dosage and Alphapharm received approval for 10-mg and 20-mg tablets.
The final legal obstacle to generic Prozac hitting the market was removed in Indianapolis U.S. District Court on July 27 when Judge Sarah Evans Barker issued a final judgment in favor of Barr ending all appeals at that level.
Lilly still has recourse to petition the Supreme Court, and company spokesman Ed West said Lilly will definitely pursue that option, which could conceivably extend Lilly's patent and block further generic distribution. West said the company would likely file its brief close to the end of its mid-October deadline.
Once that appeal is filed, Barr (BRL: down $4.31 to $80.73, Research, Estimates) would have 30 days to respond and the Supreme Court would have a further 10 days to decide whether to hear the case.
But Downey said he expects the Supreme Court will uphold the previous judgment. "My guess is they will choose not to rehear," he said.
After successfully challenging Lilly's exclusivity for Prozac, Barr will enjoy some distinction of its own as the only provider of a generic version for about 180 days.
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Prozac generated $2.6 billion in sales for Lilly (LLY: up $0.65 to $79.55, Research, Estimates) in 2000 and the generic version is expected to have a strong impact on Barr's top and bottom lines.
Downey said there are "a lot of variables in such a big launch, so you don't have perfect visibility" but estimated impact on fiscal 2002 earnings would be somewhere between $2 and $3 a share.
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A generic version of the antidepressant will be available nationwide next week | |
David Buck, analyst with Buckingham Research Group, said he estimated the drug will add $384 million in sales and $1.50 a share in earnings for Barr in the fiscal year ending June 30, 2002.
For the same time period, CIBC World Markets Elliot Wilbur said he sees sales of generic Prozac at $410 million, with an earnings per share boost of $2.80.
Lilly, alternately, could lose up to 80 percent of its market share once more generic drugs become available.
Mike Krensavage of the brokerage firm Raymond James & Co. estimated this week that Lilly's sales of Prozac would fall as much as 77 percent to $590 million next year if generics are on the market.
Click here for more on generic Prozac
With Prozac, as with its other generics, Barr took aim at what it saw as a weak patent.
"We review these patents for validity and of course there's a lot of incentives on the other side to press the patent to the bursting point," Downey said.
After targeting a specific drug, generic drug developers submit requests for approval with the FDA as if there were no patent. The patent-holder then has 45 days to take action.
Barr garnered its first major victory on Aug. 9, 2000, when a U.S. Court of Appeals reversed an Indiana lower court that had given Lilly Prozac patent protection through 2003 and set a deadline of this year.
In October 2000, Lilly vowed to appeal all the way to the Supreme Court, but by then the stock had tumbled 21 percent and the company and analysts began working on the assumption that generic Prozac would be on the shelves in 2001.
Lilly got a standard 6-month extension for submitting pediatric data to the FDA in November 2000, but the stock hardly moved on May 31, 2001 when an appeals court panel upheld the August deadline, indicating investors had already accepted the bad news and priced it into the stock. 
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Barr Labs
Eli Lilly
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