Eli Lilly pays $75 million for anti-impotence drug; other medications coming

Viagramania" has reached the pharmaceutical industry. Spurred by sales of Pfizer's little blue pill, drug manufacturers are shelling out big bucks to get a piece of the erectile dysfunction market. Case in point: Hi Lilly, Indianapolis, is so confident in IC351 - impotency drug in the pipeline that may have fewer side effects than Viagva - that it agreed to pay a whopping $75 million to Icos Corp., Bothell, WA, for rights to develop and sell the medication. Lilly and Icos will split IC351's marketing costs and profits in North America and Europe.

Also, Schering-Plough, Madison, NJ, paid $10 million to Zonagen, The Woodlands, TX, for the marketing license of Vasomax (phentolamine), which is pending FDA approval.

But don't expect Pfizer, New York City, to take the news lying down; Viagra's manufacturer is currently working on Zydis - a "potency wafer" form of its blockbuster drug, able to dissolve easily in the mouth in seconds. If the faster-acting formulation is successful, it could allow patients to take Viagra only minutes before sex. However, according to Andy McCormick, a Pfizer spokesperson, the new form is still several years from being marketed.

Although some analysts have questioned Lilly's hefty paycheck for a drug that has not yet reached phase III clinical trials and is not expected to reach market for another two to three years, Hemant Shah, analyst with HKS & Company, Warren, NJ, said the $75 million was money well spent.

"It's like paying an entrance fee into a market that will always be there," Shah told AMERICAN DRUGGIST. "Viagra slowed down a bit and is still going to do $1 billion dollars in its first 12 months."

IMS Health, Totowa, NJ, a healthcare information company, also reported strong sales of erectile dysfunction medications. For the 12 months ending August 1998, sales totaled almost $480 million, $356 million attributed to Viagra, which was not marketed until the end of March.

Unlike IC351, however, Shah does not expect Vasomax to be much of player in the erectile dysfunction market. Indications are that the "efficacy appears to be below that of Viagra and the side effects profiles are not in," he said. (Schering-Plough and Zonagen declined comment.)

Despite the projected billion dollar plateau, Shah said three issues are limiting the potential market for erectile dysfunction medications.

First, Shah estimated that up to 75 percent of Viagra users are not getting reimbursed by third-party plans for the cost of the drug, with the average wholesale price around $250 for bottles of 100. "The rate of reimbursement won't change," he said. "It might even get worse."

Another problem with Viagra, or any forthcoming competitors, Shah added, is the potential for heart attacks in elderly patients. "Heart attacks are related to the [sexual] activity, not the drug," he said. "Elderly men need to accept that they won't be able to get involved in those activities as much as they want to."

Most important, Shah believes that greater market expansion for erectile dysfunction drugs hinges on whether newer agents are less likely to interact with other medications the patient may be taking. "There are a fair amount of men who use nitroglycerin for heart conditions," for example, he said. "The potential for dangerous drug interactions is there."

To date, there have been 120 reported deaths worldwide among Viagra users, though only 69 have been confirmed by the FDA; none of the deaths have been directly linked to the drug.

Shah concluded that the market for anti-impotence medications will remain strong but won't expand that much unless newer treatments have fewer drug interactions than does Viagra.

Early reports on IC351 have been promising, with indications that the drug is more selective than Viagra at blocking an enzyme that prevents erections, according to Lacy Fitzpatrick, associate director of investor relations, Icos. Results from a phase II trial in Europe showed that the drug significantly improved erectile response with minor side effects. In clinical tests, IC351 has not produced the blue tinge to vision that some Viagra users have experienced. Some of the 350 patients already treated with IC351 have complained of headaches or general aches, though no serious adverse events have been reported.