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Monday, August 19, 2002
By BILL ALPERT
There's an ominous billboard near Corpus Christi, Tex.: A law firm asks travelers if they've taken the drug Zyprexa and suffered diabetes. Eli Lilly used to need the antidepressant Prozac. Now it needs the antipsychotic Zyprexa. As Prozac sales dive in the face of generic competition, the Zyprexa schizophrenia treatment has become the most important drug for the Indianapolis drugmaker.
Prozac sales fell 71% to $380 million in the first half of this year, while Zyprexa sales grew 26% to $1.7 billion -- nearly a third of Lilly's $5.3 billion in total sales through June, and surely a higher portion of profits. Jitters over Zyprexa, therefore, make Lilly investors shake.
![]() On the Mend The Nasdaq Composite last week gained 54.89, or 4.2%, to 1361.01. The index has recovered almost 13% since bottoming at 1206.01 on August 5. Positive earnings news from Dell and Analog Devices helped bolster technology shares. |
Just as the New York-listed shares recovered from worries about new product delays, investors have struggled this month with reports that link Zyprexa to diabetes. After bouncing like a yo-yo between 60 and 45, Lilly shares closed Friday at 57.10.
Wall Street's latest Zyprexa worries were fanned by the Boston-based broker Leerink Swann, which publicized recent medical reports of diabetes incidence among Zyprexa patients. Lilly itself has studied the issue, and company researchers say that blood-sugar problems also accompany other schizophrenia drugs -- and indeed, accompany schizophrenia itself. Any diabetes issue should therefore not affect Zyprexa's market share, Lilly tells doctors and investors.
But the evidence to date convinces leading psychiatry researchers that Zyprexa does pose a greater risk of diabetes than other widely prescribed -- and equally effective -- schizophrenia drugs. For the large number of psychiatric patients who have pre-existing risk factors for diabetes or heart disease, informed psychiatrists have started to prescribe the rival drugs of manufacturers like AstraZeneca, Johnson & Johnson and Pfizer, says Dr. John W. Newcomer of Washington University in St. Louis. From his experience as advisor to Missouri's Medicaid program, Newcomer believes that some of Zyprexa's continuing sales growth may reflect off-label prescription by primary care doctors who are trying the drug on less severe mental illnesses. He has no direct evidence that Lilly encourages off-label use. From his Medicaid work, Dr. Newcomer is also aware that Zyprexa is priced about two-thirds higher than J&J's Risperdal.
Zyprexa is no longer the first choice for Dr. Henry Nasrallah, a researcher at the University of Mississippi. "When you have a class of drugs that includes many excellent drugs, a conscientious physician is going to first choose one that does not cause side effects," he says.
As Lilly shares faltered on Zyprexa worries this month, Morgan Stanley analyst Jami Rubin hosted a conference call with Lilly and outside doctors. She concluded that diabetes threatened Zyprexa's growth no more than any rival drugs, and maintained her 2003 estimate of $2.80 per share, with a 60 target on the stock.
But analysts like Leerink Swann's Mario V. Corso have given wide currency to studies published by Dr. Elizabeth Koller, a medical officer in the Food and Drug Administration's division of metabolic and endocrine drug products. While not speaking in official FDA capacity, Koller has co-authored several studies on the incidence of diabetes-related problems in patients receiving Lilly's Zyprexa, Johnson & Johnson's Risperdal and the older generic antipsychotic clozapine.
In last December's American Journal of Medicine, Koller described 384 adverse event reports to the FDA about clozapine. Nearly 75% of those patients became diabetic for the first time, after receiving the drug. After reducing their dose, 46 improved. But 25 died. In the July issue of Pharmacotherapy, Koller analyzed 289 reported diabetes problems with Zyprexa -- 225 were first time diabetes diagnoses. Twenty-three patients died. Koller's co-author, Duke University psychiatrist P. Murali Doraiswamy, even issued a press release noting that the average age of diabetics in the Zyprexa study was 10 years younger than the average for all diabetics. Most recently, at a San Francisco medical meeting, Koller described 123 diabetes reports among J&J's Risperdal -- 83 of them first timers.
Koller duly notes that her uncontrolled research can't show causality. Blaming any psychiatric drug for diabetes is complicated by other risk factors. Apart from any drugs, the two million Americans with schizophrenia suffer more diabetes and heart disease than does the general population. The same is true for patients with manic-depressive disorder, another approved indication for drugs like Zyprexa, says Lilly clinical researcher Dr. Robert W. Baker. Lilly's studies in the clinic and in prescription databases show no higher blood sugar among Zyprexa recipients than among those on other drugs. The company takes the issue seriously and has kept the FDA informed.
Lifestyle accounts for some of the increased frequency of heart disease and diabetes among schizophrenics. Such folks typically smoke more, eat unhealthy foods and get less exercise. The factor that troubles most psychiatrists, however, is obesity. Patients receiving strong psychiatric drugs are obese at an above-average rate, says Washington University's Dr. Newcomer. Obesity and diabetes have a strong relationship. And there's little remaining debate, says Dr. Newcomer, that certain antipsychotics trigger more weight gain than others. Those drugs are the older drugs phenothiazine and clozapine, and Lilly's Zyprexa.
In review articles and controlled laboratory studies published in journals like the Archives of General Psychiatry, Newcomer concludes that about 75% of new diabetes cases appearing in psychiatric patients can be associated with the weight they gain. The remaining 25% develop diabetes without weight gain, leading Newcomer to suspect that drugs can lead to diabetes through additional mechanisms. Controlled experiments on schizophrenia volunteers showed Newcomer that Zyprexa and clozapine -- but not J&J's Risperdal -- were significantly more associated with clinically high blood sugar than older antipsychotic drugs.
"My impression is that the growth of Zyprexa prescriptions among psychiatrists has tended to level off," says Dr. Newcomer. "Zyprexa is an excellent antipsychotic, and there are many patients taking it and doing very well." For patients with any risk factors for heart disease or diabetes, however, he'd prescribe drugs like Pfizer's Geodon, J&J's Risperdal or AstraZeneca's Seroquel.
E-mail: william.alpert@barrons.com
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