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Pfizer loses U.K. patent
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November 8, 2000: 9:18 a.m. ET
U.K. judge says key ingredient was in public domain before Pfizer got patent
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LONDON (CNNfn) - A British judge Wednesday invalidated Pfizer Inc.'s U.K. patent on a key compound in the blockbuster male impotence remedy Viagra, siding with rival drug makers that are developing a competing product.
The ruling by English High Court Judge Hugh Laddie affects only Pfizer's patent in Britain, although a similar case challenging the Viagra patent on a European-wide level is pending in Brussels. The case against Pfizer, the world's largest drug company, was brought by Eli Lilly and Co. (LLY: Research, Estimates) and ICOS Corp. (ICOS: Research, Estimates), two U.S. drug makers that are collaborating on a proposed Viagra rival, called Cialis.
Viagra, one of the world's fastest-selling drugs, generated more than $1 billion in sales last year. Since the drug was introduced in 1998, doctors have written more than 30 million prescriptions and at least 300 million of the diamond-shaped blue tablets have been dispensed.
In his ruling, Judge Laddie said a patent on a key component in Viagra, sildenafil citrate, was based on knowledge already in the public domain before the patent was granted in 1993. Sildenafil is known as a "PDE-5 inhibitor" that helps smooth muscle relaxation and enhance penile erection.
 In response to the decision, Pfizer said the ruling did not involve the basic product patent on Viagra, which runs through 2013. The company said it is considering its legal options.
"Pfizer is obviously reviewing the decision and considering an appeal," the company said. The company is "disappointed the court failed to recognize Pfizer's pioneering discovery ... in the treatment of male erectile dysfunction in revoking this work."
Pharmaceutical analyst Mark Ravera of Mehta Partners in New York said it's unclear whether the ruling will have any impact on other courts, but he said that if the decision stands up on appeal Lilly and ICOS then will be more likely to pursue similar patent challenges to Viagra in the United States and other markets.
Pfizer would not disclose sales figures for Viagra in the U.K. or in Europe, saying only that Europe was the third-biggest market for the anti-impotence pill after the United States and Japan. For the third quarter, Viagra sales totaled $332 million worldwide, including about $133 million in non-U.S. sales.
Viagra's success has encouraged other drug makers to develop competing products. The overall market for erectile dysfunction drugs is expected to grow from nearly $1 billion in seven major pharmaceutical markets worldwide in 1999 to about $2.5 billion in 2002, according to a study released last month by Decision Resources Inc., a pharmaceutical research firm.
Industry analysts say that while Viagra has been a blockbuster success, there is room for improvement in how the drug works. Studies show that Cialis, the experimental treatment made by Indianapolis-based Eli Lilly and ICOS of Bothell, Wash., may have a faster onset of action than Viagra.
In June, the makers of another proposed impotence treatment withdrew their application for the medication after questions over potential side effects. TAP Pharmaceuticals, a joint venture between Illinois-based Abbott Laboratories Inc. (ABT: Research, Estimates) and Japan's Takeda Chemical Industries Ltd., said it will conduct more studies of the proposed drug, known as Uprima, before resubmitting it to the U.S. Food and Drug Administration for review.
The possible introduction of a Viagra rival, however, demonstrates Pfizer's vulnerability on several of its top products, Ravera said. The company became the world's largest drug company earlier this year following its $115 billion merger with Warner Lambert.
Besides a Viagra rival, a potent challenger could emerge to Pfizer's fast-growing anti-cholesterol treatment, Lipitor, Ravera notes. Britain's AstraZeneca PLC (AZN: Research, Estimates) has touted its experimental cholesterol medication, which is still undergoing clinical trials, as more effective than Lipitor.
"The competition is really lining up right now, trying to take a shot," Ravera said.
In afternoon trading in New York, shares of all three companies traded higher, as pharmaceutical shares bounced higher amid confidence on Wall Street in the outcome of the U.S. elections a day earlier. The Republicans are viewed as more friendly to the pharmaceutical industry than the Democrats.
Lilly stock gained $4.38, or 5 percent, to $91.63, while ICOS stock increased $2.50, or 4.7 percent, to $55.06. Shares of Pfizer (PFE: Research, Estimates) gained $1.13 to $45.94. 
--from staff and wire reports
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