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Barr ups 4Q estimates
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July 11, 2001: 3:16 p.m. ET
Expects to beat 4Q expectations, but sees generic Prozac delay
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NEW YORK (CNNfn) - Barr Laboratories expects fourth-quarter earnings to be better than analysts' expectations, but its generic version of depression treatment Prozac will not be ready as early as anticipated.
Barr (BRL: down $0.70 to $64.00, Research, Estimates) said Wednesday that despite weaker sales of its generic version of breast-cancer drug Tamoxifen, the company expects to earn 49 cents to 51 cents per share for the quarter ended June 30, compared with First Call's consensus estimate of 43 cents per share.
The Pomona, N.Y.-based company attributed the increase over previous estimates to better sales of non-Tamoxifen products and to a better mix of sales of higher-margin products.
"It's positive obviously that they are pre-announcing on the upside," said David Buck, analyst with Buckingham Research Group. "We thought they would be held flat by some heavy R&D costs, but they did well with revenues."
Buck said a couple of the company's newer products may have helped boost sales, but the company did not specifically name which drugs might have contributed to the bottom line.
Barr Chairman and Chief Executive Bruce Downey said in a conference call that it is unlikely Barr would be permitted to launch a generic version of Prozac by Aug. 2, when Lilly's patent protection is slated to expire.
Downey said he expects that the patent battle over Prozac between Lilly and Barr would not be concluded by then.
However, he said he expects Barr to have a 180-day exclusivity period as the only seller of a copycat 20-milligram capsule form of Prozac.
Buck said the announcement regarding Prozac was nothing new, and that the company was looking at a launch of Barr's generic version sometime in the September quarter.
But Buck added that there's more to like about Barr than just the generic depression treatment. "We think it's got an interesting pipeline of women's health products," he said. "It's one of the cheaper stocks out there."
At the end of June Barr agreed to acquire Duramed Pharmaceuticals Inc. for $589 million in stock in an effort to boost its female health-care and oral contraceptive portfolio.
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An appeals court panel of judges on May 30 affirmed an earlier decision that reduced Lilly's patent protection over Prozac, meaning it will end in August 2001 rather than late 2003.
Downey said Lilly should decide whether to seek another appeal within the next few weeks, and final paperwork is "unlikely" to be submitted by Aug. 2.
A U.S. Food and Drug Administration memo earlier this year suggested the 180-day generic exclusivity period could be trumped by a 180-day period of exclusivity for branded drug makers, such as Lilly, to perform pediatric testing of drugs.
However, Lilly's pediatric testing exclusivity will expire by Aug. 2, paving the way for generic firms to enjoy exclusivity periods on various dosage forms of Prozac.
Barr will report fourth-quarter earnings on Aug. 7. 
-- from staff and wire reports
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