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Viagra rival planned
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August 23, 2001: 3:18 p.m. ET
Lilly, biotech Icos say competing drug will hit market at end of 2002
By Staff Writer Kim Khan
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NEW YORK (CNNfn) - What do Viagra and Bill Gates have in common?
Viagra is the only game in town when it comes to treating impotence, but Eli Lilly and a biotech company with Bill Gates as one of its top investors are looking to level the playing field.
Lilly and Icos Corp., a Bothwell, Wash.-based biotech 10 percent owned by Gates, say their new drug will act faster and work longer than Viagra and is on a pace to debut next year.
Icos (ICOS: up $1.26 to $59.51, Research, Estimates) teamed up with Lilly in 1998 to develop a drug that would combat erectile dysfunction (ED) by inhibiting a certain enzyme, PDE5, allowing increased blood flow to tissue.
The companies hope to tap into a worldwide market of as many as 70 million men suffering from ED, a market that generated $1.3 billion in sales for Pfizer's Viagra last year.
The drug, Cialis, is expected to be available at the end of 2002 and analysts said judging by Icos' recent presentation to investors the marketers are ready to make a strong push against what Pfizer says is the best known pharmaceutical brand.
"(Icos) has taken a more aggressive stance and clearly indicated they are going to be more aggressive at the launch of Cialis," C.E. Unterberg Towbin analyst Ken Trbovich said.
Icos gave investors and analysts an update on research and development Wednesday, and while the company touted the rest of its pipeline, the big story was Cialis.
"This will be a major launch and we will be ready," said Leonard Blum, Icos vice president of sales and marketing.
Icos is banking on Cialis to bring it to profitability sometime after 2002.
"Cialis looks great and we're on track for approval and launch for the second half of next year," Icos Chairman, President and CEO Paul N. Clark told an investors conference.
Clark said one of the reasons Icos chose Lilly out of its many suitors is the drugmaker's willingness to help Icos "get up the curve" and learn from launching its first product.
For Lilly (LLY: up $0.54 to $82.34, Research, Estimates), it's an opportunity to keep new drugs coming onto the market and make up the lost revenue from the launch of generic Prozac earlier this month.
Icos: It acts quicker, lasts longer
In Phase III results released in June, Icos said 85 percent of men taking Cialis at a 20 mg dose reported improved erections. In two additional trials men reported improved ability to achieve erections up to 24 hours after taking Cialis, and in one trial the drug was effective in response to sexual stimuli 16 minutes after dosing.
Analysts said those results mean Cialis works quicker and longer than Viagra, which will be a strong selling point.
"With Viagra you've got an onset of action of an hour and it lasts for four hours, and here's a new drug that has an onset of 16 minutes and lasts all day," said Tony Butler, drug analyst for Lehman Brothers. "Which might appeal for someone who wants to have more flexibility with their sexual experience."
"You look at time of onset, duration effect and (the recent) data basically tells us that there's no interaction with food," Trbovich said. "That would provide a fairly different profile of how the drug is used."
But Lehman's Butler said rather than trying to get Viagra users to switch, Icos and Lilly may target those suffering from ED who take no medication at the moment.
"Will it take share from Viagra? I don't know the answer to that," he said. "Can you out market Pfizer? Viagra is probably the best-known drug in the world."
But he estimates the entire ED market could grow to $6 billion, and with Viagra estimated to take in $1.5 billion in revenue this year that leaves room for other players.
Check out drug stocks here
Pfizer (PFE: down $0.02 to $40.66, Research, Estimates) is confident that its drug can face any competition.
"Viagra is the best-known global pharmaceutical brand in the world, used by 15 million men with 45 million prescriptions written to date, backed by a wealth of experience," Pfizer spokesman Geoff Cook said.
"That's a pretty powerful and formidable profile for any competitor to face," Cook added.
He added it is very unlikely another version of Viagra will come out -- which a number of companies are trying in an effort to reassert market dominance – because with the drug's 82 percent effectiveness it's difficult to find an improvement.
Cialis may not have only Viagra to battle, though. Bayer's vardenafil has also demonstrated positive results in Phase III testing.
One setback for Cialis was clinical data that showed the drug had no effect compared with a placebo in women with female sexual arousal disorder (FSAD), one of the original goals of the Icos-Lilly partnership. Pfizer said it too is doing research into treating FSAD. 
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