Here is something you may not hear every day: The drug giant Wyeth said yesterday that it was "surprised" to hear that it is about to face generic competition on its $216 million heart drug Inderal LA.
The surprise announcement a day earlier helped beat down Wyeth shares along with news that it had missed Wall Street's profit projections. Wyeth shares on the New York Stock Exchange sank more than 2 percent, or $1.24, to close at $49.36.
In its earnings report, Wyeth said strong sales of its antidepressant Effexor and vaccine Prevnar helped raise fourth-quarter profit 17 percent. Net income came in at $855.4 million, or 63 cents a share, up from $731.7 million, or 54 cents a share, a year earlier.
But Wall Street analysts had been expecting 71 cents a share. Some equity analysts expressed concern about Wyeth's pipeline of new products.
Its six planned products "in our estimation, do not have the combined commercial potential to replenish revenue streams that will be lost at the end of the decade," Barbara Ryan, of Deutsche Bank Equity Research, said in a note to investors.
Wyeth reported an 11 percent increase in sales of Effexor to $936.1 million, and a 25 percent rise in sales of Prevnar to $501.7 million. It also said it expected problems with its Puerto Rico manufacturing plant to be resolved soon, noting that FDA "reinspections" have begun.
Wyeth's Inderal LA is a beta-blocking heart drug used by about three million Americans for hypertension and angina pectoris, according to IMS Health, a Plymouth Meeting consulting firm. Its patent expired in 1997, but nobody has produced a cut-rate generic version until now.
Par Pharmaceutical Cos. Inc., based in Woodcliff Lake, N.J., said Monday that it had received final federal approval to market an extended-release version of propranolol, the generic name of Inderal. The move could cut into Inderal revenue, which was $216 million in 2005 and $221 million in 2004, IMS said.
Asked by analysts about Inderal LA, Ken Martin, Wyeth's chief financial officer, said Wyeth would tweak its 2007 financial projections and look at ways of fighting back against the generic rival, Par Pharmaceutical.
"This is something we didn't know about, it's not in the budget we put together. But as soon as we determine the impact, we will look for ways to deal with it. I'm not upset about it," Martin said.
Wyeth executives explained that drugmakers usually heard about generic launches from their customers, such as physicians, who typically are contacted by generic-drug firms in advance of a launch. But this time, Par Pharmaceutical said nothing in advance.
Peter Wolf, a Par spokesman, said: "In the case of a generic that is off-patent, and for which there hasn't been anything on the market for years, there is something to be said for the element of surprise."
Meanwhile, Philadelphia Common Pleas Court Judge Myrna Field effectively capped Wyeth's liability in its latest Prempro trial at $1.5 million. That is the amount a jury had awarded an Arkansas woman, Mary Daniel, after she took Prempro and developed breast cancer.
The jury found Prempro was a "factual cause" of the cancer. Field agreed to let the jury deliberate in a second punitive phase of the trial, but ruled there was not enough evidence that Wyeth acted recklessly and said it need not pay punitive damages. Wyeth has won or settled three previous cases but faces about 8,300 more lawsuits.
For Wyeth's fourth-quarter and year-end financial report, go to
Contact staff writer Thomas Ginsberg at 215-854-4177 or firstname.lastname@example.org.