Celebrex, Vioxx & the COX-2 Drugs

Bad Day for Pfizer, Astra, Lilly and Patients
Fri Dec 17, 2004 02:18 PM ET
By Ben Hirschler, European Pharmaceuticals Correspondent

LONDON (Reuters) - Investors in pharmaceuticals were dealt a triple whammy on Friday as Pfizer Inc, AstraZeneca Plc and Eli Lilly and Co all shocked the market with bad news about key products.

Pfizer, the world's largest drugmaker, saw its stock fall as much as 17 percent after trial data for its popular arthritis drug Celebrex showed an increased risk of heart attack.

The medicine is of the same type as Merck & Co Inc's Vioxx, which was pulled from the market in September after tests showed it too posed a cardiovascular threat to patients.

Pfizer said it had no plans to recall Celebrex but investors feared there was mounting evidence that the danger seen with Vioxx may be common to all drugs in the so-called COX-2 class.

"This does not bode well for COX-2s in general," said Ira Loss, an analyst at Washington Analysis.

Reflecting the concerns, shares in GlaxoSmithKline Plc and Novartis AG, which are developing newer COX-2 medicines, also fell.

Pfizer's bombshell came just hours after AstraZeneca reported that its lung cancer drug Iressa -- already launched in the United States, Japan and other non-European markets -- had failed to help patients live longer in a major clinical study.

The news was the third setback for the Anglo-Swedish company in two months and sent its shares skidding more than 9 percent lower to a fresh 21-month low.

Meanwhile, Eli Lilly announced it was adding a warning to the label of its attention deficit/hyperactivity disorder medicine Strattera, advising patients with jaundice or a liver injury to stop taking the treatment. Its shares lost 6 percent.

"The pharmaceutical industry has been taking one hit after another," said Jason Leander, senior market strategist at Lind-Waldock, a division of Refco LLC.

The American Stock Exchange's pharmaceutical index was down 4.1 percent in its biggest one-day drop since May 19, 2003.

Note: Another case of where the cure is worse than the problem?