My sources tell me that the drug only has about five marketable years with a patent expiration in 2003. However, I also understand Forest has patented an enantiomer (or mirror image) version with a longer patent. The original patent is set to expire at about the same time as Prozac. This will increase the appeal of Celexa to managed care organizations and maybe drive a Prozac-to-Celexa formulary conversion in many cases. Look for FRX to be very aggressive on pricing in order to make a big hit quickly on this drug...
If you all would read the May 30 press release, you would know that it does not matter the patient date for Celexa. In the press release, Forest announced a marketing agreement for the Big Bother of Celexa. It is "the active enantiomer of Celexa, which will enter clinical studies later this year and is patented until the year 2009." If Celexa sells anything like it has in Europe, Forest will transfer the Celexa sales to the new agent before the patient expires. This has been done successfully by all the pharmaceutical companies.
The anti-depressant market in the U.S. is close to 5 billion dollars. Three of the top ten most prescribed drugs in the U.S. are anti-depressants (Prozac #2, Zoloft #5, Paxil #7 I think?). When Forest reaches a 10% market share with Celexa, it will DOUBLE the size of the company's sales.
Dear txny, I have been investing in pharmaceutical stocks for almost twenty years. I can tell you there is nothing that can stimulate these stocks more than a blockbuster drug. I remember buying Glaxo prior to FDA approval for Zantac many years ago. I had to literally explain to brokers what Glaxo was at the time. Even if the patent expires after several years, the company has usually made so much money and has already invested the capital in further research towards other successful drug developement or used it to acquired other companies with strong drug pipelines. I am not familiar with the exact timing for the US drug patent expiration on citalopram/celexa. If anyone knows this information, please inform others on this board. However, I am sure that Forest and its co-marketer Warner Lambert have investigated this issue carefully. It seems unlikely that Forest would have recruited a sales force, now about 850 and that Warner Lambert would have made a serious commitment if Celexa was slated for patent expiration in the USA in a brief time and would be marketed principally as a generic during its drug lifetime. Investors in Forest are betting that Celexa will receive final approval by the FDA (no certainty, but a relatively good bet) and become a major drug. Provided no major restrictions or clinical limitations are placed on its sale by the FDA they have good reason to believe this,,,,, if it is finally approved by the FDA. It has reportedly shown significant effectiveness and a good side effect profile in Europe. It will be an excellent competitor in a vast and expanding lucrative market (not to forget it will also offer help to many people). Thus investors in FRX believe it has the potential to be a blockbuster. If such a scenario proves correct the present p/e ratio is irrelevant as anticipated earning will shrink the p/e markedly. Additionally, Forest's other new products are doing a steady and growing business and should further bolster the bottom line. Also a few other new product introductions are expected over the new few years. Obviously, much hinges on first the approval of Citalopram and, if approved, its success. Forest will not be a one drug company without Celexa, but if it does not have it in its arsenal it would be valued a bit less at this time. If, as investors hope, citalopram is a blockbuster Forest Labs will move up a significant notch from a moderate cap pharmaceutical company into a much more powerful league. Only time (and the FDA) will tell,,,,,,,,
Does anyone know approximately when FRX will receive or not receive approval for Celexa. If not a date, maybe within a month or two period. I understand the company may have received an approvable letter, but I don't believe the stock rallied the day the announcement came out, but I could be wrong. Does anyone have a feeling as to what the stock may do when the company gets a final approval or denial?