Viagra Faces Rising Challenges in Fight for $1.5 Billion Market

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Researched by Industrialinfo.com (Industrial Information Resources, Inc.; Houston, Texas). Much like a famous person, when a product has "made it", it only needs one name spoken to spark instant worldwide recognition. Viagra is one such product. When Pfizer (NYSE: PFE) (New York, New York) first launched Viagra (sildenafil) in the U.S. in April 1998, a whole new market was created - the oral treatment of male erectile dysfunction (ED). Some estimates claim that half of all men between the ages of 40 and 70 years are affected to some degree with ED. Most cases are caused by an underlying medical condition, such as hypertension or diabetes. 2001 saw Viagra sales increase 13% to $ 1.5 billion. Inevitability, challengers have emerged.

NexMed, Incorporated (Nasdaq: NEXM) (Robbinsville, New Jersey) has started its assault with Befar, the world's first topical treatment for ED. The company has been selling the drug in China since last July and is now preparing to offer it to the rest of Asia and ultimately the U.S. Befar's active ingredient, alprostadil (prostaglandin E1), is an off-patent drug that has been well recognized in ED therapy for several years around the world, but its widespread use is restricted by the fact that it has to be directly injected. NexMed is readying Phase III U.S. studies of the drug referred to as Alprox-TD, after earlier studies have shown 85% of men with ED reported satisfaction with the cream. NexMed recently completed over $8 million dollars in process and supporting equipment installation at their new manufacturing facility in Highstown, New Jersey. Viagra, an oral therapy in pill form, has garnered some negative attention concerning the potential problems of taking the drug while using an organic nitrate for heart problems. Although endorsed as a "safe drug" by the FDA, 16 deaths have been reported in which Viagra was listed as an "associated drug". Schering-Plough (NYSE: SGP) (Kenilworth, New Jersey) hopes to address that issue with Vasomax, an oral phentolamine that doesn't interact with nitrates, which has passed its first double-blind, placebo-controlled studies and is being considered as an alternative therapy for men with ED who have heart concerns. Vasomax is currently in Phase III clinical trials.

"Does all of this mean Pfizer has to worry?" muses Annette Kreuger, Manager of the Pharmaceutical/Biotech at Industrialinfo.com. "Let's put it in perspective, while Viagra is extremely profitable and Pfizer wants it to remain that way, the drug certainly isn't the company's only moneymaker. Altogether, Pfizer has eight drugs that each year bring in sales of more than $1 billion apiece, a record currently unmatched in the industry. NexMed recently released financial statements reflecting that the company had approximately $11 million in cash, cash equivalents, certificates of deposit, and marketable securities as of March 31, 2002. Schering just got hit with a $500 million fine for FDA manufacturing violations and orders to bring 4 plants up to code. Meanwhile, Pfizer is in planning for an estimated $800 million facility investment in Ann Arbor, Michigan."