Lilly Gains on Zyprexa Patent Win

Zyprexa has been under pressure in the U.S. because of competition from other antipsychotic medications. For example, a recent report by A.G. Edwards noted that Zyprexa's U.S. prescriptions dropped 22% between the first quarter of 2004 and the first quarter of 2005. By contrast, prescriptions for several brand-name competitors in the class of drugs known as atypical antipsychotics rose during this period.

Competitors include Geodon from Pfizer(PFE), Risperdal from Johnson & Johnson(JNJ), Seroquel from AstraZeneca(AZN) and Abilify from Bristol-Myers Squibb(BMY). Zyprexa remains the third-biggest drug in terms of total U.S. prescriptions, says the A.G. Edwards report, citing data from IMS Health.

"We expect international revenues of Zyprexa to continue to somewhat offset the U.S. sales decline," says Albert L. Rauch, of A.G. Edwards, in an April 14 report to clients, before the federal court's decision, which affects only U.S. patent protection. He has a buy rating on Lilly. He doesn't own shares; his firm doesn't have an investment banking relationship.

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