A Food and Drug Administration advisory committee meets Thursday to review an experimental drug that has already captured headline writers' attention as a potential Viagra for women.

The product is called Intrinsa. It's a transdermal patch that transmits testosterone, a hormone that can increase female sexual desire.

For consumers, the question is whether this drug will do for women what Viagra did for men.

For investors, the question is whether it will do financially for developer

Procter & Gamble

(PG) - Get Report

what Viagra did for

Pfizer

(PFE) - Get Report

. Viagra produced sales of $1.88 billion last year, although that number will fall in 2004 due to competition.

Pfizer also spent eight years testing Viagra on women but gave up in March, saying clinical trial results didn't justify seeking FDA approval.

The market for Intrinsa "could be sizable, but it will take time to create," said Constance M. Maneaty of Prudential Equity Group in a Sept. 23 report to clients that she recently updated.

"As probably the first to market with a treatment for a condition that is not well diagnosed, we think spending will be considerable," she said. "On the other hand, it is likely to get a lot of free press as curiosity builds and data are presented."

P&G is approaching the FDA cautiously. It is seeking approval for Intrinsa to treat women who have entered menopause due to the surgical removal of their ovaries. P&G also is testing the drug on naturally menopausal women, a much bigger market. The company also knows that federal law allows doctors to prescribe a drug for any use once the FDA has approved it for a single disease or condition.

P&G is seeking FDA approval based on several company-sponsored tests, including one that shows surgically menopausal women using the Intrinsa patch experienced statistically significant increases "in the frequency of totally satisfying sexual activity" and "sexual desire" vs. women receiving a placebo.

The Intrinsa patch, which is applied to the abdomen, replaces the testosterone produced naturally from the ovaries and adrenal glands. When ovaries are surgically removed, women experience an immediate decline in testosterone. "The loss of sexual desire can be associated with this testosterone drop," P&G says.

Testosterone has been given to men to boost their sex drive, but there is no FDA-approved treatment for women, even though some doctors have given women diluted versions of male testosterone drugs.

Assessing the Market

Maneaty, who remains neutral on P&G, noted that a 1999 article in

The Journal of the American Medical Association

said perhaps 40 million U.S. women experience "some degree of impaired sexual function," with most being affected by menopause. (She doesn't own shares, and her firm doesn't have an investment banking relationship.)

Yet what percentage of these women would try -- or benefit from -- Intrinsa is unknown, even if P&G eventually gets FDA approval to market the drug to naturally menopausal women.

Another issue is whether women will prefer the Intrinsa patch to a similar drug that might be supplied as a gel, lotion, cream, pill or nasal spray. All of these experimental products are in the works at other, much smaller companies such as

Vivus

(VVUS) - Get Report

,

BioSante Pharmaceuticals

(BPA)

,

Nastech Pharmaceutical

(NSTK)

and

NexMed

(NEXM)

.

Right now, based on the regulatory process, P&G has a lead of perhaps 18 months to 24 months over its nearest competitors; it also has an edge due to its marketing prowess.

Assuming a best-case scenario, Intrinsa could reach the market in mid-2005, said Lauren R. Lieberman of Credit Suisse First Boston in a report to clients. She predicts Intrinsa could produce sales of $250 million to $300 million in 2007 and 2008, plus similar amounts in Europe.

By Lieberman's calculations, there are 7 million to 10 million U.S. women in menopause due to the surgical removal of their ovaries. About 10% meet the definition of having reduced sexual desire known as hypoactive sexual desire disorder, she said. In addition, there are some 30 million naturally menopausal women, of whom 16% may experience low sexual desire, she added. (She doesn't own shares; her firm has an investment banking relationship with P&G.)

Analysts trying to gauge Intrinsa's sales potential should pay attention to the erectile dysfunction market experience. Although the makers of impotence drugs talk about research that shows perhaps 30 million U.S. men experience erectile dysfunction, some analysts are concerned that the market isn't growing fast enough to accommodate healthy profits for all of the players: Viagra from Pfizer; Cialis from

Icos

(ICOS)

and

Eli Lilly

(LLY) - Get Report

; and Levitra from

GlaxoSmithKline

(GSK) - Get Report

and Germany's

Bayer

(BAY)

.

P&G's Prescription Drug Prospects

P&G started working on Intrinsa in late 1997 when it signed a licensing agreement with the privately held TheraTech of Salt Lake City, Utah.

Watson Pharmaceuticals

(WPI)

acquired TheraTech two years later.

Intrinsa is "the most promising product" in the P&G drug research pipeline, said Lieberman of Credit Suisse First Boston. She estimates that P&G will record 90% of the drug's revenue in its agreement with Watson.

P&G's drug unit "has been designated one of P&G's growth areas," she said in a report to clients last month. This division has about $2 billion in sales. That's more revenue than most biotech companies, but it's only about 3.5% of P&G's total sales. Over-the-counter drugs account for about 3.5% of corporate sales, too.

Intrinsa would fit in nicely with Actonel, a treatment for postmenopausal osteoporosis, which is P&G's leading prescription product, said Lieberman. "The company should be able to realize marketing, sales and distribution synergies" for the two drugs because they will have "significant overlap" among targeted physicians and patients, she said.

But even if Intrinsa hits $1 billion in sales in a few years, it will still represent less than 2% of corporate revenue, said Constance Maneaty of Prudential Equity Group.