That's the rallying cry at
these days as its sales reps go out to push the new painkiller
. Merck needs this drug to be huge to stave off patent expirations in the next several years. An added incentive: The company wants to beat archrival
, which is selling
, the competing drug in the so-called Cox-2 class.
The bitterness between the two stems from Pfizer's big success when its anti-cholesterol medicine Lipitor surpassed Merck's
as the market leader in that megaselling category last year. So Merck wants to meet Pfizer at the ramparts at dawn.
Things are going well for Merck so far, so well that the drug must be causing its Whitehouse Station, N.J., headquarters to feel a pleasant numbness. It's too early for euphoria, but as of June 23, Vioxx had grabbed a 22.6% share of the Cox-2 market. Celebrex has the rest, of course, but it also had a big head start, having been launched at the beginning of the year. Vioxx, about four weeks into its launch, is selling at an annualized rate of $167 million, according to an estimate from Jim Flynn at
ING Baring Furman Selz
, while Celebrex is selling at an annualized rate of $1.37 billion.
Before Vioxx came to market, investors worried about Merck. They always worry (rightly) about this and that for the company: poor quality earnings, competition, patent expirations. In this case, the concern was that the new anti-pain and arthritis drug wouldn't be able to cut into the market share gained by Celebrex's. Investors were split. Some thought Vioxx had advantages that would help it become the leader; others thought that after the acquisition of such a monster share by Celebrex, which was developed and co-marketed by
, Pfizer would cede little ground.
Source: ING Baring Furman Selz
But now, Flynn at ING Baring says he's increasingly convinced that Vioxx may be the market leader by the end of the year, though it's not in his estimates yet.
Stockjobbers have yet to give Merck much credit. "Even given how well it's done, Street analysts are reluctant to heap a lot of praise on Merck," says an analyst at a major hedge fund in New York that's long Merck. "The perception is that Merck is the stodgy company" compared with Pfizer. In the past month, Merck's stock has been flat. It's down about 7% for the year. (The drug group's performance stinks this year, of course.)
Just four weeks after it hit the shelves, Vioxx has 5.2% of the nonsteroidal anti-inflammatory drug, or NSAID, market, compared with Celebrex's 17.9%. What must be alarming to Monsanto and Pfizer is that Vioxx is clearly eating into Celebrex's share. Celebrex hit its peak of 20.7% of the NSAID share just as Vioxx was trickling out to shelves. It hasn't seen that level since. ING's Flynn thinks that half of Vioxx's prescriptions come from market expansion and half at the expense of Celebrex.
A spokesman for Monsanto's drug development division
says the company invites the competition. "We believe we have the superior compound," he says.
Early on, the media reported that Vioxx didn't have as strong a launch as Celebrex and that it was far behind ultra-successful beginnings for
and Lipitor. That's undeniable, but that analysis also fails to take into account that Vioxx is gaining momentum.
A week ago, ING Baring's Flynn raised his Vioxx expectations dramatically. He now thinks that Vioxx will have sales of $430 million this year and $1.3 billion in 2000, up from $300 million and $750 million, respectively. Currently, the Street is estimating Vioxx sales of around $250 million to $300 million this year. That number will likely be increased. ING estimates that Celebrex will sell $1.3 billion this year and $1.84 billion next year. (Flynn rates Merck a strong buy and Pfizer a hold; his firm hasn't done banking for either company.)
Why is Vioxx doing so well?
For one thing, Merck may want it more, while Pfizer has a number of important drugs. For another, the Merck pill seems to be more potent than Celebrex, say some investors and analysts. Vioxx is a once-a-day therapy. Arthritis patients can take it at night and not wake up with dreaded morning stiffness. Merck's compound may have a faster onset of action, as well.
Celebrex also may have been hurt by reports of some deaths among patients taking it. There is no clear causality established, and the
Food and Drug Administration
is confident that Celebrex is safe. Concerns are around, however.
Also, some advantages that Pfizer and Monsanto reps counted on haven't materialized. It appeared early on that Celebrex didn't have an interaction with a blood-thinner called warfarin, but that turns out not to be true.
So far, Vioxx's strong launch hasn't been enough to shuffle off the malaise of the group. But as numbers are raised toward the end of the year, Merck stock may shake its arthritis.