Approval of Prostate Drug Boosts Merck Stock : Pharmaceuticals: Predictions of $1-billion sales by 1996 sent the firm’s shares up $2.25 to $50.50. But some say Proscar is not a panacea.
The federal government’s approval of a drug that shrinks an enlarged prostate gland, a common condition in older men, is likely to strengthen the strong stable of prescription drugs already produced by Merck & Co., analysts said Monday.
Annual sales of Proscar, approved for marketing late Friday by the Food and Drug Administration, are expected to rise to more than $1 billion by 1996, which would place the drug among Merck’s top three or four sellers.
“It’s the most significant--meaning the largest--new drug product for the company in the past few years,” said Steven B. Gerber, an analyst for Oppenheimer & Co. “And as the economic environment for pharmaceutical companies gets more difficult, new products become more important.”
Wall Street responded positively to the FDA approval, pushing Merck’s stock up despite a general market decline Monday. In composite trading on the New York Stock Exchange, Merck closed at $50.50, up $2.25.
However, Gerber and other analysts tempered their predictions of the drug’s success by noting that Merck’s own clinical trials indicated that most men received no symptomatic relief from Proscar.
That hesitation was echoed by many urologists, who said that while initial test results were positive, they were far from stunning.
“We’re all eager to see what can be done with Proscar,” said Dr. Brent Treiger, assistant professor of surgery/urology at the UCLA Medical Center. “But we’re concerned about possible misuse, and we recognize it’s not a panacea.”
Dr. Glenn Braunstein, chair of the department of medicine at Cedars-Sinai and a member of the FDA panel approving the drug, said Proscar is most likely to be successful when used in conjunction with other drugs now being tested.
The prostate gland, a chestnut-shaped organ that contributes to the flow of semen in men, is located just under the bladder. After the age of 50, the prostate enlarges in most men, making urination more painful and decreasing the flow of urine as it pushes into the bladder.
By age 75, at least half of all men experience some prostate inflammation. Severe cases are frequently treated surgically, at an estimated national cost of $3 billion.
Proscar works by reducing the body’s production of a hormone, dihydrotestosterone, which in turns regulates prostate growth.
While the drug did reduce the size of most men’s prostate in clinical trials, only 30% of patients experienced relief from their initial discomfort. That number compared to nearly 20% of patients who found relief by taking a placebo.
The FDA’s approval had been expected since February, when the agency gave Merck a preliminary sanction. However, the speed of the approval process--14 months since Merck filed a new drug application--did surprise many analysts, who took that as an indication of the company’s strong data.
Merck said Monday that Proscar would be available in late July at a wholesale price of $1.40 per tablet, or $511 for a year’s supply. The company planned to give new patients a month’s supply free and to offer an additional month’s supply for free every twelve months.
