Panel’s Advice Poses Threat to Ulcer Drugs : Medicine: Experts convened by the National Institutes of Health recommend antibiotics to treat the condition.
The $7-billion market for drugs that ease ulcer symptoms is under threat after medical experts recommended that the condition be treated with antibiotics, which provide a cheaper, quicker alternative. The recommendation, made Wednesday by an independent panel convened by the National Institutes of Health, is supported by evidence that shows ulcers are caused by the bacterium H. pylori and therefore can be treated with antibiotics or a combination of antibiotics and ulcer drugs.
Analysts were divided over how much of a negative impact the recommendation will have on the companies that make ulcer drugs, which decrease the amount of acid in the stomach. Experts predict that the decline in sales of ulcer medications could range from 5% to up to 40% over time.
“There are so many variables, we don’t know how much of an impact it’s going to have,” said Hemant Shah, an analyst who heads H.K.S. & Co. in Warren, N.J. “But one thing is certain: It’s going to be negative.”
The market is dominated by three pharmaceutical giants: Glaxo Inc., maker of Zantac, the world’s best-selling drug, with global sales in excess of $3 billion; Merck & Co., maker of Pepcid and Prilosec, whose combined sales total about $1.3 billion, and SmithKline Beecham, maker of $1-billion-a-year Tagamet.
These drugs, more costly than antibiotics, are often taken for months or years. Antibiotic therapy is short-term in nature, perhaps just a few weeks. Antibiotics are also cheaper, and generic equivalents of them, which are cheaper still, are more likely to be available.
The link between ulcers and H. pylori is not new. Two Australian physicians identified the bacterium in 1983 in patients with ulcers and gastritis. Experts say the most likely course of therapy would combine antibiotic drugs with current ulcer medications. Still, that would cut short the length of time a patient would need an antisecretory medication.
Ronald Nordmann, an analyst with Paine Webber Inc., predicted that the impact on ulcer drug sales would be fairly modest, mainly because the drugs are used for many other conditions, such as heartburn.
But investors weren’t as confident. On the New York Stock Exchange, Glaxo, whose shares trade as American Depositary Receipts, fell 87.5 cents to $18.25 on Thursday. SmithKline’s shares sank $1.25 to $29.625, while Merck stock was unchanged at $34.875 a share.
As the market leader, Glaxo would appear to have the most to lose. But Glaxo spokeswoman Nancy Pekarek said that “it’s hard to say what the (recommendation) means.”
