Eli Lilly in Deal to Reformulate Prozac to Extend Patent

Eli Lilly & Co., moving to shield Prozac from competition from generic drug makers, said Monday that it struck a deal with Sepracor Inc. for a reformulated version of the blockbuster antidepressant.

Sepracor, a small drug firm in Marlborough, Mass., is developing a molecularly altered version of Prozac with one chemical isomer instead of two, possibly reducing potential side effects and qualifying for separate patent protection.

If the new drug, which is still in clinical trials, makes it to market, Sepracor would get royalties from sales. But more important, Indianapolis-based Lilly could extend the exclusive patent on its most successful drug by a decade or more, industry analysts said.

Prozac generated nearly one-third of Lilly’s revenue of $7.2 billion in the first nine months of 1998.

The drug’s patent, which prohibits others from manufacturing it, expires in two stages in 2001 and 2003.

Sepracor’s stock fell $3.13 to close at $84.88 on Nasdaq, while Lilly added 81 cents to close at $86.94 on the New York Stock Exchange.