Lilly, Sepracor Cleared for Prozac Deal

Eli Lilly & Co. said it won regulatory approval for its licensing agreement with Sepracor Inc. for a new and improved version of the popular antidepressant Prozac. Shares of both companies jumped on the news. Lilly spokesman Ed West said the Federal Trade Commission determined that the licensing agreement can go forward despite concerns raised by a competitor hoping to introduce a generic version of the drug. The new version of the drug is still in development and is not expected to be introduced until 2002. In 1998, Lilly paid $90 million plus sales royalties to Marlborough, Mass.-based Sepracor for the right to sell a modified form of Prozac promising a more effective treatment for depression, with fewer side effects. Bruce Downey, president of Barr Laboratories, a Pomona, N.Y., generic-drug maker that has challenged Prozac’s patent in court, said he had asked the FTC to investigate the Lilly-Sepracor deal. Downey charged that the deal is an attempt by Lilly to undercut the coming U.S. market for cheaper, generic versions of Prozac that already are sold in some foreign countries. Sepracor shares jumped $16.25, or 24%, to close at $85 on Nasdaq, while Lilly rose $4.88 to close at $70 on the Big Board.