Searle's Revival: Celebra May Double Company's Sales

Strategic Insights -

In a stunning reversal, pharmaceutical company G.D. Searle & Co. is poised for a major comeback, thanks to its new arthritis medication, Celebra. Despite years of criticism from analysts and investors, Celebra's promising test results have the medical community and Wall Street singing a new tune. With a potential $4 billion to $5 billion in annual sales within five years, Searle is eyeing a significant increase in revenue. The company's shift in focus to five key areas, including arthritis, heart disease, and cancer, has paid off, with pain-treatment sales jumping more than fivefold in five years.

Key Takeaways:

  • Searle's new arthritis medication, Celebra, may double the company's sales in a few years, according to Monsanto executives.
  • Celebra offers the same painkilling power as other arthritis drugs but with fewer side effects, such as stomach pain or ulcers.
  • The COX-2 inhibitors class, which includes Celebra, could achieve $4 billion to $5 billion in annual sales within five years, according to Paul A. Brooke, a drug industry analyst.
  • Searle leads the COX-2 race and will submit its application to the FDA this summer, with Merck & Co. close behind.
  • The company has shed some projects to focus on five areas, including arthritis, heart disease, and cancer.
  • Searle has enlisted the help of Pfizer, a Japanese company, and other partners to aid in marketing and sales efforts.
  • The unpredictability of the FDA approval timetable and potential label disputes pose challenges for Searle.

Statistics:

  • Last year's sales at Searle were $2.4 billion.
  • Searle's research and development expenses last year accounted for 26% of its sales.
  • By the end of 1998, Searle will spend $750 million on research and development.
  • Celebra's initial price is estimated to be $2.15 daily.
  • Daily costs for brand-name NSAIDs range from $1.60 to $2.62.
  • Over 12,000 people have been tested with Celebra.

Sources:

  • Paul A. Brooke, a drug industry analyst for Morgan Stanley Dean Witter
  • Douglas B. Groh, an analyst for Merrill Lynch Global Securities in New York
  • Richard U. De Schutter, a vice chairman of Monsanto and president of Searle
  • Morgan Stanley Dean Witter report
  • SmithKline Beecham promotional materials