Wyeth is seeing some stabilization in the Premarin franchise despite a 40% drop in prescriptions for Prempro and a 15% decline in Premarin scripts since release of the Women's Health Initiative study results.

"We've seen this franchise stabilize and we have a lot of reason for confidence as to why that should continue," CFO Kenneth Martin told a Sept. 27 earnings call.

The company announced that it expects a revenue shortfall of $300 mil. in the second half of 2002 due to the decline in Premarin family sales.

Martin emphasized that there is a lot of uncertainty in forecasting how the franchise will fare. "We're two months into this situation....We've done our best to estimate the impact on this calendar year, but we could be off by $50 mil., certainly either way on that number," he said.

CEO Robert Essner said the company is taking "a number of steps" to support its hormone replacement therapy franchise. Wyeth has "resumed professional education and promotional programs for Premarin and Prempro," he said. "We also plan to communicate more broadly with patients. Currently we are conducting research and developing consumer communication strategies."

The company is looking forward to public meetings on the WHI study this fall to allow consideration of "the full body of data on HRT and the clinical needs of women for these products," Essner said. "We plan to participate fully in the meetings on HRT."

The National Institutes of Health has planned a meeting on the results of the WHI study of Prempro (progestin/medroxyprogesterone) (¹ 'The Pink Sheet' Aug. 26, In Brief). HHS will also hold a meeting on the study data this fall (² Also see "Wyeth Prempro Updated Label Submission Soon; HHS To Discuss WHI Results" - Pink Sheet, 19 August, 2002., p. 11).

The Prempro arm of the trial was halted in July after a finding of an increased risk of breast cancer and cardiovascular events in study participants (³ Also see "Prempro Cancer Risk Addressed In 550,000 Physician Letters, Label Review" - Pink Sheet, 15 July, 2002., p. 11).

Wyeth issued revised earnings guidance for 2002, including a $.33-$.43 decline in diluted earnings per share, based on the Premarin family drop-off and several other factors.

The company expects its injectable flu vaccine FluShield to miss 2002 earnings projections by $100 mil. and its Prevnar pneumococcal conjugate vaccine to miss by $100 mil.-$150 mil.

"We have now produced our projected quantity of FluShield," Essner said. "However this year, in contrast to previous years, other flu vaccine manufacturers have already covered much of the demand for injectable flu vaccine. Thus, our ability to sell all our capacity at the projected price for this season will be compromised."

While the company has resolved its bulk vaccine supply issues for Prevnar, recent fill/finish process interruptions are expected to stall the return of supply to normal.

"Very recently, we have encountered problems on the fill and finish side of manufacturing," Essner said. "These delays jeopardize our ability to release enough Prevnar doses this calendar year to meet earlier projections."

Prevnar has been in shortage since fall 2001. Wyeth is working to secure contract manufacturers for the product and is building a second fill/finish line (⁴ Also see "Wyeth Prevnar Capacity Expansion Planned For 2003; Shortage Until Then" - Pink Sheet, 29 April, 2002., p. 33). The company does not expect the Prevnar shortage to be resolved until after mid-year 2003.

Wyeth also announced two "unusual items" that will impact earnings numbers for the third quarter: a gain relating to the Amgen acquisition and a one-time charge to increase Redux liability reserves.

The company will record an approximate $1 bil. gain in cash from its Amgen acquisition, plus fair value of over 98 mil. of Amgen shares received, about $2.5 mil.

The gain will help offset a charge of $1.4 bil. to increase the reserve of funds for litigation related to its withdrawn diet drug Redux. "The principal reason for this charge is that the volume and size of the claims filed in the nationwide diet drug settlement have been greater than anticipated," Wyeth said. Charges for the reserve now total $14.6 bil.

The company noted it may consider a "restructuring charge" as part of "the cost management process," which would be recorded in the fourth quarter.

Premarin/Prempro Rxs Stabilize; Wyeth Predicts $300 Mil. Drop In 2nd Half

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