Lexapro Switch Takes New Twist: Forest Launching Celexa Generic In 2005

Forest plans to launch a generic version of its antidepressant Celexa in early 2005.

"We do assume that we will launch our own generic...in the fourth quarter of fiscal 2005," President Kenneth Goodman said on an Oct. 14 investor call. Forest's fiscal year 2005 will end on March 31, 2005.

Forest's decision to launch a citalopram generic is the latest part of the company's strategy to retain as great a share of the selective serotonin reuptake inhibitor class as possible as Celexa's exclusivity expires. Citalopram pediatric exclusivity ends in January 2004, after which generic companies can file ANDAs. Forest expects generic approval 12 months later.

Ahead of generic entry, Forest has stepped up efforts to switch patients from Celexa to the follow-on SSRI Lexapro (escitalopram), with sales reps now actively converting scripts to Lexapro (¹ (Also see "Forest Lexapro Strategy Changes: Reps Encouraging Switches From Celexa" - Pink Sheet, 21 Jul, 2003.), p. 25).

"We were paying our reps at one point on franchise growth, which would cause them to want to protect Celexa writers," Goodman said. "They are now being paid purely on Lexapro growth, so they no longer will protect those writers."

"Our representatives in the past have had to sell through Celexa, and therefore had to be cautious not to denigrate Celexa in any way in order to do that. And now that they have all of the competitive data sets, they will no longer have to sell in that fashion."

Forest is arming its sales team with data from comparison studies of Lexapro versus Wyeth's Effexor , Pfizer's Zoloft and GlaxoSmithKline's Paxil . Efficacy data on patients who have failed Celexa will also be detailed by Lexapro sales reps.

Managed care contract expirations will also play a large role in switching patients, with 99% of contracts expiring (and not being renewed) in January.

"The contracts on Celexa are going to expire, which is going to be a managed care impetus to move more patients to Lexapro, since it is already at a significantly reduced price, to which you add in one case getting rebates, in one case not getting rebates."

Forest expects most payors will downgrade Celexa to third-tier status based on the loss of rebates. "At this point in time, we've had no real indication from managed care about purposefully keeping Celexa in tier two," Goodman said.

However, "there will be plans that keep Celexa in tier two. Not every plan, because they lose the rebate, will necessarily force patients to pay [more] by changing its tier," he added. "That will be done by some plans who want to recoup the lost rebates by charging more to the patients."

By the time generic citalopram enters the market, Forest hopes to have reduced Celexa's revenue run rate to $300 mil.-$500 mil. (² (Also see "Forest Counting On Memantine, Benicar, To Bolster Growth Post-Celexa  " - Pink Sheet, 28 Apr, 2003.), p. 33). Celexa's sequential sales were down $2 mil. in the fiscal second quarter to $283 mil., while Lexapro's sales were up 20% to $232 mil.

Goodman said he was "pleased" with Celexa's market share decline to date, noting that Lexapro passed Celexa in terms of total prescriptions for the first time in August. "We have basically cut in half Celexa's market share, share that took us over four years to build."

"We expect that the advent of new data and new indications for Lexapro will continue to erode share for Celexa as physicians are presented with additional points of differentiation between the two products," Goodman told analysts.

Forest considers generalized anxiety disorder to be the most important anxiety indication for Lexapro. The company received an "approvable" letter for GAD in September, but still plans to launch the indication in early 2004 on schedule (³ 'The Pink Sheet' Oct. 6, 2003, In Brief).

"To the extent that we get the other anxiety indication of panic and [social anxiety disorder] subsequently, will only strengthen our ability to gain share within that portion of the marketplace," Goodman said. Forest is planning an early 2004 filing for social anxiety disorder; a panic disorder application is pending.

Forest is also facing the approval of Lilly's serotonin and norepinephrine reuptake inhibitor Cymbalta in the fourth quarter. FDA issued a second "approvable" letter for duloxetine for depression, pending manufacturing issues and labeling negotiations (⁴ 'The Pink Sheet' Oct. 6, 2003, In Brief).