Friday, March 26, 1999
Duramed rides Cenestin rocket
Share value adds $5.38
BY RANDY TUCKER
The Cincinnati Enquirer
Shares of Duramed Pharmaceuticals almost doubled Thursday after the company won Food and Drug Administration (FDA) approval for its estrogen-replacement drug Cenestin.
News of the approval, which came after the close of markets Wednesday, drove the Pleasant Ridge-based company's share price as high as $17 in early trading. It closed at $12.38, up $5.38.
It was one of the most heavily traded stocks on U.S. markets, with more than 22 million shares changing hands — more than 92 times its three-month daily average, according to Bloomberg News.
The approval means Duramed can begin selling Cenestin as a treatment for symptoms of menopause, such as hot flashes.
But unlike other synthetic estrogen products — such as market leader Premarin with more than $1 billion in worldwide sales — Cenestin was not approved for long-term use, including the treatment of osteoporosis.
Duramed tried to get approval for a generic version of Premarin two years ago, but the FDA ruled that Premarin couldn't be duplicated because it wasn't clear which ingredients in Premarin are active.
Duramed shares lost more than half their value after the FDA decision in May 1997.
Duramed will market Cenestin as a direct competitor to Premarin, made by American Home Products Corp.
“This product is not intended to be a generic; it's intended to stand on its own two feet as a brand,” Duramed Chairman E. Thomas Arington said. The next step is getting Cenestin to market, Mr. Arington said.
The company is working on a marketing plan for launching Cenestin within 90 days that could involve signing a sales-and-distribution agreement with a Fortune 200 company.
“We've signed a letter of intent with somebody who will be a very strong partner in getting it into the doctors' offices and helping with the national distribution,” Mr. Arington said. “We expect to get the final agreement finished within the next few days.”
Mr. Arington said Cenestin would be competitively priced, although not as low as a generic drug.
He said the company is projecting Cenestin sales of $100 million within 15 to 18 months of introduction.
Such sales could be key to bringing the company back to prosperity. The company has lost money in each of the past three years.
But Mr. Arington emphasized that Duramed is not a one-drug company.
“Our major area of interest is women's health care, with specific focus within that frame of hormones,” he said. “Cenestin has been the centerpiece of our hormone product development program, but we've got seven other hormone products in the pipeline.“
Mr. Arington said the company's goal is to become a premier supplier of solid oral-dose hormone products.
“That's our real major focus, and our major thrust going forward will be brand products,” he said. But “we will continue to develop products and market products on the standard product side, specifically control-release products in the oncology area.”
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PEOPLE ON THE MOVE
