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Drugs giants eyeing $1bn sales of Viagra pill rival.

Byline: Steve Pain

Bayer and GlaxoSmithKline were yesterday eyeing a $1 billion (pounds 632 million) sales opportunity after winning US approval for anti-impotence pill Levitra -the first rival to Viagra in the world's top market.

The sex drug, which has already been approved in more than 50 countries, is expected to be available in pharmacies across the US within the next few weeks.

As a direct challenge to Pfizer's Viagra, Glaxo's product gives American men the first alternative in five years to the blue diamond-shaped pill. The green light from the Food and Drug Administration is seen as vital for Bayer whose sub-scale pharmaceuticals business is trying to recover from the disastrous withdrawal of cholesterol drug Baycol two years ago.

Shares in the German chemicals conglomerate were yesterday among leading blue chip gainers in Europe, up nearly two per cent.

'Levitra is crucial for Bayer as it is the only drug with blockbuster potential in its pipeline until 2006,' said Meng Si, analyst at Bankgesellschaft Berlin in Frankfurt.

Analysts said Levitra's approval had been widely expected and the fact it had been developed by Bayer researchers did little to underpin confidence in GSK's science.

GSK has acknowledged its pipeline of experimental drugs in late-stage development is thin but hopes to prove its laboratories still have what it takes to find blockbusters when it hosts a keenly-awaited R&D day in December.

Levitra is expected to be available in the United States in September, ahead of another challenger to Pfizer's Viagra, called Cialis, from Lilly-Icos.

Lehman Brothers estimates the new orange pill will achieve peak annual sales of $1.2 billion (pounds 759 million). GSK and Bayer hope to lure many of the millions of men suffering erectile dysfunction who have not sought treatment.

All three drugs are already competing in Europe, where Cialis was launched ahead of Levitra and had taken a share of around 27 per cent in Germany by mid-July against 14 per cent for Levitra, according to IMS Health data.

Bayer and GSK hope to beating Cialis to market with a major marketing blitz. Lawson Macartney, head of strategic management of GlaxoSmithKline's cardiovascular, metabolic and urology drugs, said there would be a 'substantial' launch to doctors, followed by a large direct-to-consumer advertising campaign.

Analysts said the approach reflected a belief that the market for impotence treatment has significant growth potential.

Viagra, Levitra and Cialis all work by blocking an enzyme called PDE-5, which affects blood flow. But their merits in terms of potency, speed and duration of action are hotly disputed.

Levitra's makers say a major plus is that it works quickly.

Macartney said pricing of Levitra will be competitive with Viagra. In Britain, Levitra costs the same as Viagra.

Pfizer said it believes it can handle the competition and plans no changes to its marketing of Viagra, which had 2002 sales of $1.74 billion (pounds 1.1 billion).

Shares in Glaxo fell 2p to 1,238p.

CAPTION(S):

Jean Pierre Garnier at the launch of the merged Glaxo Wellcome and SmithKline Beecham group
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:Aug 21, 2003
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