Newspaper article THE JOURNAL RECORD

Kansas City Drug Company Faces Competitive Future

Newspaper article THE JOURNAL RECORD

Kansas City Drug Company Faces Competitive Future

Article excerpt

By Debra Skadack

The Kansas City Star

KANSAS CITY, Mo. _ Thursday marks one of the most dreaded deadlines in the history of Kansas City business.

That's when the 10-year patent expires on a tiny, pale-colored tablet that has helped ease millions of chest pains _ and made thousands of Kansas Citians vastly rich.

Cardizem is the wildly successful heart pill that helped forge Marion Merrell Dow Inc. into one of the area's most important corporate citizens and its stock into one of the most beloved investments of the 1980s.

But on Thursday, the rules change. Manufacturers of cheaper, generic versions of the drug are free to sell their product.

Investors have wondered for years how Marion would exist beyond that day. The timing is not good. The company recently ran into new obstacles when the government requested new safety warnings on a popular Marion antihistamine. That sent its stock price tumbling. And a strong movement is afoot in Washington to put caps on pharmaceutical profits.

Although Marion has worked hard at diminishing the effects of generics by developing new forms and dosages of the heart drug, some on Wall Street wonder: Will Marion be able to switch Cardizem tablet customers to different forms of the drug that will have patent protection for years? And can the company ease the public's fear over the safety of Seldane? Will an easily accessible, over-the-counter form of Seldane ever make it to store shelves? Will Marion be able to make mounds of money on other drugs, such as the hugely successful nicotine patch?

"Marion seems to be falling into a group of drug companies that will have slight double-digit gains," said James Keeney, an analyst at Mabon Securities in Boston who has followed Marion for years. "Marion doesn't seem as well positioned as it once was."

Fred W. Lyons Jr., Marion's chief executive officer, said that despite the challenges, he hopes the company will double its sales by the year 2000 _ to $7 billion.

However, he admits these challenges are likely to make the Marion of the 1990s far different than what it was in the 1980s, when Cardizem was an undisputed medicine cabinet king and an investor's dream.

From the moment Marion got the go-ahead to sell Cardizem tablets, the Kansas City drug giant launched its counterattack for generics by developing other forms of the drug.

The company's laboring eventually spawned four different types of Cardizem, including a twice-a-day form to treat hypertension and an injectable form for irregular heartbeats.

But it's the newest formula, called Cardizem CD, that Marion plans to focus on, Lyons said.

Cardizem CD is a once-a-day capsule that can treat both angina and hypertension. Its patent protection will last until late December 1994.

Marion has launched an aggressive advertising campaign, touting the CD form as more convenient and cheaper to use than other forms of Cardizem. …

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