The champagne will have been flowing over the weekend at Eli Lilly after a US federal judge upheld the validity of the firm’s patents on Zyprexa (olanzapine), its anti-schizophrenia agent [[15/04/05a]], but this morning, the company’s strategists will be looking to see what can be done to halt the decline in sales of the drug.

The judge’s ruling means that Zyprexa will probably not face any generic erosion until 2011, though Ivax Corporation and Dr Reddy’s, the companies that are challenging Lilly’s Zyprexa patent along with Teva Pharmaceuticals, have already announced their intention to appeal. However, such an appeal could take a year or longer and most observers believe there is little likelihood of the judgement being overturned.

Good news for Lilly, but Lynda Lynch, Datamonitor’s central nervous system director, says that this will be “tainted by the fact that Zyprexa has said goodbye to its days of rapid growth.” She notes that weight gain and diabetes side effect concerns about the drug [[05/01/05c]], combined with increased competition, have led to declining sales of the product, and although Zyprexa still maintained a “relatively healthy” $2.93 billion in US revenues in 2004, that figure was down 8% on the previous year [[27/01/05a]].

Ms Lynch adds that the ruling provides Lilly with some breathing space to establish and grow sales of its two new psychiatry drugs, Strattera (atomoxetine) for attention deficit hyperactivity disorder and Cymbalta (duloxetine) for depression. Nevertheless, without a follow-up antipsychotic to capture the $4.4 billion global revenues it gets from Zyprexa, “the company will need to put everything into quickly growing sales of their broader psychiatry portfolio,” she says.

The Datamonitor report concludes by saying that “although immediate atypical generic incursion is put on hold, the market will still face a shake-up in the medium term,” thanks to the patent expiry expected in 2008 on Johnson & Johnson’s Risperdal (risperidone). However, “unlike Lilly, J&J has wisely invested in a promising follow-on antipsychotic, paliperidone,” Ms Lynch notes.

Lilly has what is generally regarded as one of the best pipelines in the pharmaceutical industry and it also believes the erosion of Zyprexa sales is slowing. The first-quarter results it publishes later today will reveal whether that optimism is well placed.