Times may be tough, but apparently not tough enough--at least, not yet--for American men to sacrifice their virility.
A few months ago, during the last earnings season, I put forth an anecdotal theory that the weak economy may be leading to flaccid sales of the expensive pills for erectile dysfunction (ED). But this earnings season's results show that impotence drug sales may be more resilient than I thought.
Earlier this week Pfizer (NYSE:PFE) reported that Viagra sales went up 13 percent from the third quarter of last year to the third quarter of this year. Not only that, but U.S. revenue from the little blue pill climbed sequentially (from the second quarter of this year to the third quarter) from $199 million to $236 million. That's not all new business, much of the increase probably comes from a price increase, but even that flies in the face of a report in The New York Times Wednesday about people giving up or cutting back on their meds in this economy. Even though docs and the companies will tell you impotence could be a symptom of serious medical problems, ED drugs are considered so-called lifestyle, elective products. So, the fact that guys are paying even more for them these days may say something.
Then, yesterday morning, Eli Lilly (NYSE:LLY) reported that U.S. revenue from Cialis jumped 20 percent quarter over quarter and rose $12 million sequentially. Here, too, on the conference call officials acknowledged most of that comes from a price hike and not so much from more demand. They also said Cialis's market share inched up 1.4 percent in the quarter in part due to the recent launch of a one-a-day version of the drug. And for those who think direct-to-consumer advertising doesn't work, LLY said since it started running commercials for one-a-day Cialis, its market share bumped up another .06 percent. Even sales of little Levitra co-owned by GlaxoSmithKline (NYSE:GSK), Schering-Plough (SGP), and Bayer (BAY) crept up ever so slightly. Maybe it's all part of the whole cocooning, stay-at-home, go out less thing.