Jones Lang LaSalle
Hoping for a Blockbuster
By STEPHANIE SAUL
When GlaxoSmithKline began talking to Roche three years ago about commercializing the prescription diet drug Xenical, the timing could not have been better for Steven L. Burton.
An executive with Glaxo's consumer heath care division, Mr. Burton had been overweight for years, carrying 270 to 275 pounds on his 6-foot-1 frame. Those measurements put him well into the "obese" category, a condition shared by 30 percent of American adults. And his doctor had just issued a stern warning to Mr. Burton.
"I didn't think seriously about a serious weight-loss program until I had a couple of kids and I had a doctor who was telling me pretty bluntly that it was time to do something about my blood pressure and high cholesterol and weight for the sake of my kids," he said recently. "That's pretty motivating."
Now Mr. Burton, 47, has the job of motivator in chief as Glaxo prepares to market an over-the-counter version of Xenical. During the last three years, while ramping up the marketing plans, he has been using the drug himself. And while he does not envision himself posing for the before and after shots in a diet ad, he can offer personal testimony to the drug's potential benefits. In his three years on Xenical, Mr. Burton said he has dropped to 210 pounds from 270, and kept it off.
Those results, he warns, are better than the drug's typical user will achieve because he has been particularly faithful to his regimen of exercise and diet. But he can hope his dieting success and good luck carry over to the challenge of turning the drug into a successful over-the-counter weight-loss product.
Xenical, sold by Roche in the United States since 1999, has had only moderate success as a prescription drug in this country.
Part of the problem has been what Mr. Burton refers to as the "oops" factor — the drug's potentially embarrassing side effects. They can include diarrhea, flatulence and episodes of incontinence.
The drug's popularity has also been hampered by the only moderate and, sometimes, fleeting, weight loss it typically yields — and the fact that many insurance companies do not cover its use.
But Glaxo, which paid Roche $100 million and an undisclosed share of future revenue for over-the-counter rights to Xenical, is betting that Mr. Burton and his team can make a consumer version an attractive option for many of the two-thirds of Americans who are overweight. At stake is a piece of the estimated $15 billion annual market for weight-loss drugs and products.
"Even a small percentage of that market is going to be a significant commercial opportunity," said Mr. Burton, who is vice president for weight-control products in the consumer health care unit.
Mr. Burton already has a track record in such efforts. Although he was never a smoker, he led Glaxo's successful over-the-counter introduction of the smoking-cessation products NicoDerm patch and Nicorette gum, which were sold only by prescription until 1996.
For Xenical, the Food and Drug Administration recently issued what is known as an "approvable" letter for over-the-counter sale of the drug, which Glaxo plans to market under the trade name Alli (pronounced al-EYE.)
The F.D.A. letter means the agency wants more information before the product gets final clearance. It can sometimes take weeks, months or — in some cases — years to answer those F.D.A. questions. Still, Mr. Burton said he was optimistic that Alli would be on drugstore shelves this year and at a price affordable to most Americans: $2 to $3 a day.
Drug companies increasingly are turning to over-the-counter versions of their brands to extend the product life and generate steady cash flow. But for a prescription drug to be cleared for over-the-counter sales, it must be proved safe even when misused by careless consumers. It is not rare to sink millions into a switch only to be rejected by the F.D.A.
Merck and Johnson & Johnson experience that last year when an F.D.A. advisory panel voted against their plan for the over-the-counter sale of Mevacor, a cholesterol-lowering drug. Glaxo recently abandoned an idea to take the nasal spray Flonase over-the-counter, following speculation that the F.D.A. would be reluctant to approve the commercial sale of a synthetic steroid-based spray.
Even if it receives final F.D.A. clearance, the gamble for Glaxo will be particularly uncertain given Xenical's marketing history. Despite its reputation as generally safe, and evidence that it helps people lose at least some weight, the product never became the blockbuster once envisioned.
Steven Francesco, who operates Francesco International, a pharmaceutical consulting business based in South Orange, N.J., said, "It never went very far on the prescription side, partly because they couldn't get reimbursement." Diet drugs are generally not reimbursed by insurance companies.
And diet drugs carry heavy negative image connotations, as a category that has included some of the most colossal failures of the pharmaceutical industry.
Nearly 10 years after the drug Redux was withdrawn, for example, the maker, Wyeth, is only now drawing near the close of $21 billion in litigation over Redux — which was half of the diet combination known as fen-phen that was found to damage heart valves and cause pulmonary hypertension.
Xenical has a generally clean safety record. But the consumer watchdog group Public Citizen recently called for its withdrawal, citing research that some scientists say links the drug to colon changes that can be precursors to formation of polyps and colon cancer.
A Glaxo company spokeswoman, Malesia A. Dunn, said long-term testing in humans had demonstrated no increased risk of colon cancer in the drug's users.
Despite Xenical's moderate success as a prescription drug, Mr. Francesco said that some lackluster prescription products had better potential on the over-the-counter market, where they can be sold in attractive packaging from drugstore aisles rather than dispensed by a pharmacist in amber plastic bottles. Xenical might be one of those.
"There are a lot of marketing opportunities for this on the consumer side which aren't available on the prescription side," Mr. Francesco said. "Glaxo paid a fortune. They saw the potential because they saw the benefits to a complete program."
Another industry marketing consultant, Gaurav Kapoor of the New England Consultancy Group in Westport, Conn., said that Glaxo's understanding of the consumer market should not be underestimated. "Obviously, Steve's no dummy," Mr. Kapoor said. "He's got a whole group who's doing a lot of research on this."
At Glaxo, Mr. Burton envisions Alli being sold at free-standing drugstore kiosks along with a colorful kit containing 250-page booklets with diet advice and meal plans, calorie counters and dining-out guides. Consumers would also be able to sign up for a free online behavioral support program, along with e-mail newsletters and chat rooms where people can trade stories of their diet successes and lapses.
Already, the company has started a Web site, QuestionEverything.com, where dieters can post comments and take part in surveys — an advance look at what the Web-based marketing might look like.
Full details of the Alli marketing plans have not been released. But if past is prologue, here is a clue: Shortly after the introduction of Nicorette and NicoDerm, Glaxo's NicoVan traveled the country advising patients on how to quit smoking. The products quickly grabbed 90 percent of the $575 million smoking-cessation market.
Emphasizing that the drug is not a magic pill, Mr. Burton said the company would look for committed consumers — those who are ready to make long term changes in the way they eat and exercise.
Mr. Burton also said the campaign would very clearly warn consumers about the drug's side effects, like flatulence and diarrhea, that become worse when the drug is taken along with a high-fat meal.
"I'll never forget having a fish sandwich and loading it up with tartar sauce and having French fries," Mr. Burton recalled. Luckily for Mr. Burton, what he refers to as his "classic oops" episode happened on a Saturday when he was running errands, not during an important meeting. So he simply ran home to change clothes.
The drug works by blocking the absorption of fat in the intestine, meaning that about one-third of the fat a user eats is never absorbed — the reason a high-fat diet can cause problems.
Restricting the amount of fat eaten helps control the problems to some degree.
A diet devoid of fat, though, would make the pill largely superfluous.
So Glaxo's approach will emphasize discipline, rather than deprivation. For example, consumers taking Alli would be instructed that when eating at an Italian restaurant, chicken Marsala is a better choice than stuffed manicotti. "Fettuccine Alfredo probably is a poor choice," Mr. Burton said.
The big questions are whether, with all the competing diet potions, foods and programs, Glaxo can generate enough interest in Alli and, even if so, whether the product will have staying power.
"You can guarantee it will be a full army of effort," said Mr. Francesco, who predicts a major advertising campaign. "Weight reducers tend to be passionate and then burn out, then they go to the latest and greatest. This could hit a potential $500 million a year, then sink like a stone. Or maybe it is something that can be sustained."
One reason for doubt is that in a Glaxo study of patients taking Xenical at over-the-counter dosage, about 3 percent of the users quit because of the side effects.
That is why, Mr. Burton said, "we have to go out of our way to make sure people understand how the product works."
"That's part of the honesty, the bluntness, the candor that we're going to put into our communications," he said. "If you don't stay with this program, you're at risk for things like having to go to the restroom more frequently," he added. "We don't want people to be surprised."
Hoping for a Blockbuster
By STEPHANIE SAUL
When GlaxoSmithKline began talking to Roche three years ago about commercializing the prescription diet drug Xenical, the timing could not have been better for Steven L. Burton.
An executive with Glaxo's consumer heath care division, Mr. Burton had been overweight for years, carrying 270 to 275 pounds on his 6-foot-1 frame. Those measurements put him well into the "obese" category, a condition shared by 30 percent of American adults. And his doctor had just issued a stern warning to Mr. Burton.
"I didn't think seriously about a serious weight-loss program until I had a couple of kids and I had a doctor who was telling me pretty bluntly that it was time to do something about my blood pressure and high cholesterol and weight for the sake of my kids," he said recently. "That's pretty motivating."
Now Mr. Burton, 47, has the job of motivator in chief as Glaxo prepares to market an over-the-counter version of Xenical. During the last three years, while ramping up the marketing plans, he has been using the drug himself. And while he does not envision himself posing for the before and after shots in a diet ad, he can offer personal testimony to the drug's potential benefits. In his three years on Xenical, Mr. Burton said he has dropped to 210 pounds from 270, and kept it off.
Those results, he warns, are better than the drug's typical user will achieve because he has been particularly faithful to his regimen of exercise and diet. But he can hope his dieting success and good luck carry over to the challenge of turning the drug into a successful over-the-counter weight-loss product.
Xenical, sold by Roche in the United States since 1999, has had only moderate success as a prescription drug in this country.
Part of the problem has been what Mr. Burton refers to as the "oops" factor — the drug's potentially embarrassing side effects. They can include diarrhea, flatulence and episodes of incontinence.
The drug's popularity has also been hampered by the only moderate and, sometimes, fleeting, weight loss it typically yields — and the fact that many insurance companies do not cover its use.
But Glaxo, which paid Roche $100 million and an undisclosed share of future revenue for over-the-counter rights to Xenical, is betting that Mr. Burton and his team can make a consumer version an attractive option for many of the two-thirds of Americans who are overweight. At stake is a piece of the estimated $15 billion annual market for weight-loss drugs and products.
"Even a small percentage of that market is going to be a significant commercial opportunity," said Mr. Burton, who is vice president for weight-control products in the consumer health care unit.
Mr. Burton already has a track record in such efforts. Although he was never a smoker, he led Glaxo's successful over-the-counter introduction of the smoking-cessation products NicoDerm patch and Nicorette gum, which were sold only by prescription until 1996.
For Xenical, the Food and Drug Administration recently issued what is known as an "approvable" letter for over-the-counter sale of the drug, which Glaxo plans to market under the trade name Alli (pronounced al-EYE.)
The F.D.A. letter means the agency wants more information before the product gets final clearance. It can sometimes take weeks, months or — in some cases — years to answer those F.D.A. questions. Still, Mr. Burton said he was optimistic that Alli would be on drugstore shelves this year and at a price affordable to most Americans: $2 to $3 a day.
Drug companies increasingly are turning to over-the-counter versions of their brands to extend the product life and generate steady cash flow. But for a prescription drug to be cleared for over-the-counter sales, it must be proved safe even when misused by careless consumers. It is not rare to sink millions into a switch only to be rejected by the F.D.A.
Merck and Johnson & Johnson experience that last year when an F.D.A. advisory panel voted against their plan for the over-the-counter sale of Mevacor, a cholesterol-lowering drug. Glaxo recently abandoned an idea to take the nasal spray Flonase over-the-counter, following speculation that the F.D.A. would be reluctant to approve the commercial sale of a synthetic steroid-based spray.
Even if it receives final F.D.A. clearance, the gamble for Glaxo will be particularly uncertain given Xenical's marketing history. Despite its reputation as generally safe, and evidence that it helps people lose at least some weight, the product never became the blockbuster once envisioned.
Steven Francesco, who operates Francesco International, a pharmaceutical consulting business based in South Orange, N.J., said, "It never went very far on the prescription side, partly because they couldn't get reimbursement." Diet drugs are generally not reimbursed by insurance companies.
And diet drugs carry heavy negative image connotations, as a category that has included some of the most colossal failures of the pharmaceutical industry.
Nearly 10 years after the drug Redux was withdrawn, for example, the maker, Wyeth, is only now drawing near the close of $21 billion in litigation over Redux — which was half of the diet combination known as fen-phen that was found to damage heart valves and cause pulmonary hypertension.
Xenical has a generally clean safety record. But the consumer watchdog group Public Citizen recently called for its withdrawal, citing research that some scientists say links the drug to colon changes that can be precursors to formation of polyps and colon cancer.
A Glaxo company spokeswoman, Malesia A. Dunn, said long-term testing in humans had demonstrated no increased risk of colon cancer in the drug's users.
Despite Xenical's moderate success as a prescription drug, Mr. Francesco said that some lackluster prescription products had better potential on the over-the-counter market, where they can be sold in attractive packaging from drugstore aisles rather than dispensed by a pharmacist in amber plastic bottles. Xenical might be one of those.
"There are a lot of marketing opportunities for this on the consumer side which aren't available on the prescription side," Mr. Francesco said. "Glaxo paid a fortune. They saw the potential because they saw the benefits to a complete program."
Another industry marketing consultant, Gaurav Kapoor of the New England Consultancy Group in Westport, Conn., said that Glaxo's understanding of the consumer market should not be underestimated. "Obviously, Steve's no dummy," Mr. Kapoor said. "He's got a whole group who's doing a lot of research on this."
At Glaxo, Mr. Burton envisions Alli being sold at free-standing drugstore kiosks along with a colorful kit containing 250-page booklets with diet advice and meal plans, calorie counters and dining-out guides. Consumers would also be able to sign up for a free online behavioral support program, along with e-mail newsletters and chat rooms where people can trade stories of their diet successes and lapses.
Already, the company has started a Web site, QuestionEverything.com, where dieters can post comments and take part in surveys — an advance look at what the Web-based marketing might look like.
Full details of the Alli marketing plans have not been released. But if past is prologue, here is a clue: Shortly after the introduction of Nicorette and NicoDerm, Glaxo's NicoVan traveled the country advising patients on how to quit smoking. The products quickly grabbed 90 percent of the $575 million smoking-cessation market.
Emphasizing that the drug is not a magic pill, Mr. Burton said the company would look for committed consumers — those who are ready to make long term changes in the way they eat and exercise.
Mr. Burton also said the campaign would very clearly warn consumers about the drug's side effects, like flatulence and diarrhea, that become worse when the drug is taken along with a high-fat meal.
"I'll never forget having a fish sandwich and loading it up with tartar sauce and having French fries," Mr. Burton recalled. Luckily for Mr. Burton, what he refers to as his "classic oops" episode happened on a Saturday when he was running errands, not during an important meeting. So he simply ran home to change clothes.
The drug works by blocking the absorption of fat in the intestine, meaning that about one-third of the fat a user eats is never absorbed — the reason a high-fat diet can cause problems.
Restricting the amount of fat eaten helps control the problems to some degree.
A diet devoid of fat, though, would make the pill largely superfluous.
So Glaxo's approach will emphasize discipline, rather than deprivation. For example, consumers taking Alli would be instructed that when eating at an Italian restaurant, chicken Marsala is a better choice than stuffed manicotti. "Fettuccine Alfredo probably is a poor choice," Mr. Burton said.
The big questions are whether, with all the competing diet potions, foods and programs, Glaxo can generate enough interest in Alli and, even if so, whether the product will have staying power.
"You can guarantee it will be a full army of effort," said Mr. Francesco, who predicts a major advertising campaign. "Weight reducers tend to be passionate and then burn out, then they go to the latest and greatest. This could hit a potential $500 million a year, then sink like a stone. Or maybe it is something that can be sustained."
One reason for doubt is that in a Glaxo study of patients taking Xenical at over-the-counter dosage, about 3 percent of the users quit because of the side effects.
That is why, Mr. Burton said, "we have to go out of our way to make sure people understand how the product works."
"That's part of the honesty, the bluntness, the candor that we're going to put into our communications," he said. "If you don't stay with this program, you're at risk for things like having to go to the restroom more frequently," he added. "We don't want people to be surprised."
posted by Jones Lang LaSalle NJ News Blog at 11:31 AM
<< Home