Pharma launch adoption stall case - At Least the Kool Aid Tasted Good

New Product LaunchAdoption Stall Case Study(At Least the Kool Aid Tasted Good)

© Copyright The Customer Management Group 2014

The Case: Pre-launch

© Copyright The Customer Management Group 2014 3

The Love Affair BeginsDecember 6th 2001


Watson Establishes the Revenue Goal

The OAB market in the United States alone grew from just $40 million in 1997 to around $1 billion in 2002 (2400% growth)

$200 million peak annual sales demonstrates they are planning to be a 3rd /4th line agent.


How Can We Fail?“If all we get is a small percentage”


Does this not suggest a high rate of treatment failure?

Do physicians understand this?

To what degree do they care?

How does persistency impact Rx behavior?

Here’s a Problem


Our Solution!“We win… at least in a clinical trial”


We Win!“Or do we?”


How does this compare to the competition?

Detrol LA = 80% Reduction

6.25% worse performance versus Detrol LA

But Wait We Work!


Position on the Basis of Side Effects

Let me know when you are sure!?!?!

Oxybutynin is not the Gold Standard Detrol LA is.


Same Old Approach

Potential vs.Probable


Same Old Approach


Mass TargetingPotential versus Probable Targeting


The Mass Gets BiggerPotential versus Probable Targeting

The Case: The Launch


If we launch it they will come!

Traditional Approach:Pre-launch Promotion

Offensive Defensive

Guerilla Flanking

Offensive Defensive

Guerilla Flanking

Strategic MatrixStrategic Matrix

?

What problem is Oxytrol Targeting?

(x-sell)


Communication to PhysiciansPositioned as a First Line Therapy

Metric Placebo (n=114) Uni-Det (n=125) Oxytrol (n=122)

Mean incontinence episodes / day 5.0 to 2.9 -(42%) 5.0 to 1. (-80%) 4.7 to 1.9 (-60%)Complete continence 22% 39% 38%Micturition frequency decrease 1.4 episodes/day 2.2 episodes/day mean of 1.9 episodes/dayAverage void volume increase 32 mL/void 29 mL/voidQuality-of-life scores significantly improved significantly improvedsystemic adverse events 15 29 (23.2%) 23 (18.8%)Anticholinergic adverse effects 7.30% 4.10%Constipation 5.70% 3.30%Localized Skin Reactions 7 7 32 (26%)Treatment Discontinuation 2 (1.6%) 13 (10.7%)

12 (10%) due to skin

2% typical with Estraderm

Metric Placebo (n=114) Uni-Det (n=125) Oxytrol (n=122)

Mean incontinence episodes / day 5.0 to 2.9 -(42%) 5.0 to 1. (-80%) 4.7 to 1.9 (-60%)Complete continence 22% 39% 38%Micturition frequency decrease 1.4 episodes/day 2.2 episodes/day mean of 1.9 episodes/dayAverage void volume increase 32 mL/void 29 mL/voidQuality-of-life scores significantly improved significantly improvedsystemic adverse events 15 29 (23.2%) 23 (18.8%)Anticholinergic adverse effects 7.30% 4.10%Constipation 5.70% 3.30%Localized Skin Reactions 7 7 32 (26%)Treatment Discontinuation 2 (1.6%) 13 (10.7%)

12 (10%) due to skin

2% typical with Estraderm

However…However…

$200 million peak annual sales demonstrates they are $200 million peak annual sales demonstrates they are planning to be a 3rd / 4th line agent.planning to be a 3rd / 4th line agent.


Communication to Salesforce vs.Communication to Physicians


First Month

Oxytrol Promotion initiated in May 2003.

Good initial uptake!?


Early Warning Sign of TroubleEarly Warning Sign of Trouble

Seven weeks Post Launch (Mid June 2003)Source: Watson Pharma

2,299 Rxs1% NRx share

Friedman, Billings, Ramsey & Co - 10 July 2003

….the key catalyst for Watson`s upcoming quarterly results remains the Oxytrol launch (May 19) and overall earnings execution. Script numbers indicate that Oxytrol has achieved about 2.1% market share as of last week. This is a decent achievement, but sales (even including inventory build) likely won`t hit our estimate of $9M for Q2, part of which will be shifted to Q3.

Prescription Data for Specialty Companies: Week Ended Aug. 1

Source: Raymond James

Total prescriptions for Watson’s branded patch for incontinence, Oxytrol, were 2,791 in the week endedAugust 1, up from 2,605 the prior week. Watson launched Oxytrol in April and began promoting it in May.We project $35 million in 2003 Oxytrol sales this year, within a range of $25 million to $40 million thecompany is targeting.

Seven weeks Post Launch (Mid June 2003)Source: Watson Pharma

2,299 Rxs1% NRx share

Friedman, Billings, Ramsey & Co - 10 July 2003

….the key catalyst for Watson`s upcoming quarterly results remains the Oxytrol launch (May 19) and overall earnings execution. Script numbers indicate that Oxytrol has achieved about 2.1% market share as of last week. This is a decent achievement, but sales (even including inventory build) likely won`t hit our estimate of $9M for Q2, part of which will be shifted to Q3.

Prescription Data for Specialty Companies: Week Ended Aug. 1

Source: Raymond James

Total prescriptions for Watson’s branded patch for incontinence, Oxytrol, were 2,791 in the week endedAugust 1, up from 2,605 the prior week. Watson launched Oxytrol in April and began promoting it in May.We project $35 million in 2003 Oxytrol sales this year, within a range of $25 million to $40 million thecompany is targeting.

+21%, but…Re-fill RateIs low

ExperienceTrial Issue


2nd Month

Source: Goldman Sachs Annual Healthcare Conference June 2003

Evidence of Adoption Stall exists


Oxytrol brought in $23 million in revenues in 2003, which was well short of original expectations of $50 million….

The already-crowded market will become more so as two additional companies enter the fray later this year, which may well mean Watson won't sell $50 million worth of the drug this year either.

FY 2003 Results


7.1%

8.9%

3.8%

Under performing

3rd Month

Week ending March 15 2004

This Data suggest growth is due to category growth not organic growth


7.1%

8.9%

3.8%

1.4% Growth

Week endingApril 15 2004

(3.4%) Growth

4th Month


The Hole Get DeeperEarly 2004


As a result of this refocusing effort, the Company intends to terminate its contract sales force agreement with Ventiv Health, Inc. in the primary care area.

"As we approached the one year anniversary of the launch of OXYTROL(R), it was appropriate that we evaluate our efforts and assess the current competitive environment," continued Dr. Chao. "While we have had success with OXYTROL(R) in the specialty urology and OB/GYN markets, we have faced challenges in the primary care market."

This is Success?June 28th, 2004

Specialty TRx TRx Growth March April

URO 18,792 18,881 0.47%

OB/GYN 7,866 7,800 (0.83%)

PCP 17,043 17,639 3.49%

Specialty TRx TRx Growth March April

URO 18,792 18,881 0.47%

OB/GYN 7,866 7,800 (0.83%)

PCP 17,043 17,639 3.49%

??


Still Drinking the Kool AidJune 28th, 2004

2004 Sales Tracking

Q1 = $8.0 millionQ2 = $8.7 millionQ3 = Sales force reductions = sales probable revenue drop

2004 Sales Company Projection = $55 millionOur Projection = ~$33 million Revised Company Projection = $47 million

which requires 81% growth rest of year !?!?!

2004 Sales Tracking

Q1 = $8.0 millionQ2 = $8.7 millionQ3 = Sales force reductions = sales probable revenue drop

2004 Sales Company Projection = $55 millionOur Projection = ~$33 million Revised Company Projection = $47 million

which requires 81% growth rest of year !?!?!


NewsAugust 3rd, 2004


14% Growth

2% Growth

Since April 2004

Share Growth FLATCategory Growth

Sales Curve Dips After 17 MonthsSeptember 16th, 2004


Salesforce De-motivatedOctober 10th, 2004


Oxytrol(R) sales of $9.8 million for the three months and $24.3 million for nine months ended September 30, 2004

NewsOctober 27th, 2004


JP Morgan ConferenceJanuary 11th, 2005

0% Growth


Sales of Watson's OXYTROL(R) product increased $4.2 million to $13.8 million for the fourth quarter of 2004, compared to $9.6 million in the prior year period.

$23 million 2003 sales - $50 million target

$38.1 million 2004 sales - $1.4 billion US market 2004(3% share of revenue)

FY 2004 Results


FY 2004 ResultsNo Growth


Also in urology, our OXYTROL® productachieved $43 million in sales, a 13% increase from 2004.

FY 2005 ResultsShare Shrinks / Growth from re-fills

2005 OAB Mkt Stats

Market Size = $2.5 billionGrowth = 10.8%

2.2% Share 2.2% Organic Growth


FY 2006 / 2007 / Results

No Reported Sales

Brand segment selling and marketing expenses decreased during the year ended December 31, 2006 as compared to the prior year due to lower product spending for Oxytrol® during the current year.


2008 Results

Oxytrol (oxybutynin transdermal system) had annual sales of approximately $39 million in the U.S., based on IMS sales data ending August 2008 5 years post launch!

Pharma launch adoption stall case - At Least the Kool Aid Tasted Good

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