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Executive Summary

Sandoz will develop OTC ranitidine for the U.S. and have exclusive marketing rights to the product under an agreement in principle with Glaxo disclosed Dec. 22. In exchange, Glaxo receives U.S. comarketing rights for the twice-a-day calcium channel blocker DynaCirc (isradipine). "Subject to FDA approval, DynaCirc is expected to be available in the U.S. in 1988 [where] it will be distributed and marketed by Sandoz and copromoted with Glaxo," the release states. "After the OTC formulation of ranitidine passes the FDA approval process, Glaxo will obtain the exclusive U.S. license to isradipine and the tradename DynaCirc. The two companies will then continue to copromote DynaCirc with marketing and distribution in the U.S. to be handled by Glaxo." Glaxo's decision to license the OTC rights to its highly successful anti-ulcer product Zantac follows by about six months a similar move by SmithKline involving OTC cimetidine (Tagamet). Last June, SmithKline gave Bristol-Myers the U.S. comarketing rights to OTC cimetidine in exchange for a second-generation H[2] antagonist under development by Bristol-Myers. Both Glaxo and SmithKline are looking to build the consumer market for ranitidine and cimetidine before the expiration of the two drugs' patents. Glaxo's move is an attempt to keep abreast of SmithKline and Bristol. It also reflects the vogue in the pharmaceutical industry toward cross licensing arrangements as a way of creating greater marketing leverage. The release notes that OTC ranitidine will not carry the Zantac name, which will be reserved for the Rx product. However, the Glaxo/Sandoz deal has several differences. Glaxo says it has no OTC business either in or outside the U.S., and apparently is not interested in establishing one. Consequently, Sandoz has all product development and marketing responsibility for OTC ranitidine. SmithKline, which is developing its OTC cimetidine product in-house, has retained comarketing rights for its OTC business. "Glaxo's strengths are clearly and purposefully targeted in the prescription medicine field," Glaxo Inc. President Ernest Mario stated. "For that reason, we looked to a company with a proven track record in the consumer products area. Sandoz clearly demonstrates that particular marketing strength." More specifically, Sandoz gives Glaxo an established OTC marketer with experience in the gastrointestinal area. However, the principal Sandoz gastrointestinal products, Gas-X and the Ex-Lax line, are targeted at conditions that would not conflict with OTC ranitidine. Bristol-Myers, on the other hand, currently markets no gastrointestinal products, either OTC or prescription. With DynaCirc, Glaxo gets its first calcium channel blocker and a chance to expand its cardiovascular presence beyond the Trandate (labetalol) line, which is comarketed in the U.S. by Shering Schering under the Normodyne brand name. Sandoz filed a hypertension NDA for DynaCirc in December 1985. "Glaxo is firmly committed to the cardiovascular market, so we are pleased that a calcium antagonist will join our existing product line for our sales force to promote to physicians," Mario remarked. In addition to providing the Sandoz consumer products group (formerly Dorsey Labs) with a top-notch product for the future, the Glaxo agreement gives Sandoz an opportunity to build a presence in the cardiovascular area to prepare for its R&D pipeline. Sandoz has a second calcium antagonist in late clinicals and is also developing an ACE inhibitor, a thromobolytic agent, a vasodilator and a beta blocker.

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