ASTRA/MERCK SALES FORCE OF OVER 400 REPS IS IN PLACE

ASTRA/MERCK SALES FORCE OF OVER 400 REPS IS IN PLACE and detailing Prilosec and Plendil, Merck Chairman Roy Vagelos, MD, told the New York Society of Security Analysts Nov. 5. Merck has been building its sales force since mid-year in anticipation of the Astra joint venture, which could begin as early as 1994. Salespeople for the Astra/Merck Group are currently working in an adjunctive capacity to the regular Merck sales force to market Astra products licensed to Merck under the companies' 1982 agreement. The terms of that agreement call for Merck to set up a separate business entity if its sales of Astra drugs reach a preset level by Dec. 31, 1993. Astra will have the option of buying into the company at a cost determined by the sales volume generated in the first 12 months after that sales level is first reached. That cost has been estimated at $600 mil. to $700 mil. The Astra/Merck Group first will become a separate division within Merck and then will be spun off as a free-standing company. Merck expects to occupy the Astra/Merck headquarters building in March or April of next year. The company broke ground on April 30 for the projected $50 mil. complex in Chester County, Penn. The state gave Merck a $4.5 mil. "Sunny Day" loan to help establish Astra/Merck in Pennsylvania. Vagelos expressed optimism that the necessary level of sales of Astra products licensed to Merck would be reached by the Dec. 31, 1993 cut-off date set in the 1982 agreement. "We're hot on the trail of hitting our trigger," the Merck chief told the analysts. "We'll hit the trigger in 1993." The principal driver for hitting that sales trigger, Vagelos said, is the proton pump inhibitor Prilosec (omeprazole). Sales of the anti-ulcer drug were up 67% for the first nine months of 1992. Industry sources project 1992 Prilosec sales of $375 mil. in the U.S. Other products contributing to the Astra/Merck sales figures are Tonocard (tocainide), a treatment for life-threatening ventricular arrhythmias, and the calcium channel blocker Plendil (felodipine). Merck plans to file an NDA for Astra's schizophrenia drug Roxiam next year. Roxiam (remoxipride) is the next drug in development assigned to the joint venture, and it recently completed Phase III trials which showed it to have "a better side effect profile than other drugs currently on the market," Vagelos said. Vagelos maintained that the joint venture would be a good deal for both sides. "If we didn't hit the trigger, and if we didn't have the joint venture, we could only have [access to new] Astra drugs for a certain period of time and then we would be out. This way we have access to drugs from that research organization for as far as we can see." Despite the high price Astra will have to pay to buy into the company that will be set up by Merck, Astra has indicated that it feels the joint venture is a positive thing as well ("The Pink Sheet" Dec. 9, 1991, T&G-2). Vagelos insisted that Astra is getting its money's worth: "We are building a prime company that will be owned 50% by Astra...It has all of the Merck technology, history, and knowledge, so I think they in fact have gotten a very good deal."