Andrx Altocor Will Test “Guerilla” Marketing In Cholesterol Market

Andrx is confident that it can establish the cholesterol agent Altocor with a sales force of less than 300.

"I think it's actually an advantage at this point to be undersized in this marketplace," CEO Richard Lane maintained during a July 26 conference call. "We don't have to focus on trying to be successful homogeneously across the U.S." Instead, "we can focus in areas of high opportunity. We can be guerilla fighters, if you will, and we can use early successes to fund continued growth and building."

Altocor (extended-release lovastatin) will be launched into one of the most heavily detailed markets, against Pfizer ( Lipitor ), Merck ( Zocor ) and Bristol-Myers Squibb ( Pravachol ). AstraZeneca is hoping for a significant entry next year with Crestor (see ¹ (Also see "AstraZeneca Crestor Plan: Drop 80 Mg, Submit Lower-Dose Data In Q1" - Pink Sheet, 12 Aug, 2002.)).

Lane is familiar with the dynamics of the cholesterol market, having overseen Bristol's Pravachol marketing as head of the U.S. primary care business (and ultimately head of global marketing) from 1995 until this year (² (Also see "Andrx Puts Branded Rx Line In Fast Lane: Ex-Bristol Exec Joins As CEO" - Pink Sheet, 27 May, 2002.), p. 21).

There is, however, some evidence that much smaller specialty firms can carve out a niche in the cholesterol market: Reliant Pharmaceuticals has been able to turn around the performance of Lescol since licensing the drug from Novartis at the end of 2000 (³ (Also see "Alkermes/Reliant Merger: Can Lescol Follow Altace Model?" - Pink Sheet, 15 Apr, 2002.), p. 25).

Altocor was approved June 26, and Andrx began promoting the drug the first week of August (⁴ 'The Pink Sheet,' July 1, In Brief). Andrx is positioning Altocor as a product that combines the well-established safety profile of lovastatin (Merck's Mevacor and generics) with an improved delivery system - at a significant discount to the heavily promoted brands.

Altocor labeling outlines the differences in the pharmacokinetic profile of the extended-release formulation from the immediate-release product (also typically dosed once-daily). Labeling references both the safety and efficacy profile of immediate-release lovastatin, and does not include any explicit points of clinical differentiation.

At $2.05 per tablet AWP, Altocor is priced at a 15%-30% discount to Lipitor, Zocor and Pravachol, Lane noted. It is priced at approximately the same level as Lescol XL (and 30% above IR Lescol). It is also at a significant premium to generic lovastatin.

While Andrx intends to launch the drug with only 280 reps, Lane stressed that the company will monitor its promotional investment carefully, and will be ready to scale-up quickly if justified.

"We have implemented a test in two areas to test the effect of our sales force at twice the size," Lane said. "If and when that test demonstrates it is cost effective to be bigger, we would use that as a rationale for expanding our sales force earlier."

Andrx has several options to expand its sales presence, Lane said. The company has "the ability to build our own sales force from 300 to 500 very quickly." Andrx has relationships with contract sales organizations that could allow a quick boost to the promotional base, and it is still evaluating the possibility of a formal copromotional agreement.

"One of the areas we're going to continue to look at very closely is the need for some type of specialized cardiovascular effort," Lane said. Andrx expects to add a cardioprotective claim for Altocor when Mevacor loses exclusivity for the indication in September, Lane noted. The new claim "will substantially increase its sales potential and the ability of our representatives to talk about the product with physicians."

Andrx plans to support the Altocor launch with a couponing program, the company said.

In addition, Andrx is looking at the "pros and cons of a DTC campaign," Lane said. "We want to understand whether there's a positive benefit from appealing to cash paying customers, particularly senior citizens, with the message...to the effect of: 'as effective as what you're currently taking but 25% less expensive.'"

At Bristol, Lane talked about the difficulty in finding the right balance between DTC and professional support for Pravachol (⁵ (Also see "Pravachol DTC Ads Promote NCEP Guidelines, Reps Focus On High Prescribers" - Pink Sheet, 30 Jul, 2001.), p. 15).

Andrx has modest expectations for Altocor this year. The company expects the initial trade sell-in to be in the $10 mil. range. With the couponing program, Andrx does not expect to record any net revenues for the product during the third quarter.