“Cialis Challenge”: ED Drug Sampling Hides True Market Growth, Icos Says

Increased prescription sampling within the erectile dysfunction market has caused an understatement of the category's overall growth, Icos VP-Sales & Marketing Leonard Blum told investors May 3.

"The U.S. market growth, as measured by PDE-5 inhibitor tablets dispensed from pharmacies, accelerated when the Cialis direct-to-consumer advertising commenced," Blum said. However, "the market growth is somewhat understated over the past several months because of the impact of samples," Blum said.

Lilly/Icos launched the Cialis (tadalafil) "product and use" TV ads during the Super Bowl Feb. 1 (¹ (Also see "Super Bowl Ads Pit Levitra Against Cialis; Viagra Stays On The Sidelines" - Pink Sheet, 9 Feb, 2004.), p. 7).

Blum noted that phosphodiesterase-5 inhibitor sampling has increased with the entrance of two new agents. "According to ImpactRx, the percentage of new therapy initiations that included a sample has increased from 40% last July to 65% today," he said.

Lilly/Icos is pleased with the initial results of its "Cialis Challenge" sampling program, Blum said. Under the program, physicians are directed to provide five-tablet samples of Cialis to up to 10 patients. After taking the sample, patients are asked to complete a questionnaire evaluating their experience with Cialis.

Patients then receive a voucher for five free tablets of any PDE-5 inhibitor, including Cialis, Pfizer's Viagra (sildenafil) and Bayer/GlaxoSmithKline's Levitra (vardenafil).

Lilly/Icos launched the program in February. So far, "the overwhelming majority" of the 10,000 vouchers that have been redeemed have been "used to purchase more Cialis," Blum said.

The PDE-5 inhibitors are engaged in a fierce market share battle. Icos reported that, as of April 23, Cialis had captured 19.6% and 12.1% of new and total erectile dysfunction prescriptions, respectively, compared to Levitra's 14.2% and 10.7%. Viagra remains the market leader.

Despite the gains in Cialis market share, Icos' stock price fell 13.3% in April, closing the month at $32.01. The stock underperformed the "F-D-C" OTC Index of NASDAQ-traded biopharmaceutical stocks, which was down 1% for the month (see chart: " ² Monthly 'F-D-C' Index of OTC Drug-Wholesaler Stocks ").

The marketers of Viagra and Levitra have also launched patient incentive programs.

Following the Super Bowl, Bayer/GSK offered patients coupons for a free three-day trial as part of the "Levitra Challenge." In April, Pfizer launched the Viagra "Value Card," which provides patients with one free prescription for every six they buy (³ (Also see "Pfizer Viagra “Value Card” Offers Buy-Six-Get-One-Free Script Deal" - Pink Sheet, 19 Apr, 2004.), p. 32).

Blum declined to provide the exact number of patients who have redeemed vouchers for Cialis. He noted that the 10,000 total redeemed vouchers represent a small fraction (6.7%) of the total participants in the program.

The companies have distributed Cialis Challenge kits to 15,000 doctors, each of whom may enroll up to 10 patients. Assuming all physicians enroll the maximum number of patients and each patient completes the program, Lilly/Icos would be responsible for 150,000 redeemable vouchers.

The 15,000 participating physicians represent slightly more than one-fifth of the physicians that the joint venture has targeted for Cialis detailing. Blum noted there are 220,000 doctors who prescribe erectile dysfunction therapies in the U.S. Of those, approximately 73,300 prescribe 70% to 80% of the script volume, the Icos exec said.

The Cialis Challenge is particularly focused on capturing previous Viagra patients. "We're convinced that the large majority of men, particularly those who have used Viagra in the past, will come back after trying Cialis and tell their doctors that Cialis is the one they want," Blum said.

"When men return to their doctors and demonstrate with their words and actions that they choose Cialis, they will communicate more convincingly than any pharmaceutical representative ever could that Cialis is indeed the preferred PDE-5 inhibitor," Blum added. Worldwide Cialis sales for the quarter totaled $108.3 mil., including $32.8 mil. in U.S. sales.