Bayer Attributes Recent Aleve Bounce To Advisory Panel Discussions
This article was originally published in The Tan Sheet
Executive Summary
Bayer credits a rebound in Aleve sales in March to favorable FDA advisory committee discussions on the safety of naproxen
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Bayer credits a rebound in Aleve sales in March to favorable FDA advisory committee discussions on the safety of naproxen. First-quarter Aleve results declined in the U.S. compared to the prior-year period due to NSAID cardiovascular safety concerns, CFO Klaus Kühn reported in a May 10 first-quarter earnings call. However, sales of the OTC pain reliever bounced back late in the quarter "due to positive results from the FDA advisory committee," Bayer reported. Following the February joint meeting of FDA's Drug Safety & Risk Management and Arthritis Drugs panels, Bayer began an ad campaign quoting mainstream press reports of the committees' recommendations (1 (Also see "Aleve Campaign Cites Media Reports Of FDA Advisory Panel Opinions" - Pink Sheet, 14 Mar, 2005.), p. 3). More recently, the firm has ramped up advertising for Aleve Arthritis, positioning the product as a lower-risk OTC option for arthritis sufferers. Television ads that began airing in mid-April compare the product to Extra Strength Tylenol , stating two Aleve tablets "can stop arthritis pain all day." Overall, Bayer Consumer Care revenues were up 60.4% to $673 mil. in the first quarter due to the first-time inclusion of Roche OTC sales. However, the division's sales declined 10.9% when adjusted for currency and portfolio effects. In addition to Aleve, aspirin also experienced a year-over-year drop, which Bayer attributed to reduced wholesale inventories compared to the first quarter of 2004. Earnings for the division dropped 79.2% to $14.1 mil. as a result of inventory step-up stemming from the Roche merger. Bayer incurred a $26.9 mil. special charge in connection with the integration. The firm says synergies in the consumer division were achieved "more quickly than originally planned," and thus expects 2005 earnings to exceed the prior year. Bayer's overall headcount was 93,300 for the quarter compared to 92,500 in the year-ago period. Headcount additions from the Roche acquisition were offset by reductions in connection with the firm's Schering-Plough alliance. |