Valeant plots big DTC push for Xifaxan while rival Actavis drug waits on DEA

Last week, the FDA approved both Valeant's ($VRX) Xifaxan and Actavis' ($ACT) new Viberzi to treat IBS-D. And now, the market will get to watch what Bernstein analyst Ronny Gal deemed an "interesting test" of two company approaches as the pair competes for uptake.

Both drugs will be going after for first-line use, Gal wrote in a recent note to investors. But as Leerink Partners analyst Jason Gerberry suspects, thanks to Xifaxan's shorter therapy duration and superior safety profile, specialists will limit Viberzi's use to patients who either don't respond to Xifaxan or have failed multiple OTC antidiarrheals, he wrote last week.

It could be awhile before industry-watchers find out, however. Because Viberzi is an opioid receptor agonist--aka, potentially addictive--it's subject to Drug Enforcement Agency (DEA) scheduling. That could mean a launch delay until as late as next year's Q1, ISI Evercore analyst Umer Raffat wrote in a Thursday note to clients.

Valeant CEO J. Michael Pearson

Xifaxan, on the other hand, is already rolling. On April's Q1 conference call, Valeant CEO J. Michael Pearson told shareholders his company would start promoting the product in IBS-D the day after approval, using a package insert like it does with antifungal Jublia and acne treatment Onexton. After that, the company will prep marketing materials, get a campaign together and do a formal rollout meeting later in the summer, he said.

For Valeant--which is spending more time on marketing these days after last year's Allergan buyout attempt spurred attacks on its M&A-focused business model--the new nod will bring along another opportunity to foray into DTC advertising. Picture the company's approach to Jublia--which featured a Super Bowl ad--and then picture that approach "turbocharged," Pearson offered.

The reason? IBS-D is "pretty simple to self-diagnose," Pearson said, "so we think that going directly to the patients to make them aware of the treatment for this … will really drive demand."

More so, Valeant figures, than a primary care sales force, which Pearson said would drive a much lower return on investment than pumping up DTC efforts. Instead, it'll have GI expert Salix's specialty sales force--which it vowed to keep intact upon picking up the company earlier this year--hitting the primary care market as part of its call plan.

But Valeant isn't the only one with experienced reps on its side. Actavis already has a sales force intact for the drug, thanks to constipation med Linzess. The pre-existing rep army should help speed early adoption, Gal noted, though market development will need more time after the initial pickup since IBS-D is not as well known.

Still, Gerberry thinks the ability to promote the two drugs together will go a long way, helping Viberzi achieve half the peak share levels of Linzess, he wrote. Overall, he forecasts about $400 million for the med by 2020, though a "favorable label"--one that doesn't include a boxed warning for pancreatitis that some analysts expected--"suggests potential room for upside."

- read Valeant's call transcript
- see FiercePharma's take

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