|Endo CEO Rajiv De Silva|
Upon buying up Auxilium--which markets Vivus' ($VVUS) erectile dysfunction drug Stendra--Endo ($ENDP) decided wholesale inventory levels weren't where they ought to be. Its solution? A relaunch of the drug, complete with a new salesforce and DTC efforts.
The Irish drugmaker is shelling out on a new contract sales organization, which recently completed training, and a targeted DTC campaign, CEO Rajiv De Silva said on Monday's Q1 conference call. With those investments under its belt, the drugmaker will begin the rollout late this quarter, he said.
As De Silva told investors, Auxilium itself had begun to go the contract sales route with Stendra before the acquisition. Endo, though, will be changing which CSO backs the product. A "well-established" organization will promote Stendra alongside one of its other leading launches, De Silva says. With the contract reps, the number of sales people behind the Stendra brand will more than double.
As for the DTC campaign, it won't be the first to back the therapy, which Auxilium has touted as a speedier alternative to rival treatments like Eli Lilly's ($LLY) Cialis and Pfizer's ($PFE) Viagra. Last year, the company's black-and-white ads--bearing amorous-looking couples and taglines beginning with, "This time he was ready"--graced March Madness commercial breaks and the CBS Sports website.
This time, though, the campaign won't be hitting national airwaves; De Silva says Endo doesn't think that's the right move at this point. Instead, the company will take a "more targeted" approach--one that's "more creative in terms of how DTC works," he said.
Endo is hoping the boost can help unload some of Auxilium's initial launch stocking, which De Silva says has resulted in higher-than-usual wholesale levels. At the end of the first quarter, about two months' worth of Stendra inventory was sitting in the channel, and Endo would prefer that be closer to one.
If the new push can bolster sales, it'll also be good news for maker Vivus, which saw its license and milestone revenue for the drug shrink as Stendra changed hands. For the first quarter, Vivus collected $11.6 million, down from the $19.4 million it raked in over the same period last year.
Of course, Auxilium isn't the only one handing Vivus a share of Stendra revenues. California-based Vivus also has pacts with Sanofi ($SNY) and Menarini to hawk the drug outside the U.S.--agreements it inked after its decision to go it alone with obesity therapy Qsymia ignited a proxy war.
On that front, the company still lacks a marketing partner to help beef up sales, and in March it announced it was scaling back the Qsymia rep army it's fielding on its own. Fifty staffers headed for the door, and in their place, Vivus said it would be amping up its digital media projects to help get out the word on the med.
- read Endo's call transcript