Here's some welcome news amid the recent spate of pharma layoffs: One small drugmaker is on a hiring spree. Ready to roll with two newly acquired drugs, Egalet says it's recruiting 5 sales managers to lead those efforts--and up to 60 sales reps to hit the street.
Egalet is looking to spruce up the marketing strategy for Sprix, a nasal-spray painkiller it acquired from Luitpold Pharmaceuticals. And it's preparing to launch with Oxaydo, an immediate-release hydrocodone pill that's formulated to deter abuse.
The painkiller market is growing, with sales expected to hit at least $8.4 billion by 2017, and Egalet wants to stake out its share, not just for these two products. The company has an extended-release opioid in the works, and it's hoping that the late-stage drug can benefit from the groundwork it's doing with Sprix and Oxaydo.
Egalet snapped up the two meds in January in separate licensing deals and started building out a commercial team. It recruited a chief commercial officer, Deanne Melloy, a former sales VP at the pain drug specialist Endo ($ENDP), and a sales VP, Tim Cochran, with plans to bring on those 5 regional sales managers next quarter.
One of Egalet's first moves was to switch up pharmacy access for Sprix, moving to a home-delivery model it calls Sprix Direct. Patients will get their meds via a specialty pharmacy, and will also get assistance with insurance claims. Copay assistance will limit monthly costs to $25 for most patients, Melloy said during a call with analysts last week.
The trick will be teaching current Sprix prescribers about the Sprix Direct approach--and, Egalet hopes, winning back previous prescribers. The company's call center has contacted 8,500 current and former prescribers about the direct-sales model, Melloy said.
And that's where the company's new sales force will come in. The idea is to hire 50 to 60 specialty pharma reps to promote the two products, and get them in the field by the end of September. The company has been interviewing prospects for the regional manager slots, and has already mapped out sales territories and identified high-volume markets. Its medical affairs group has worked up promo materials and rep-training plans, while setting up call centers and other support functions.
Egalet is considering whether to hire an entirely in-house field force or staff up with a combination of in-house and contract reps. In either case, reps will have a 70% base pay and 30% bonus, with incentives based on separate goals for each drug.
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| Egalet CEO Bob Radie |
With both Sprix and Oxaydo, Egalet will be targeting doctors who are high prescribers of similar painkillers. When Egalet was preparing to buy each drug, the company found a "low level of awareness" of either product among 6,300 high-decile prescribers it's now targeting, CEO Bob Radie said during the analyst call. The Sprix marketing program was "more diffuse," Radie said, and for the last year before Egalet snapped up the product, Luitpold wasn't promoting it directly at all.
"We see a lot of upside, a real opportunity to create a lot of awareness with these prescribers with these products," Radie said.
Given the size of the pain market--some 238 million scripts for short-acting painkillers were written last year, for instance--Melloy figures on a nice payoff from carving out a niche for Egalet. "Even at a single-digit share, there's a $150 million to $200 million opportunity," Melloy said.
But other companies have the same idea. Egalet isn't the only company preparing to ramp up marketing on a newly acquired pain drug. CNS specialist Pernix Therapeutics recently snapped up the controversial extended-release hydrocodone med Zohydro for $100 million, plus up to $238 million in milestones. It's taking on 100 Zohydro reps, with plans to put them to work on its own sleep drug Silenor as well.
- see the release from Egalet
- get more from the analyst call
Special Report: Pharma's top 10 M&A deals of 2014