Despite its leading position in the fast-growing obesity market, Xenical has had a tough time. Roche's DTC marketing campaign has put it in near-perpetual conflict with the FDA, and sales have begun to decline. The best way for Roche to revive Xenical now will be through gaining new indications to treat diabetes and cardiovascular risk factors.
Roche has announced results from two new trials that show its weight loss drug Xenical (orlistat), when taken for up to two years, promotes weight loss in overweight and obese people, and is associated with a lowering of cholesterol and blood pressure.
Xenical, which has a unique mechanism of action, is capable of reducing the absorption of fat. This promise was backed up by a fast start on the US market on its launch in 1999. In less than a month, 31,000 patients began taking the drug. Sales hit $625 million for the year, helping Roche beat earnings estimates. Some analysts predicted the drug would end up reaping more than $2 billion by this year.
Unfortunately the boom in Xenical sales didn't last. Sales of the drug fell by nearly 10% in 2000. In response, Roche has revamped Xenical's promotional campaign, but the drug's sales stagnation has taken a toll.
Roche's short-term strategy involves an aggressive direct-to-consumer (DTC) marketing strategy in the US, which has often irritated the FDA. Since Xenical's launch in 1999, Roche has received four warning letters from the FDA regarding this campaign. The most recent warning letter was issued in March 2001.
Among the regulatory agency's complaints is that the advertisements do not prominently present information about Xenical's side effects and contraindications. Arguably, Xenical's greatest weakness is its unpleasant side effects, including oily stools and leakage, which greatly discourage patients from complying with therapy advice. Last week, Roche stepped up its marketing efforts and offered a free 3-months supply to patients.
Roche's longer-term strategy involves seeking indications for Xenical in diabetes and cardiovascular disease. In May 2001, the FDA agreed to review an application for Xenical to gain in indication for obese patients with type II diabetes. Targeting the rapidly growing diabetes market will increase the potential patient pool, but the poor levels of compliance and low uptake experienced with obese patients are still likely to be mirrored in the diabetic population.