April 15th, 2011

Glaxo to Shed Its OTC Diet Drug, Alli

The Wall Street Journal

Four years after launching the nonprescription diet pill Alli with much fanfare and a heavy marketing budget, U.K. drug maker GlaxoSmithKline PLC on Thursday said that it plans to sell off the drug along with a clutch of other over-the-counter brands.

Glaxo once tipped Alli as a possible blockbuster, but sales never took off, and the drug was hurt last year by reports that a small number of people taking it experienced liver damage.

Glaxo had already announced several months ago that it planned to sell over-the-counter brands with about 500 million ($813 million) in annual sales. On Thursday, it listed the brands to be sold, including Alli, the analgesics Solpadeine and Goody’s and the vitamin brand Abtei.

When Glaxo launched Alli in 2007, it backed the drug with an extravagant marketing campaign that included television, print and Internet ads and elaborate in-store displays. It set up a website where Alli users could swap dieting tips and get advice from dieticians. Glaxo even published a book with diet advice and recipes, which it sold at drugstores.

But sales sputtered soon after the June 2007 U.S. launch. Glaxo sold 150 million of Alli that year, and only 75 million in 2008. Sales rallied in 2009 to 203 million as Glaxo launched Alli throughout Europe, but the company acknowledged in February that demand for the drug was falling in the U.S. and Europe. The company didn’t break out Alli sales in 2010.

Alli is a weaker, nonprescription version of the prescription drug Xenical, which is marketed by Roche Holding AG. Last year, the U.S. Food and Drug Administration said both drugs should carry new warnings about rare reports of “severe liver injury,” although the agency said it wasn’t clear whether the drugs caused the injury.

The watchdog group Public Citizen has called for both drugs to be banned due to liver-injury reports, and repeated this call again Thursday.

Glaxo defended Alli’s safety in a statement Thursday, saying it was “safe and effective when used as directed.” The company said it was selling Alli and the other brands because it “lacked sufficient critical mass in some product categories and certain brands have lacked focus due to other global priorities.”

Read more: http://online.wsj.com/article/SB10001424052748703983104576262831827490402.html

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