GlaxoSmithKline has converted 31% of Paxil new prescriptions to the controlled-release version.

GSK attributed its success with Paxil CR conversion to a simple marketing message for the antidepressant, Pharmaceutical Operations President David Stout told investors on a year-end earnings call Feb. 12.

"It's much better tolerated. Physicians know with SSRIs the biggest problem is getting through the first month of treatment, where either they don't see the efficacy, or the side effects cause people to drop off therapy," Stout said.

"We saw from our clinical trials that patients on Paxil CR tended to stay on therapy longer and better, and that's the core message that we're able to deliver." Paxil CR was launched in April 2002. The Paxil family is GSK's biggest seller, with $2.12 bil. in U.S. sales in 2002, up 18%.

Converting paroxetine patients to Paxil CR takes some pressure off pending patent litigation against Apotex.

Paxil patent cases are ongoing in Chicago and Philadelphia federal courts. GSK expects a decision in Philadelphia as early as March; Apotex was granted a partial motion for summary judgment in December (¹ Also see "Apotex Paxil Generics Earliest Launch Date Could Be September 2003" - Pink Sheet, 6 January, 2003., p. 28). A judgment in Chicago also could be released soon, GSK said.

Under a "worst-case scenario" for GSK, the earliest possible date for generic Paxil is September, upon expiration of the 30-month stay in the Philadelphia trial, CEO J.P. Garnier said. However, he added, it is more likely generic paroxetine will not launch in 2003.

Apotex is also suing FDA over the listing of paroxetine patents in the "Orange Book." During an appeal hearing in U.S. Federal Circuit Court, Apotex argued that FDA should have evaluated the listability of GSK's patents (² Also see "FDA Patent Listing Review System Suggested By Paxil Appeals Court" - Pink Sheet, 10 February, 2003., p. 17).

GSK has experienced even better success with patient conversation for the antibiotic Augmentin , with 49% of new prescriptions captured by the higher-dose Augmentin ES .

"In July of last year when the generics entered, there were a lot of questions about [whether] we could continue to grow the franchise," Stout told analysts. "Well, we've grown from about 35% of the market share to 49%."

GSK had a relatively easy time in the first months of generic Augmentin (amoxicillin/clavulanate) due to supply constraints at Geneva (³ Also see "Geneva Generic Augmentin Distribution Limited To Warehousing Drug Chains" - Pink Sheet, 19 August, 2002., p. 13). The second wave of generic approvals began in September.

GlaxoSmithKline's rate of conversion to Augmentin ES appears to be higher than switch rates for two other recent follow-ons, Schering-Plough's Clarinex and AstraZeneca's Nexium , Stout maintained. Usually, "25%-40% tends to be the typical range of business that you can convert at the end of a life cycle," he said.

The exec attributed Augmentin ES' 49% conversation rate to a "good differentiated product profile" and GSK's continued support behind the brand. Augmentin ES-600 is twice the amoxicillin dose (90 mg/kg/day) with the same clavulanate dose (6.4 mg/kg/day) as regular-strength Augmentin.

The launch of generic Augmentin has had a significant impact on U.S. sales, which were down 20% to $1.1 bil. in the year, and 41% to $255 mil. in the fourth quarter. "After next year, when you get the whole full-year impact of generics out of the base business, Augmentin will actually become a growth franchise again," Stout said.

Augmentin ES has 21% of amoxicillin/clavulanate total scripts in the U.S., with recently launched Augmentin XR holding an 8% share. The original Augmentin formulation has 10%, and generics, 61%.

Augmentin XR is the second part of GSK's life-cycle management program for the antibiotic; since November, GSK has converted 14% of the Augmentin base business to the extended-release version, despite the fact that it was launched "five months post the introduction of the first generic," Stout said.

"The real beauty of the Augmentin XR story is that it is a simple one to tell," the exec said. "We extend the killing time. It's a very simple story, physicians understand it very quickly."

GSK is pursuing a similar life-cycle management strategy for Wellbutrin SR / Zyban with the launch of a once-daily version later this year.

The company considers Wellbutrin XL as a new product launch, rather than a line extension, due in part to the antidepressant's improved safety profile, as well as an extended R&D and launch effort.

Noting the "nasty side effects" associated with the original, three-times daily Wellbutrin, Stout acknowledged a "lingering halo in some physicians' minds," despite the availability of twice-daily Wellbutrin SR. The once-daily version will help to build distance "from those initial opinions of the product," he said.

Garnier agreed: "If you take Wellbutrin SR, it's a pretty formidable product. And the thing that's wrong with it - if anything - is the shade of epileptic seizures, but that's kind of moved away once you move from t.i.d. to b.i.d., but once a day would be a bit a better."

Sleeplessness is another side effect with Wellbutrin SR that is not expected to continue with the once-daily dose, Garnier added. "People complain in 10%-15% of the case they have trouble sleeping at night....The second dose gets you up. Well, we'll just get rid of that by going once-a-day."

"I think there will be great stories, even though we won't have a lot of clinical data on the label, because we've made a quick switch here."

Furthermore, GSK does not expect to see steep generic erosion for Wellbutrin SR, Garnier maintained.

"In a market like the U.S., the decision to switch to a generic is not made at the physician level. It's done at the pharmacy level. Physicians don't one day write Wellbutrin, the next day write bupropion. They actually continue to write Wellbutrin and continue to support the brand, even if there was a generic."

GSK's appeal of non-infringement rulings for Andrx' generic sustained-released bupropion was heard in December in D.C. federal appeals court (⁴ Also see "GSK vs. Andrx Wellbutrin SR Appeal Turns On Role Of Excipient" - Pink Sheet, 9 December, 2002., p. 28). Blend uniformity issues have prevented FDA approval of Andrx' ANDA (⁵ Also see "Naprelan Generic Exclusivity Settled; Andrx Sees Three Near-Term Launches" - Pink Sheet, 15 July, 2002., p. 7).

Garnier took an opportunity to defend the brand name industry in its approach to patent challenges, arguing that generic companies are becoming much more aggressive earlier in the life of a product.

"Right now, generic companies have changed their strategy in the last nine months or so. They realize that because of the peculiar aspects of patent litigation in the U.S., 30-month stay and the like, the clever thing is to go right after a drug is launched."

"In an ideal world, you want to file your ANDA and get your certification right at the launch, even though you're 10 years ahead of time," Garnier said.

"The way to do that is...you do all the work as early as possible, you file, you get your paragraph IV certification, and you attack the patent. And then you sit there, and you wait. You capture the 180 days with a little luck, and that's the big prize."

"This is a shotgun strategy, send everything against the wall, and some will stick. And you will be first in a number of races. And the big money, if you are a generic company, is the six-months exclusivity," he said. "We're not concerned about it, of course."

Garnier's comments appear to represent a new message to investors about how to interpret patent challenges. Pfizer CEO Hank McKinnell took the argument one step further, calling the generic industry's early certification an "abuse" of the system (⁶ Also see "Neurontin Bulk Supply May Limit Generic Uptake, Pfizer Says" - Pink Sheet, 27 January, 2003., p. 18).

Garnier was careful to draw a distinction between patent challenges for products at the end of their life span (Augmentin, Paxil and Wellbutrin) and those still in early stages ( Imitrex and Valtrex ).

"Imitrex/Valtrex have nothing to do with say a Paxil issue, or Wellbutrin," he said. "There, we are at the end, we're are toward the sunset, and we've got to fight with patents which are no longer composition of matter patents. So it's a completely different framework."

Speaking on the Imitrex and Valtrex challenges, GSK said it has not yet seen the paragraph IV certifications, so "we don't know exactly how the generics are putting their case, or what patents they're attacking," General Counsel Rupert Bondy said.

Two Imitrex patents (Nos. 4,816,470 and 5,037,845) expire in 2006 and 2008, but additional patents listed in the Orange Book run until 2013. For Valtrex, the compound patent (No. 4,957,924) expires in 2009, but GSK listed two additional patents that run to 2016.

Stout summed up the crux of GSK's life-cycle management strategy: "When you look at big products like a Paxilor Augmentin, I don't particularly like falling off a cliff, so I prefer to say what we want to do is roll down some gentle hills and maybe even in some cases, we can roll back up them again."

GSK Switch Success: Paxil CR Has 31% Of New Scripts; Augmentin ES, 49%

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