Aventis expects its allergy therapy Allegra to achieve single-digit growth in 2003 despite a slow first quarter, the company told analysts April 30.

"We are totally on track with our objective of....good growth - single digit we think - but good growth in 2003 compared to 2002," Aventis Chairman Igor Landau said. First quarter U.S. sales of Allegra (fexofenadine) were $343.4 mil., up 2.1%.

Aventis ascribed slow growth in Allegra sales to a "delayed" U.S. allergy season. "The national pollen count is roughly 10% below last year's as of April 7 and this, as a matter of fact, is the lowest level that we have seen in about four years," Investor Relations Head Arvind Sood said.

Despite the late allergy season, Aventis noted that Allegra's total prescription growth during the same period was "approximately 10%." The company attributed the disparity between the growth of sales and the growth of prescriptions to wholesalers "continuing to reduce inventory levels."

"If we look at the first quarter...we had a significant de-stocking effect," Landau said. "The inventory at the end of last year was close to .8 [months of sale]. At the end of March it's about .5 months of sale. And we feel that this de-stocking is close to...finished."

Analysts pressed Aventis on Allegra's market share standing compared to Pfizer's Zyrtec (cetirizine). Pfizer reported U.S. sales of the allergy therapy were up 33% to $293 mil. during the first quarter; Pfizer CEO Henry McKinnell noted that Zyrtec is gaining "growth and share" (¹ Also see "Lipitor Sales Slowdown Reflects Overall Rx Market Trend, Pfizer Says" - Pink Sheet, 28 April, 2003., p. 24).

Landau noted that he was "puzzled with the very good number reported by Pfizer" and thus "asked for a very detailed analysis" of the allergy market. "The key difference...has to do with the pediatric formulation that Zyrtec [has]," Landau said. "When you take total prescription share including Zyrtec syrup and you compare Allegra and Zyrtec...Zyrtec has increased faster than Allegra," the chairman acknowledged.

However, "if you exclude Zyrtec syrup and compare the two...in total Rx, Zyrtec went from 28 to something like 33, 34 and [Allegra] went from 40% market share in total Rx to slightly over 45%."

"The syrup represents about 10 percentage points of the total prescription market share that Zyrtec has and when you strip that out, in terms of new prescriptions actually we are going at a faster pace when you compare Allegra once daily to the Zyrtec tablets," Sood added.

"So clearly the difference is syrup. And you know that we couldn't develop a syrup pediatric population for Allegra, and that's why we're not competing on this segment," Landau said.

The chairman acknowledged that Aventis' lack of a syrup formulation of Allegra is "a disadvantage for children for sure" and urged analysts to "concentrate on the 180 mg once daily and Allegra D where we concentrate our efforts." The company markets fexofenadine in a tablet formulation (30, 60, and 180 mg) as well as a capsule formulation (60 mg). Allegra D (fexofenadine 60 mg and pseudoephedrine 120 mg) is sold as a tablet.

Despite the switch of Schering-Plough's Claritin to over-the-counter status, Aventis maintained that the company "hasn't seen so far any changes in the way we are reimbursed" for Allegra. "I will not give you the exact number of lives covered. The only thing I can tell you, and it has not changed in the last months, is that the big majority of Allegra is in tier two and so far we haven't seen changes," Landau said.

Following the loratadine switch, some managed care companies such as WellPoint and Aetna are requiring prior authorization for all Rx antihistamines. Cigna has remanded the drugs to non-preferred, third-tier status (² Also see "Merck Singulair Presents Managed Care Test: Covering Asthma, Not Allergies" - Pink Sheet, 6 January, 2003., p. 7).

Aventis' discussion of Allegra's sales illustrate the challenge for the company of sustaining its franchise brand while at the same time managing earnings projections to prepare for generic competition.

Aventis expects Allegra sales to represent only 8% of the company's total sales at the time of a potential generic entrant, which Aventis projects will not happen before "the end of 2004 or early 2005."Aventis has filed a total of five lawsuits against companies seeking to market generic verisons of Allegra which have been consolidated in New Jersey federal court. A trial has been set for mid-September 2004. (³ Also see "Aventis Allegra New Prescriptions Up 9% Despite Availability Of OTC Claritin " - Pink Sheet, 10 February, 2003., p. 7).

Allegra Hurt By Stocking, Late Allergy Season, Not Other Products – Aventis

More from Archive

More from Pink Sheet