The consolidation of the Aleve (naproxen sodium) franchise under one roof - and its pairing with Bayer Aspirin - appears to be a primary driver of Bayer's acquisition of Roche Consumer Health.

Announced July 19, Bayer's agreement to purchase Roche's OTC unit for $2.96 bil. includes international rights to the Aleve brand, which currently is marketed in the U.S. by Bayer under a 50/50 joint venture with Roche. Worldwide sales of Aleve totaled $211 mil. in 2003 and accounted for roughly 20% of Roche's consumer business.

Bayer does not break out aspirin revenue. However, according to data from Information Resources, Inc. (Chicago), Bayer Aspirin and Aleve generated sales of $107 mil. and $155 mil., respectively, in the U.S. for the 52 weeks ended April 18. The data exclude Wal-Mart sales.

Although Bayer already has a strong presence in the analgesic category, particularly in light of its cardiovascular indications on professional labeling of aspirin, the firm anticipates that full ownership of Aleve will further bolster its position as a worldwide branded analgesics leader. In addition to aspirin and Aleve, the company has had experience in the analgesic market with Vanquish (aspirin and acetaminophen) and Actron (ketoprofen).

Bayer is betting that its enhanced position in the analgesic market could help make the firm an attractive candidate as a marketer of potential Rx-to-OTC switch drugs (see ¹ Also see "Bayer/Roche Consumer Unit Will Focus On Rx-To-OTC Switch Opportunities" - Pink Sheet, 26 July, 2004.).

The company maintains that full ownership of Aleve also creates an opportunity for further global development of the brand. Finally, the consolidation will allow Bayer to streamline operating efficiencies and simplify the Aleve business, the firm says.

Bayer emphasizes that its acquisition of the Aleve stake was "not included in Roche's original offering."

The purchase of the brand will mark the first time that Aleve has been consolidated under one roof since its debut on the OTC market. Aleve originally switched in 1994 under a joint venture between Syntex Labs and Procter & Gamble. Roche acquired the brand through its purchase of Syntex Labs in 1994 and Bayer took over U.S. marketing of the drug in 1996 when P&G opted out of the joint venture.

Bayer Aims For Global Analgesic Market Dominance With Aleve, Aspirin

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