Pfizer places its bet on OTC Nexium
Pfizer is making a multimillion-dollar bet on the over-the-counter (OTC) reflux market. The company is scooping up worldwide marketing rights to the non-prescription version of AstraZeneca's blockbuster proton-pump inhibitor for $250 million up front. AZ would start supplying the OTC med to Pfizer's consumer care unit upon possible approval. The down payment could be a lead-in for additional milestone and royalty payments.
The deal is good for AstraZeneca, which has been slogging through a leadership change, massive layoffs and a failed sepsis drug. A company statement indicated that the deal is also an entry point for further collaboration: AstraZeneca has given Pfizer first refusal rights for the OTC version of the hay fever spray Rhinocort Aqua.
Sales of Nexium's prescription GERD medication, launched in the US in 2001, have been on the decline. Worldwide sales fell to $949 million during the first half of 2012, a 13% drop compared to the same period last year—and last year's sales of $4.4 billion were 12% lower than in 2010. Nexium is slated to lose US patent exclusivity in 2014.
“This agreement will help AstraZeneca realize the substantial, long-term value of this brand and potentially other brands in our portfolio,” Tony Zook, VP of global commercial optimization for AZ, said in a joint company statement.An OTC version of the drug has not yet been approved, and AstraZeneca will still make the prescription version. An application for the OTC version went before European regulators in June. The companies said the FDA should expect an OTC application in the first half of 2013. Pfizer said in the statement it expects to launch OTC Nexium in the US by 2014.