Dive Brief:
- Valeant Pharmaceuticals’ wholly owned subsidiary Salix has ‘rapidly scaled up’ its sales force by nearly 40% effective immediately, the company said Feb. 27, one day before releasing fourth quarter and full year 2016 earnings.
- In November the struggling Canadian specialty pharma, announced that a significant sales force expansion would occur in "the coming weeks" – even as it confirmed it was shopping around the Salix unit it had acquired for $11 billion in 2015.
- Valeant said it is deploying the expanded Salix sales force to capture untapped market opportunity, after making a significant investment in primary care sales representatives for two of its best-selling drugs: Xifaxan (rifaximin) for irritable bowel syndrome with diarrhea and Relistor (methylnaltrexone bromide) for opioid-induced constipation.
Dive Insight:
Similar to a few months ago, the latest announcement of the sales force expansion could indicate that talks to sell Salix aren't going in the direction that Valeant had hoped. Valeant has been trying to sell off assets to make a dent in its $30 billion debt, yet investors have balked at the idea of Valeant selling Salix and off-loading two of its best-selling products in strong and growing markets. Valeant might help itself if it can grow these drugs on its own.
"This is a demonstration of our commitment to GI and its relative importance to the broader value of our company," said Valeant Chairman and CEO Joe Papa. "The significant investments in Salix's dedicated primary care physician sales force will help us further reach patients in need of [IBS-D] treatment, and in doing so, will further accelerate growth for our company."
However, Valeant’s Salix sales force apparently lost ground before picking up new hires. In a Feb. 23 note to investors, Wells Fargo analyst David Maris, trying to pin down rumors that 50-plus GI reps had exited Valeant to join Synergy Pharmaceuticals (which won FDA approval in January for constipation drug Trulance), said he had confirmed with Valeant that "a number of salespeople have left."
In April 2016, New York-based Progenics exclusively licensed development and commercialization rights for Relistor, its first commercial product, to Valeant. A few months later, the Food and Drug Administration approved the drug, seen as having $1 billion sales potential.
In a Feb. 27 investment note on Progenics, Jefferies analysts described Valeant’s primary care sales force expansion as "an important step to boost Relistor’s initial modest launch in a huge untapped market in OIC." Valeant’s sales force expansion, together with AstraZeneca’s marketing efforts for competing drug Movantik, "could increase awareness of OIC drugs in the PCP community, which could drive long-term growth potential for Relistor in this under penetrated market," analysts said. They noted Movantik has roughly nine times more prescriptions than does Relistor, which has a wholesale acquisition cost of about $1,500/month — five times higher than Movantik’s price.
Over the past three months, Valeant has hired about 250 sales reps and managers to detail to primary care physicians, who are key potential prescribers of Xifaxan and Relistor, Valeant said. The company noted that about seven in 10 IBS-D patients first visit a PCP.
Valeant said the new hires are expected to complement its existing primary care sales team and allow it to capture nearly 75% of the primary care market opportunity.
Valeant also expanded its dedicated pain sales force to strengthen its position in the OIC market, setting up a nurse educator team to inform clinical staff within top institutions.