Is That a Marketing Partner in Your Pocket or Are You Just Happy to See Me?

For being the fastest acting erectile dysfunction drug, VIVUS sure did take a long time to get a deal for Stendra done.

The Food and Drug Administration approved the drug in April 2012, but VIVUS never launched the drug and only announced a marketing partner today. Auxilium Pharmaceuticals plans to have the drug on pharmacy shelves in December and begin marketing it in January.

VIVUS will collect $30 million up front and another $15 million when Stendra's label is modified to include information from a recent trial about its quick efficacy. All told, VIVUS is eligible for up to $300 million in regulatory and sales milestones in addition to undisclosed royalties.


"Auxilium is the ideal partner for Stendra," VIVUS' new CEO Seth Fischer said in a press release.

Ideal? Really? Because I would have thought the ideal partner would have been a big pharma with a large sales force targeting primary care docs and the resources to launch large marketing campaigns.

Auxilium plans to use its established 150-person sales force, hocking Stendra along with its testosterone gel, Testim, and an injected erectile dysfunction drug, Edex, to urologists, endocrinologists, and some primary care physicians who see large numbers of patients with erectile dysfunction. Auxilium plans to "leverage digital media to reach a broader audience online." My guess? A television ad campaign with typical sexual innuendos is off the table.

By "ideal," I think Fischer really means "best of the realistic options." With Eli Lilly's Cialis and Pfizer's Viagra going off patent in the not-too-distant future, it was unlikely that VIVUS could land a big pharma partner. Despite the large market -- Eli Lilly reported $215 million worth of US sales of Cialis in the second quarter, and Pfizer did even better, with stateside Viagra sales of $280 million -- Stendra will be a niche product when cheap generic erectile dysfunction drugs are available in 2016. There's money to be made between now and then -- Stendra is arguably a better drug -- but investing a lot of resources convincing doctors that it's better doesn't make a lot of sense.

That left specialty pharmas as the only option for partnering. Auxilium is certainly a good fit since it already has sales people visiting target doctors. With the royalties and the thresholds for sales milestones kept a secret, it's hard to know who got the better end of the deal here. VIVUS is up on the news, but I think that might be mostly because investors are relieved that the deal is done and VIVUS can focus on its obesity drug Qsymia.

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The article Is That a Marketing Partner in Your Pocket or Are You Just Happy to See Me? originally appeared on Fool.com.

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