CG,
I see no payback until the second year and can verify
that this product is old and with a declining sales
profile.
It seems to be stronger in the UK while it still sells
in other markets - but this may be why the Pennsaid
advertising featured the word Diclofenac.
I agree with your summary of the situation especially with
regard to the fact its already there and its the sales
presentation part that is most relevant.
This drug is indicated for Rheumatoid arthritis and I saw
no mention of Osteo although there were several mentions
of sports injuries and inflammation.
The numbers work out roughly:
107,000 at 80% is 133,750 pounds Sterling (can we all
agree just to put an 'S' in the future?) gross sales.
That's 6,955,000 S a year in sales.
Profit on that would be 5,564,000 S.
Profit after the 80,000 S a week to Parke-Davis is
1,404,000 S.
Since they're paying 1,900,000 up front plus something
around 800,000 for the existing inventory - they project
beginning a return on investment very late in the second
year.
Meantime Parke-Davis is getting 59.8% of revenues for
close to 3 years plus the 2,7 million or so upfront.
The key is they also drop sales effort, warehousing and
(not mentioned) manufacturing costs.
While Provalis doubles its healthcare sales, shows a
good revenue growth, and has a product that a few years
out should start paying off as an already firmly established
product.
I don't see long term sales effort by Provalis. This is
a little like buying the Aspirin product. Everybody
already knows what it is. Campaigns to sell its features
aren't in the cards. The effort will be to let all the
right parties know this is now sold by Provalis and this
may provide a bit more presence for them in the healthcare
community.
Market agrees with you. Non event for Dimethaid.
Wolf |
