The infatuation continues. Merrill:
Aloxi rebound underway
NDC data for Aloxi in July suggest sales are re-accelerating, as Aloxi is regaining
share from generic Zofran, which should allow 3Q Aloxi sales to easily beat
expectations. Importantly, (1) Total Aloxi unit sales in July are up 16% vs. June,
which suggests a smoother quarterly trend as the 1st month of each quarter is
typically down vs. the 3rd month of a quarter, (2) Aloxi should continue to capture
share from generic Zofran, (3) Aloxi should capture an increasing share from
Anzemet, as Anzemet becomes less profitable to physicians. Reiterate BUY.
Aloxi sales up 16% vs. June
Total July Aloxi sales increased 16% vs June on a unit basis, suggesting the drug
is regaining share previously lost to generic Zofran. In addition, we assume Aloxi
monthly sales trends will be smoother going forward due to fewer quota-based
purchase incentives. Historically, the first month of Aloxi sales during a quarter
has represented only 23% of total quarterly sales, since doctors would purchase
the majority of Aloxi in the third month of the quarter. However, starting this
quarter we expect that monthly sales will be more evenly distributed throughout
the quarter.
Aloxi taking generic Zofran share in clinic & physician mkt.
Generic Zofran market share in the clinic & physician setting dropped to 18.3% in
July from 27.9% in June, likely due to decreased Medicare reimbursement
resulting in $2 profit per generic Zofran dose (vs. $46 per dose in the prior 2
quarters). Importantly, Aloxi captured the majority of share lost by generic Zofran
(5.4% of the 9.6% lost), with Aloxi share increasing to 47.9% from 42.5% in June.
We expect the trend to only accelerate. Anzemet captured 3.5% of share lost by
generic Zofran, and Kytril captured 0.9% of share lost by generic Zofran.
Decreasing Anzemet profitability favors Aloxi
Anzemet's Average Selling Price (ASP) is likely to decline going forward, which
will reduce Anzemet's profitability for docs (currently ~$20) and favor share
capture by Aloxi (~$48 profit). Prior to the introduction of generic Zofran, a higher
proportion of Anzemet sales were coming from hospitals using higher priced vials
to treat Post-Operative Nausea and Vomiting (PONV), which drove up the drug's
ASP+6% reimbursement and its profitability for docs. However, more use of
generic Zofran for PONV in hospitals, which are more price sensitive, will reduce
Anzemet's ASP+6% going forward. Thus, we expect Aloxi’s relative profitability to
favor share capture from Anzemet |
