The H1N1 Flu "Pandemic": Our prediction of the progress and severity of the 2009
H1N1 flu proved better than most governmental health agencies and media
outlets. We predicted that the flu's progress would best be prognosticated by
the 1977 H1N1 outbreak. In both 1977 and 2008-09 H1N1 abruptly reappeared after
years of absence as it shifted both genetically and demographically affecting
younger age groups. The attack rate and virulence (severity) of these new
strains did not cause the expected morbidity and mortality well beyond the
typical annual range. Concern was ramped up by the WHO and others who
repeatedly referenced the pandemics of 1918, 1957 [H2N2] and 1968 [H3N2] and a
doomsday scenario.
Sanofi Buys A Sales Force &
Trade Channel: Sanofi's purchase of Chattem was
the subject of a OTCPN press release offering insights not found elsewhere. We
see this marriage of convenience as part of Sanofi's global tactical plan to
bolt-on acquisitions of various OTC (and Rx) companies worldwide thereby
downshifting the risk profile of their corporate portfolio. Nevertheless, the
primary purpose of the Chattem purchase is as a conduit to sell OTC Allegra
into the US trade. We remain skeptical that this unusual partnership of big
Europharma and a thin, opportunistic Southern brand acquirer, while accretive,
will result in long term synergies beyond their cash-rich balance sheet, high
gross margins, and immediate access to the trade channel.
P&G's Healthcare Product
Failures: Early in 2009 we perceived a
systemic problem affecting the quality and design of P&G's healthcare
products. Sure enough P&G didn't disappoint as they blundered into a string
of self-inflicted, corroborating examples of this predilection.
Tylenol's Vulnerability: Up until recently J&J's Tylenol was the Tiger Woods of
analgesics - squeeky clean and brillently effective. In 2009 the hidden
vulnerabilities of the brand, that were always known to insiders, began to expose
themselves. Tylenol suffered a series of bad press moments including a sweeping
FDA mandate to reduce the drug's dose exposure across the board. We saw this
coming, but not the later plant contaminations, nor the reports of unexpected
effects on the immune system and asthma.
Topical Analgesic Patch Uncertainty: Early in the year we pointed out that the pending FDA
external analgesic monograph closure and the judicial docket of the LecTec
patent infringement suit had the potential to disrupt the analgesic patch
category. On the legal front we strongly favored the plaintiff, which proved
correct, as several of the co-defendants settled with LecTec. One defendant
(Chattem) is now acquired by deeper pockets (Sanofi) while one other remains
{J&J]. On the regulatory front we were also correct in predicting pending
monograph closure and that the FDA would balk at giving patches a free pass by
inclusion.
[Dr. Riker is a former Associate Director,
Personal Healthcare at Procter & Gamble, and Chattem's last Vice President
of R&D & Chief Scientific Officer. He was a key player in the creation
of Chattem's R&D capability, the Rx/OTC switch of Prilosec, the Vicks
Inhaler recall, CHPA's defense of topical patches, and the clinical evaluation
of anti-histamines in OTC colds and allergy products]
Donald Kay Riker, Ph.D.
Editor-in-Chief
OTC Product News
Editor-in-Chief
OTC Product News
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