GlaxoSmithKline's Weight Loss Drug Alli: Just Another Short Lived Superstar

If you're wondering why sanofi-aventis (SNY) would spend so much time and money on a tricky, problematic drug like rimonabant, just take a look at the reception of GlaxoSmithKline's (GSK) over-the-counter version of Xenical (orlistat), brand-named Alli.

What's ridiculous about all the coverage and hype is that the drug isn't (of course) new. And it frankly wasn't all that successful when Roche sold it by prescription. So it goes OTC and everyone goes crazy for it? No, not for long they won't. From what I can see, this is just pent-up demand for something, anything, that will help people lose weight without having to work too hard.

This is not the drug to do that. And that's putting things gently. It is, as it's been rightly termed, "the Antabuse of fat". It's there to keep you on a low-fat diet, and to make you pay if you stray. If you're taking orlistat but go out and eat a bucket of fried chicken, you're going to regret that excursion for years to come. Generally, people just gradually seem to stop taking the stuff regularly, which makes it less likely to do anything, which in turn provides the perfect reason to stop taking it completely.

So my forecast for Alli is strong sales - for a while. Then it takes a dive, never to scale those heights again, as the word gets out. And the demand continues to grow for a weight-loss drug that works. . .

Comments

[Long-Short Guy:]

Related:
<blockquote>
<b>Glaxo's Avandia Pill Faces FDA Warning, Doctor Revolt</b>

July 19 (Bloomberg) -- GlaxoSmithKline Plc's Avandia, tainted by reports linking the drug to increased heart attack risks, may face a long-term decline in use even if U.S. regulators find the diabetes pill is safe.

In May, researchers reported that Avandia, Glaxo's second- biggest revenue producer, may increase chances of heart attacks by 43 percent. Since then sales have slumped as doctors turn to other medicines, and shares of London-based Glaxo have dropped 13 percent, wiping out $23 billion of market value...
</blockquote>

Source:
www.bloomberg.com/apps...;sid=atWSFty05sZA

2007 Jul 22 09:53 AM