Thursday, December 4, 2003

Osteoporosis drug closes in on $1B mark

By Cliff Peale
The Cincinnati Enquirer

Actonel, Procter & Gamble Co.'s 3-year-old osteoporosis drug, should hit $1 billion in global sales during 2004.

Introduced only in 2000, with the once-a-week version unveiled in May 2002, Actonel will become P&G's first pharmaceutical brand to pass the $1 billion mark, and 14th overall.

• Approved for treatment of osteoporosis.
• Introduced in 2000 in a once-a-day version.
• More than 80 percent of the business is from the once-a-week version, which was introduced in 2002.
• The weekly version is approved for sale in more than 60 countries.
The milestone signals how important health and beauty care brands have become to P&G's growth. That will be the story P&G will push to Wall Street analysts next week when they visit Cincinnati, and specifically the company's Health Care Research Center in Mason.

That's where Actonel was developed. Much of the planning for P&G's personal health care brands, such as Crest, is done there as well.

Those categories - including shampoo, toothpaste, hair color and pharmaceuticals - generally grow faster than others in which P&G is dominant, such as detergent or diapers. And because the products cost less and take less time to make, overhead costs are lower.

So in order to meet its pledge to Wall Street to increase sales 4 percent to 6 percent a year, P&G is relying on health and beauty care, and brands like Actonel, to lead the growth.

Chairman and chief executive A.G. Lafley has made the billion-dollar brands the focus of P&G's strategy, giving them the bulk of marketing and research funds.

Of P&G's 13 billion-dollar brands, only four are in health care or beauty care. But that includes the last three to pass the mark - Iams, Olay and Crest.

And after Actonel, other brands known to be close to the threshold are also in those businesses, including Head & Shoulders shampoo.

As for Actonel, it started strong and piled up sales of more than $275 million during calendar year 2001. By mid-2003, annual sales had more than doubled to $600 million.

Much of the growth was driven by the once-a-week version, which P&G introduced in 2002. About 85 percent of the Actonel business comes from that version, a spokeswoman said.

Overall, Actonel is approved for sale in more than 60 countries for the weekly version.


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