Schering-Plough executives have met with representatives of Havas Advertising's Robert A. Becker/Euro RSCG, New York, to discuss the most effective way to shift the Claritin devotees. Clarinex has been touted as a more effective allergy treatment. It is unclear where the discussions will lead, though it is not expected to affect the Schering-Plough relationship with Quantum.
Becker has met with Schering-Plough on similar matters before, an insider said, and the company is said to frequently solicit ideas from agencies beyond WPP Group's Quantum, part of CommonHealth. Schering-Plough's relationship with Quantum may have been bolstered by the return of Steve Andrzejewski-an architect of Claritin's phenomenal success and use of consumer advertising-to head up the Claritin and Clarinex business on the client side. A Schering spokesman said Quantum remains the agency for Claritin and Clarinex and declined to comment on any involvement with Becker. A Becker executive also declined to comment.
Quantum is believed to be readying a high-profile Clarinex launch, while continuing to grapple along with Schering-Plough executives about how to keep Claritin as much of a titan as it has been. Claritin is a huge profit generator in the U.S; third-quarter sales were $728 million, up 4%, according to Schering-Plough, but company executives have said sales are slowing, and that could trim profits moving forward.
Schering-Plough has filed for a Clarinex trademark with the government that includes futuristic lettering with an arch stretching from the "x" to above the "i." A Quantum executive declined to comment.
Agency scrambling aside, one huge question remains that has everyone from Madison Avenue to Wall Street to Kenilworth, N.J., to Rockville, Md., offering a different opinion: When will Clarinex get the go-ahead from the Food and Drug Administration? The Rockville-based FDA made approval of the drug contingent on the Kenilworth-based Schering-Plough fixing manufacturing problems at facilities in Puerto Rico and New Jersey. Those problems brought about the resignation of Raul Cesan, president-chief operating officer.
It is critical for Schering-Plough to receive approval for a Clarinex launch this spring-after the FDA set company plans back a year-since the patent on Claritin is expected to expire late next year. And Schering-Plough needs as much time as it can to convince doctors of Clarinex's efficacy and switch Claritin consumers to it. The "clock is ticking," an industry insider said. Schering-Plough's U.S. pharmaceutical sales in the third quarter were $1.3 billion, a 1% decline from a year ago, and the company acknowledged that sales were impacted by its manufacturing hurdles.
Recent buzz centered on word that Schering-Plough may be near a "consent decree" with the government allowing it to move ahead with Clarinex. But such a deal could still delay the launch for months. And Schering-Plough executives may have developed an allergic reaction to a Nov. 9 report by Sanford C. Bernstein analyst Richard Evans, who said Schering-Plough looks to be involved in major revamping of manufacturing facilities, giving Clarinex "little hope of launching by spring '02." Mr. Evans went on to say that if Clarinex were on schedule for a launch next spring, Schering-Plough's facilities would be in "pre-inspection mode today." "Based on available evidence, this isn't the case," he wrote.
For investors like Mr. Evans' clients, that is something to sneeze at.