LEADING NATIONAL ADVERTISERS;ACID BLOCKERS ON WAY TO ETCHING OUT A $2 BILLION SEGMENT : ANTACIDS PUT UP LACKLUSTER FIGHT; ONE BRAND EVEN RESORTS TO A KIDS' VERSION

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The arrival of the H2-blockers has turned the stomach remedies' market inside out.

And they keep coming.

Axid AR, the joint venture of American Home Products and Eli Lilly & Co., entered the market in June, a month after the debut of Zantac 75 from Warner-Lambert Consumer Healthcare.

They joined Johnson & Johnson/Merck's Pepcid AC, first to cross over-the-counter in spring 1995, and Tagamet HB from SmithKline Beecham.

BIG EARLY BUDGETS

Backed by a collective $350 million in advertising/marketing, the H2s have expanded the category 30% to $1.45 billion in the year-to-date period ended May 26, according to Information Resources Inc.

Virtually all category growth is credited to the H2s, which block acid production in the stomach unlike antacids, which neutralize existing acid. Clearly, such growth will slow down; consultants estimate a topping out of the category near $2 billion by 1998.

"These numbers will be hard to sustain, but there is still room for substantial growth since a lot of these [acid-blocker] brands are still early entries," says analyst Tom Chetrick at consultancy NCI.

MARKET SHARE FLIPS

Market shares are in such flux that the brand hierarchy at yearend has all but tumbled. By midyear '96, J&J/Merck's Mylanta had slumped from a leading 12.9% of market to 10.5% and third place.

In the same period, Pepcid AC rose from 10.2% of market to a leading 16.9% share and Tagamet climbed from 5.3% to 8.5% to claim fifth. Tums remained second, although it slipped 1.4 points to 11%, while private label dropped 1.2 points to 9.5% and fourth.

The antacids have put up a lackluster fight, except for Maalox from Ciba-Geigy, now Novartis after its merger with Sandoz. Emphasizing the speed of action that acid blockers lack, Ciba rolled out a $25 million "One Minute Maalox" campaign in June on top of the $8 million in media it had spent earlier in the year.

J&J/Merck, obviously believing there's room for both its Pepcid AC and Mylanta in America's stomach, continued to plug away with the "My Doctor Said Mylanta" campaign, spending nearly $10 million in first quarter. A few eyebrows were raised as J&J/Merck introduced Children's Mylanta in June, backed by up to $7 million.

Some industry observers may question the need for a children's product treating an adult ailment, but others are citing a $40 million potential market for children's heartburn.

Warner-Lambert repackaged Rolaids, added magnesium and introduced a campaign in June that emphasized quick relief and better acid absorption than competitor Tums.

TUMS FIGHTING BACK

Tums, protecting its share best, lost just 2% of its sales, to $159.7 million. A sugar-free orange cream flavor containing NutraSweet was introduced in May and the brand continued to push its calcium ingredient.

Bayer Corp., which has reported it may spin off its pharmaceuticals division, broke a $16 million Alka-Seltzer campaign in early summer and an Alka-Seltzer anti-gas liquid gelcaps extension soon followed.

Procter & Gamble Co.'s Pepto-Bismol, sliding from 7.8% of market at yearend to 6.8% six months later, got a $15 million multimedia campaign with tagline, "All your stomach needs," and a heritage message rather than one of efficacy. Industry consultants see little else for the OTC brand to do.

Pepto-Bismol may get a boost if P&G effectively plays up the stomach remedy's inclusion in the recently Food & Drug Administration-approved prescription ulcer remedy, Helidac Therapy. The therapy includes a chewable version of Pepto-Bismol and two antibiotics, all taken four times daily. Although fully prescription, Helidac likely will be advertised to the consumer.

FDA'S POWERFUL EFFECT

As gatekeeper, FDA has had a huge impact on the category, both refereeing the various fights over claims put forth by the acid blockers and approving the release of the new drugs into the consumer market.

When that release happens, the flood gates open. When Zantac 75 hit the shelves in May, it was packaged with $125 million in marketing spending. With such a fat wallet and a reputation as the world's leading prescription drug in sales, little wonder the brand has become the category's third-best seller over the summer, according to insiders.

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