Roche narrows Xenical contenders

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The review for Hoffmann-La Roche's direct-to-consumer Xenical weight-loss drug account is down to three New York agencies: Y&R Advertising, Ogilvy & Mather and Jordan McGrath Case & Partners/Euro RSCG.

The agencies met with Roche officials last week to learn details about the product and have until mid-June to submit a formal pitch that includes prospective creative, strategy and a media plan. A decision is expected soon after.

A Roche spokesman did not immediately return a call seeking comment.

Roche parted ways with the Lowe Group on the account last month, giving rise to speculation that the marketer believes the much-ballyhooed drug has underperformed. Xenical remains a marketing challenge because of the drug's disquieting potential side effects, such as gas or an urgent and hard-to-control need to go to the restroom.

REVIEW COMMITTEE

Roche spent handsomely behind Xenical after it began a DTC campaign in October -- some $94 million through January, according to Competitive Media Reporting. Some industry observers said the company might slash or even abandon DTC efforts after the Lowe split, but the swiftly moving review seems to contradict that.

A separate review also was down to three undisclosed finalists for the Xenical physician-targeted account.

Lowe Group had both duties with Lowe Consumer Healthcare and Lowe McAdams Healthcare, both New York, handling the DTC and professional accounts, respectively.

Roche has put together a 12-person review committee made up of marketing and media executives as well as at least one physician, an executive close to the review said.

The winning shop will be expected to perform creative, media planning and direct marketing responsibilities.

Xenical generated $146 million in U.S. sales from its April 1999 introduction through December, making it the clear market leader in the $321 million anti-obesity category, according to IMS Health. (No. 2 player Meridia from Knoll Pharmaceuticals Co. had $102 million in sales for the full year.) But Xenical failed to take off in the fashion of some other lifestyle drugs such as Pfizer's Viagra, which posted more than $581 million in sales.

BEST DAYS YET TO COME

Roche CEO Franz Humer recently took pains to assure investors the drug's best days are ahead of it. At a shareholders meeting earlier this month, Mr. Humer expressed confidence that sales will rise during the next year.

Xenical saw increased sales during each of the first three months of 2000, according to IMS, rising from $17 million in January to $18 million in February to $23 million in March.

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