By Randall Osborne
West Coast Editor
To market its bowel-scouring tablet Diacol, InKine Pharmaceutical Co. signed a letter of intent with Innovex Inc. - yet another example of a biotech firm turning directly to the contract sales organization for help.
"It's a dedicated sales force," said Stephen Casey, vice president of sales and marketing at InKine, of Blue Bell, Pa.
Some outsourced marketing arrangements use syndication, in which the drug makers pay for "positions" - that is, for order-of-mention by salespeople offering multiple firms' products. In contrast, InKine's deal lets the company "cherry-pick" the salespeople, Casey said.
"We're still paying the freight on them, but we don't have to have them in on a full-employee basis," he said. "We intend to take these people internally, when we can."
Companies that forged earlier, similar deals with Innovex, a subsidiary of Quintiles Transnational Corp., of Research Triangle Park, N.C., are CV Therapeutics Inc. and Cell Pathways Inc.
In November, InKine submitted its first new drug application for Diacol, a patented anhydrous sodium phosphate tablet designed as a purgative agent for adults undergoing colonoscopic testing. The drug cleans the bowel so doctors can view polyps and detect early colon cancer. Launch of Diacol is expected in the fourth quarter of this year or early next year, Casey said.
How much InKine will save by using Innovex is unclear, and depends on how many salespeople will be required to nail down 50 percent of the market, which is the initial target, Casey said, adding that costs of the deal are still under discussion.
"We were thinking between 15 and 40 [salespeople]," Casey said. "You base it on where you'll meet the point of diminishing returns."
A full-time salesperson would cost the company between $125,000 and $130,000 per year, he said, and hiring a crew before the drug is approved gets expensive quickly.
"You're paying them about $356 per day to sit at home," Casey said.
Innovex, on the other hand, "guarantees you'll have a sales force to your parameters in eight to 12 weeks," he said. "When we see the approvable letter, that's when we'll start pulling the trigger."
InKine also has hired Integrated Commercialization Solutions (ICS) to handle supply chain management. ICS, of Dallas, will handle customer service, order management, distribution, accounts receivables and distribution of promotional material.
"They already have the processes in place to handle Medicare, Medicaid and all the chargebacks," Casey said. "All the warehousing will be done through them," he added, and InKine expects to save about $1.5 million over three years as a result.
"It's a huge outsourcing situation, and it leaves the jobs to the people who specialize in them," he said, a strategy particularly important for a biotech firm gearing up to launch its first product. InKine also has its orally administered steroid, CBP-1011, in a Phase III study in idiopathic thrombocytopenic purpura and Phase II studies for both Crohn's disease and ulcerative colitis.
The main advantage of using Innovex is not cost, but speed to market with a dedicated sales force, Casey said.
"If [we were] just buying a position, that's exactly what a big pharma company would do for us," he said.
Casey said InKine's competitors are liquid polyethylene glycol solutions with electrolytes, consumed in 4-liter doses by patients before colonoscopies.
"It's the Katie Couric stuff," he said, referring to an on-air procedure undergone by the NBC-TV news correspondent in March. Couric's husband had died of colon cancer two years earlier.
The solution "tastes like very viscous salt water," Casey said. "Sometimes you get it with flavoring, but it really gets to you after a while."
A year ago, CV Therapeutics, of Palo Alto, Calif., signed up Innovex in an arrangement that meant $5 million up front to CV Therapeutics and a $10 million loan on approval, and was expected to save CV Therapeutics $110 million in sales costs during the first five years of marketing. Ranolazine, the company's drug for stable angina, is in Phase III trials. (See BioWorld Today, May 12, 1999, p. 1.)
CV Therapeutics estimated it would retain about 90 percent of the profits for ranolazine, using for five years a dedicated Innovex sales force of 75 to 100 people, with - like InKine - the right to keep that sales force.
Earlier this year, Cell Pathways, of Horsham, Pa., entered a similar deal for its lead product, Aptosyn (exisulind), an oral cancer medication designed to trigger cell death by apoptosis in abnormal precancerous and cancerous cells without the toxicities of other therapeutic agents. It comes from a new class of compounds called selective apoptotic anti-neoplastic drugs. The company filed a new drug application in August for patients with familial adenomatous polyposis. (See BioWorld Today, Jan. 27, 2000, p. 1.)
"Cell Pathways "is doing it basically the same way [as InKine]," Casey said.
InKine's stock (NASDAQ:INKP) closed Tuesday at $6, up $12.5 cents.