Glaxo said the issue wasn't a lack of interested buyers, but manufacturing problems that have led to shortages of the diet pill and forced the company to delay the product's sale. "We have had interest from potential buyers and our intention is still to sell Alli," a Glaxo spokeswoman said.
Glaxo launched Alli in 2007 with much fanfare and a heavy marketing budget, touting the product as a potential blockbuster capable of achieving annual sales of $1 billion. But sales never took off, and the drug was hurt by reports that a small number of people taking it experienced liver damage.
Glaxo said last year it planned to sell Alli along with a number of nonprescription products with a total of £500 million ($800 million) in annual sales. On Friday, it said it had sold the rights outside North America and Canada for brands including the laxative Phillips MOM and the heartburn medicine Zantac to Aspen Pharmacare Holdings Ltd. for £164 million. Combined with other OTC products divested in recent months, Glaxo said it has now earned £981 million on the sales.
Alli works by blocking the gut from absorbing some fat from food. It is a weaker, nonprescription version of the prescription drug Xenical, which is marketed by Roche Holding ROG.VX +2.31% AG. Roche manufactures the active ingredient for both Xenical and Alli at a factory in the U.S. that has been hit by problems, causing shortages of both drugs.
When Glaxo launched Alli, it backed the drug with an extravagant marketing campaign that included television, print and Internet ads and elaborate in-store displays. It set up a website where Alli users could swap dieting tips and get advice from dieticians. Glaxo even published a book with diet advice and recipes, which it sold at drugstores.
But sales sputtered soon after the June 2007 U.S. launch. Glaxo sold £150 million of Alli that year, and only £75 million in 2008. Sales rallied in 2009 to £203 million as Glaxo launched Alli throughout Europe, but the company acknowledged last year that demand for the drug was falling in the U.S. and Europe. The company didn't break out Alli sales in 2010 or 2011.
In 2010, the U.S. Food and Drug Administration said both Alli and Xenical should carry new warnings about rare reports of "severe liver injury," although the agency said it wasn't clear whether the drugs caused the injury.
Glaxo has always defended Alli's safety, calling it "safe and effective when used as directed." The company said it was selling Alli and the other OTC brands because it "lacked sufficient critical mass in some product categories and certain brands have lacked focus due to other global priorities."
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