Merck breathes life into Livogen

Font Size

Print

Feedback

Email

Discuss

Mumbai, Oct 4: Merck has turned around Livogen, the nutrition and metabolism related drug, after acquiring it from Glaxo India. The drug has turned around riding on the back of aggressive prescription-based promotions and research findings, which unearthed new uses for it.

Livogen, which had posted sales of around Rs 7.5 crore when it was acquired from Glaxo, is now poised to touch the Rs 14 crore sales mark for the year-ended 2004-05.

Livogen was sold following the merger of Glaxo and Smithkline Beecham. It is selling for over Rs 1 crore per month. Industry analysts estimate a steady growth of 10-15% for the product in the next few years.

“The brand has made around 80% growth during the last two years. We have really turned it around,” a senior Merck official said. The main reason for the uplift of the brand is the intense promotion undertaken by Merck Ltd, he added. Retailers say that the prescriptions have nearly tripled after the acquisition by the German subsidiary in India. According to industry sources, Merck added to the brand a new indication — sub-clinical anaemia (in menstruating women) - which has improved the Livogen sales.

Identified as a tail-end brand (a brand that is lagging behind) by Glaxo India Ltd, Glaxo India had sold the drug for around Rs 8 crore in year 2000 just a little more than its annual sales of Rs 7.5 crore.

Livogen was sold at a price that was at a huge discount to the pharma industry benchmark of around one and a half times the sales figure. This was because GSK had appointed a committee of experts to look at the valuation of Livogen prior to selling it.

Glaxo had sold Livogen as SmithKline’s own haematinic brand Fefol was earning more than Livogen. Fefol and Fefol Z have registered a sales of more than Rs 21 crore in 2001. Compared to Fefol, Livogen was a smaller reveune earner. Several considerations like past performance, future projections and competing product from SKB played a role in the sale of Livogen. According to sources, the company sold it at that price as it thought there would not be any takers at a higher price and waiting any further, especially after the merger with SmithKline, would have eroded the value further.