Specialty pharmaceutical company Auxilium Pharmaceuticals (NASDAQ:AUXL) has inked a deal with GlaxoSmithKline (NYSE:GSK) to co-promote its testosterone replacement therapy gel Testim in a bid to grab a bigger slice of the primary care physician market, which accounts for 70 percent of TRT gel prescriptions, according to a conference call detailing the deal.
The deal, scheduled to start in the third quarter this year, will last through September 2015. It prompted Auxilium to add $10 million to its projected revenue for 2012 to as much as $315 million and reduce net losses to $5 million to $10 million. Last year, it had net revenue of $264.3 million with net losses of $32.9 million.
Although details of the deal are still being worked out, GSK will get a majority of revenue above baseline sales.
Testim is used to treat hypogonadism, a condition in which there is reduced or no secretion of testosterone that can lead to symptoms such as low energy, loss of libido, adverse changes in body composition, irritability and poor concentration. Although the Malvern, Pennsylvania-based company launched the TRT gel in 2003, it has had greater competition for market share with rival products from Endo Pharmaceuticals, Lilly and Abbott.
With TRT increasingly prescribed by primary care physicians as well as urologists and endocrinologists, Auxilium is hoping its Big Pharma deal will help it wrest back market share from the increased pool of rivals in the market. The co-promotion deal will target the 39,000 physicians responsible for 80 percent of gel prescriptions. U.S. prescriptions for Testim grew 22 percent from 2005 to 2011, with primary care physicians accounting for 59 percent.
The deal comes at an interesting time for Auxilium as it awaits approval from the U.S. Food and Drug Administration on a new indication for its drug Xiaflex to treat Peyronie’s disease later this year. The company is hoping that a more expansive relationship with urologists as part of the co-promotion deal could help lay the groundwork for the company’s success with the new application.
