This document summarizes the case study of the new product launch of Oxytrol, an overactive bladder treatment, by Watson Pharmaceuticals from 2001-2008. It describes how Watson had high expectations for $200 million in peak annual sales but the product faced challenges in adoption. While it saw initial uptake, prescriptions stalled after a few months. Though Watson continued optimistic projections, by 2005 Oxytrol only achieved a 2.2% market share and showed little organic growth thereafter. The launch was ultimately deemed unsuccessful as sales failed to meet goals.

1. New Product Launch
Adoption Stall Case Study
(At Least the Kool Aid Tasted Good)
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2. The Case: Pre-launch

3. The Love Affair Begins
December 6th 2001
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4. Watson Establishes the Revenue Goal
The OAB market in the
United States alone
grew from just $40
million in 1997 to
around $1 billion in 2002
(2400% growth)
$200 million peak
annual sales
demonstrates they are
planning to be a 3rd /4th
line agent.
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5. How Can We Fail?
“If all we get is a small percentage”
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6. Does this not suggest a
high rate of treatment
failure?
Do physicians
understand this?
To what degree do they
care?
How does persistency
impact Rx behavior?
Here’s a Problem
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7. Our Solution!
“We win… at least in a clinical trial”
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8. We Win!
“Or do we?”
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9. How does this
compare to the
competition?
Detrol LA =
80% Reduction
6.25% worse
performance versus
Detrol LA
But Wait We Work!
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10. Position on the Basis of Side Effects
Oxybutynin is not the
Gold Standard Detrol
LA is.
Let me know when you
are sure!?!?!
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11. Same Old Approach
Potential vs.
Probable
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12. Same Old Approach
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13. Mass Targeting
Potential versus Probable Targeting
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14. The Mass Gets Bigger
Potential versus Probable Targeting
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15. The Case: The Launch

16. Traditional Approach:
Pre-launch Promotion
If we launch it they will come!
SStrtaratteeggiicc MMaatrtirxix
Offensive Defensive
?
(x-sell)
Guerilla Flanking
What problem is Oxytrol Targeting?
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17. Communication to Physicians
Positioned as a First Line Therapy
Metric Placebo (n=114) Uni-Det (n=125) Oxytrol (n=122)
Mean incontinence episodes / day 5.0 to 2.9 -(42%) 5.0 to 1. (-80%) 4.7 to 1.9 (-60%)
Complete continence 22% 39% 38%
Micturition frequency decrease 1.4 episodes/day 2.2 episodes/day mean of 1.9 episodes/day
Average void volume increase 32 mL/void 29 mL/void
Quality-of-life scores significantly improved significantly improved
systemic adverse events 15 29 (23.2%) 23 (18.8%)
Anticholinergic adverse effects 7.30% 4.10%
Constipation 5.70% 3.30%
Localized Skin Reactions 7 7 32 (26%)
Treatment Discontinuation 2 (1.6%) 13 (10.7%)
12 (10%) due to skin
2% typical with Estraderm
HHoowweevveerr……
$$220000 mmiilllliioonn ppeeaakk aannnnuuaall ssaalleess ddeemmoonnssttrraatteess tthheeyy aarree
ppllaannnniinngg ttoo bbee aa 33rrdd // 44tthh lliinnee aaggeenntt..
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18. Communication to Salesforce vs.
Communication to Physicians
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19. First Month
Oxytrol Promotion initiated in
May 2003.
Good initial uptake!?
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20. EEaarrllyy WWaarrnniinngg SSiiggnn ooff TTrroouubbllee
Seven weeks Post Launch (Mid June 2003)
Source: Watson Pharma
2,299 Rxs
1% NRx share
Friedman, Billings, Ramsey Co - 10 July 2003
….the key catalyst for Watson`s upcoming quarterly results remains the Oxytrol launch (May 19) and
overall earnings execution. Script numbers indicate that Oxytrol has achieved about 2.1% market share as
of last week. This is a decent achievement, but sales (even including inventory build) likely won`t hit our
estimate of $9M for Q2, part of which will be shifted to Q3.
Prescription Data for Specialty Companies: Week Ended Aug. 1
Source: Raymond James
Total prescriptions for Watson’s branded patch for incontinence, Oxytrol, were 2,791 in the week ended
August 1, up from 2,605 the prior week. Watson launched Oxytrol in April and began promoting it in May.
We project $35 million in 2003 Oxytrol sales this year, within a range of $25 million to $40 million the
company is targeting.
+21%, but…
Re-fill Rate
Is low
Experience
Trial Issue
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21. 2nd Month
Evidence of Adoption Stall
exists
Source: Goldman Sachs Annual Healthcare Conference June 2003
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22. FY 2003 Results
Oxytrol brought in $23 million in revenues
in 2003, which was well short of original
expectations of $50 million….
The already-crowded market will become
more so as two additional companies enter
the fray later this year, which may well mean
Watson won't sell $50 million worth of the
drug this year either.
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23. Week ending March 15 2004
7.1%
8.9%
3.8%
Under performing
3rd Month
This Data suggest growth is due to category growth not organic growth
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24. 7.1%
8.9%
3.8%
Week ending
April 15 2004
(3.4%) Growth
1.4% Growth
4th Month
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25. The Hole Get Deeper
Early 2004
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26. This is Success?
June 28th, 2004
As a result of this refocusing effort, the Company intends to terminate its
contract sales force agreement with Ventiv Health, Inc. in the primary care area.
As we approached the one year anniversary of the launch of OXYTROL(R), it
was appropriate that we evaluate our efforts and assess the current competitive
environment, continued Dr. Chao. While we have had success with
OXYTROL(R) in the specialty urology and OB/GYN markets, we have faced
challenges in the primary care market.
Specialty TRx TRx Growth
March April
URO 18,792 18,881 0.47%
OB/GYN 7,866 7,800 (0.83%)
PCP 17,043 17,639 3.49%
??
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27. Still Drinking the Kool Aid
June 28th, 2004
2004 Sales Tracking
Q1 = $8.0 million
Q2 = $8.7 million
Q3 = Sales force reductions = sales probable revenue drop
2004 Sales
Company Projection = $55 million
Our Projection = ~$33 million
Revised Company Projection = $47 million
which requires
81% growth rest of year !?!?!
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28. News
August 3rd, 2004
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29. Since April 2004
2% Growth
14% Growth
Share Growth FLAT
Category Growth
Sales Curve Dips After 17 Months
September 16th, 2004
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30. Salesforce De-motivated
October 10th, 2004
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31. News
October 27th, 2004
Oxytrol(R) sales of $9.8 million for the three months
and $24.3 million for nine months ended September
30, 2004
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32. JP Morgan Conference
January 11th, 2005
0% Growth
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33. FY 2004 Results
Sales of Watson's OXYTROL(R) product increased $4.2
million to $13.8 million for the fourth quarter of 2004,
compared to $9.6 million in the prior year period.
$23 million 2003 sales - $50 million target
$38.1 million 2004 sales - $1.4 billion US market 2004
(3% share of revenue)
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34. FY 2004 Results
No Growth
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35. FY 2005 Results
Share Shrinks / Growth from re-fills
Also in urology, our OXYTROL® product
achieved $43 million in sales, a 13% increase from 2004.
2005 OAB Mkt Stats
Market Size = $2.5 billion
Growth = 10.8%
2.2% Share 2.2% Organic
Growth
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36. FY 2006 / 2007 / Results
No Reported Sales
Brand segment selling and marketing expenses
decreased during the year ended December 31,
2006 as compared to the prior year due to lower
product spending for Oxytrol® during the current
year.
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37. 2008 Results
Oxytrol (oxybutynin transdermal system) had
annual sales of approximately $39 million in the
U.S., based on IMS sales data ending August 2008 5
years post launch!
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38. © Copyright The Customer Management Group 2014 38