To determine the potential earnings for the OTC version of Oxytrol, consider that Pfizer earns roughly $700 million in annual sales of Detrol LA. And while it’s too early to tell how much Merck will profit from its OTC version, given that many women don’t visit a doctor for an OAB prescription due to embarrassment or shame, an OTC medication will definitely become an attractive alternative.
With new FDA approval standards, the potential for upcoming competition in the OTC market may hit Merck faster than expected – especially if this version of Oxytrol sells well. In addition to selling generic versions of prescription OAB medications, pharmaceutical companies may try to gain FDA approval for OTC versions as well.
Also, for the time being, only women can use the medication. Actavis will continue to offer a prescription version for men. Many estimates show that at least 13 million men suffer from overactive bladder – this means a good chunk of the market does not have an OTC alternative. Merck should jump on the opportunity to gain FDA approval for a men’s version as soon as possible to adequately cater to this segment of the market before other companies enter it.
Merck should also consider manufacturing its own generic OAB prescription version once the patents expire to make it reach all facets of the OAB market.
Investing in Merck
Even though entering the OAB market won’t have a huge impact on Merck’s overall sales/revenue, investors should consider management decisions that include applying for FDA approval for an OTC drug treatment for a condition most women find too embarrassing to see their doctor about and applaud the company’s ingenuity and foresight. In addition to sound decisions, the company reported stable third quarter earnings for 2012. With sales/revenue of $11.5 billion, net income of $1.73 billion, and free cash flow of $1.43 billion, the company should remain a good investment throughout 2013.
The article Merck Scores In The Declining OAB Therapeutics Market originally appeared on Fool.com and is written by Maxwell Fisher.
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