GlaxoSmithKline impotent in face of the Viagra challenge

GlaxoSmithKline has given up on its impotence pill, Levitra, in most countries outside the US after it failed to dent sales of Viagra.

The UK's biggest drug maker yesterday sold European and other rights to the product back to its inventor, Bayer of Germany, for €208m (£145m).

Levitra was launched in 2003 but has failed to capture sales from the iconic blue pill which turned male impotence into a multibillion-dollar drug market in the 1990s. It has managed only a poor third in the market for erectile dysfunction medicines, behind Cialis, developed by the US company, Eli Lilly. Levitra works only slightly faster than Viagra and does not last as long as Cialis, which was dubbed "le weekend" in the French market.

Viagra has about 70 per cent of the global market, with Cialis at almost 20 per cent. Bayer admitted last year that sales of Levitra had been disappointing, while GSK showed falling sales of the drug through last year. In the first nine months of 2004, it accounted for just £37m of GSK's £15bn turnover. Some analysts believe about half of Levitra prescriptions were free samples, because competition is so fierce.

GSK and Bayer will continue to co-market Levitra in the US, where television and poster advertising of prescription drugs is allowed and where GSK believes a big marketing push could improve sales. The co-marketing agreement will also continue in Italy, but Bayer will assume sole control of sales in the rest of Europe, Canada and several other countries.

David Stout, the president of GSK's pharmaceutical operations, said: "GSK will continue to be actively involved in marketing the product in the US, Italy and 25 other countries worldwide, and both companies remain firmly committed to its commercial success."

Although the decision to sever the marketing partnership in most countries came at GSK's behest, Bayer said it would enhance its earnings from next year. The company is trying to strengthen its pharmaceuticals business after losing sales of its best-selling medicine, the antibiotic Cipro.

Wolfgang Plischke, the head of Bayer Healthcare's pharmaceuticals division, said buying back Levitra's co-promotion rights "will enhance the group in Europe, Latin America and Asia where we have a strong primary care organisation".

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