Taro Foresees OTC Licensing Deals For Cough/Cold Pediatric Delivery System

Taro Consumer Healthcare Products will consider licensing its NonSpil drug delivery system, used in the firm's ElixSure line of cough/cold medicines for children, to other over-the-counter drug manufacturers.

Taro believes it has a large opportunity for licensing NonSpil for use in OTC and Rx drug products, such as Wyeth's Robitussin or Pfizer's Zyrtec , according to the firm.

The company added that, on the prescription side, the delivery system could be employed by Rx firms seeking to make line extensions to lengthen the patent life of their drugs.

Commenting on the technology during a Sept. 9 presentation at Bear Sterns Healthcare Conference in New York City, Taro Pharmaceutical CEO Barry Leavitt said "there was a need in pediatrics for changing the environment of giving medicines to children."

"Instead of having a battleground between parents and children with parents holding the spoon of medicine that spills all over the parent, the child and the floor, we decided to develop something that would answer this need," Leavitt continued.

Therefore, "we developed the [NonSpil] spill-resistant liquid vehicle, which pours, but it does not spill, into which we can incorporate both OTC and Rx medicines."

NonSpil is a highly shear-sensitive gel that changes the flow properties of liquid medication, allowing it to pour smoothly, resist spilling and dissolve easily in the patient's mouth, Taro says.

Taro uses Nonspil in its ElixSure Fever/Pain (acetaminophen), Cough (dextromethorphan) and Congestion (pseudoephedrine) formulas which retail for about $5.99 per 4 fl. oz. bottle. The ElixSure line began shipping to food, drug and mass outlet retailers in June (¹ (Also see "Taro ElixSure “Spill-Resistant” Cough/Cold Medicines For Children Debut" - Pink Sheet, 23 Jun, 2003.), p. 8).

ElixSure will be supported by a $22 mil. promotional spending campaign through 2004, which will include $10 mil. in print, television and media ads, according to Taro.

Fifteen-second TV spots designed by Irvington, N.Y.-based Carrafiello, Diehl & Associates are slated to appear on all major network stations before October.

Print media ads will break simultaneously in women's and parenting magazines including Redbook, People, Good Housekeeping and Parents. In addition, two full-page $1-off FSIs are planned for October and January.

Leavitt explained that Taro Consumer Healthcare Products division was established in late 2002 as a way to market proprietary OTC products directly to consumers.

The division "leverages some of the management team's expertise," he added, saying "many of the people who are in management [at Taro Pharmaceuticals] came from big pharma's...OTC side of the business."

Besides the ElixSure brand, Taro Consumer Healthcare Products also manufactures Kerasal exfoliating foot moisturizer, which launched in early 2003 and "has performed very well in the market," according to Leavitt.

The exec noted that Taro expects to complete construction of a research facility in 2004 that will complement its recently acquired manufacturing plant in Roscrea, Ireland.

The firm is moving operations to Ireland "to increase and diversify our manufacturing capacity [and] to have a platform for our European initiatives," Leavitt said. "The plant that we acquired was licensed by the Irish Medicines Bureau, so it has got manufacturing license for...the European economic community," thus positioning Taro to expand its sales base in that region.

Currently, 87% of Taro's sales are in the U.S., 6 % in Canada, 5% in Israel and 2% in the rest of the world. Excluding branded consumer products, the company sells Rx and OTC generic and Rx branded drugs.

Taro Pharmaceuticals sales totaled $143.7 mil. with net income of $28.8 mil. in the first half of 2003, ended June 30. The numbers represent increases of 50% and 44%, respectively, compared to the prior year period.

As of Sept. 5, Leavitt noted the firm had 33 ANDA filings with FDA including 22 for topical dermatologic products. Taro received tentative ANDA approval for loratadine syrup 10 mg/10mL on June 27 (² (Also see "Impax, Schering Patent Litigation Continues Despite Claritin-D Agreement" - Pink Sheet, 1 Jul, 2002.), p. 4).