With Biotene Acquisition, Glaxo Tries Again In Dry-Mouth Category

GlaxoSmithKline expands its consumer oral-care business with the acquisition of Laclede's Biotene line of products indicated for dry mouth, or xerostomia.

The pharmaceutical giant will pay $170 million for line, which includes mouthwash, toothpaste and gels and chewing gum, the firm said Oct. 21. The buy also marks a return try for Glaxo to the xerostomia market after divesting Oasis mouthwash earlier this year.

According to GSK, xerostomia is as prevalent as dental sensitivity, affecting around one in five adults. The condition is more common in elderly people, with research showing xerostomia in as much as 47 percent of study participants.

Glaxo's existing oral care portfolio includes Aquafresh and Sensodyne .

The U.S. market accounts for 65 percent of Biotene's sales. The rinse is a top-10 product in the overall mouthwash category, and the full line generated around $50 million in sales in 2007, a 17 percent increase from the previous year.

According to data from market research firm Information Resources, Inc., Biotene mouthwash sales in the 13-week period through Sept. 28, 2008, totaled $4.08 million, making it No. 9 in the mouthwash/dental category with 2.29 percent of total category sales of $178.23 million, excluding sales at Wal-Mart and at service stations and convenience stores.

The top seller in the overall mouthwash category is Johnson & Johnson's Listerine mouthwash, with sales of $54.08 million for the period and 30.3 percent of total revenue. Private-label products were second at $26.5 million, or 14.9 percent, according to IRI's data.

Laclede, based in Rancho Dominguez, Calif., says it has operated for more than 20 years focused entirely on developing biological products for the prevention and treatment of gum disease due to xerostomia. According to the company's Web site, its latest product launch came in April 2006 with Biotene Sensitive toothpaste.

While the transaction is subject to regulatory review in Europe and the U.S., GSK expects to start marketing Biotene products in early 2009.

Common Condition, Many Causes

According to the American Dental Association, side-effects from medications are the most common cause of xerostomia.

More than 400 Rx or OTC medications list dry mouth as a potential adverse effect, including antihistamines, decongestants, painkillers and drugs for treating high blood pressure, urinary incontinence and Parkinson's disease.

The condition also can be caused by Alzheimer's, Parkinson's and salivary gland diseases, diabetes and endocrine disorders, as well as factors including emotional stress and radiation treatment for head and neck cancers, ADA says.

Glaxo says Biotene is a proprietary system based on three enzymes found in healthy mouths - glucose oxidase, lactoperoxidase and lysozme. Augmenting those enzymes in a person's mouth with Biotene helps relieve the symptoms of xerostomia, the firm says.

Biotene, Oasis Moisturizing Mouthwash and Mouth Spray and Gebauer's Salivart Oral Moisturizer are among the products available for treating dry mouth, according to a list issued in October 2007 by the American Academy of Oral Medicine.

Glaxo got out of the dry-mouth product market early this year when it divested the Oasis brand to Gebauer, a Cleveland-based Rx and OTC dental products manufacturer. The firm declined to state the terms of the Oasis deal or to disclose sales data for the line.

Consumer Business Boost

Oral care is a current strength for Glaxo; sales for the quarter grew 7 percent to $581 million, led by Sensodyneand Aquafresh, while its overall consumer business declined 3 percent.

The Biotene deal underscores GSK CEO Andrew Witty's commitment to growing the firm's consumer business. In July, Witty said research and development for OTC products involves lower risk while generating faster revenue compared with prescription drug R&D.

- Malcolm Spicer ([email protected])