The New Biotech Media Blitz

Watch television or read a magazine and you're bound to see direct-to-consumer advertisements for prescription drugs. Some are more memorable than others, but their purpose is clear: get you to the doctor to ask for the specific drug.

Direct-to-consumer ads for drugs that treat common illness are pretty widespread. It's not hard to see how ads for erectile dysfunction drugs such as Pfizer's Viagra with its "little blue pill" slogan or the couple sitting in separate bathtubs in commercials for Eli Lilly's Cialis could produce pretty good returns on investments.

But cancer? You don't see too many advertisements for cancer drugs directed at consumers. Doctors tend to make the decisions on which drug to prescribe, so drugmakers tend to focus on them.

Yet two companies recently announced that they're going to start direct-to-consumer advertisement campaigns. Dendreon (NASDAQOTH: DNDNQ  ) plans to start running television commercials for its prostate cancer treatment, Provenge, in the second quarter, and Spectrum Pharmaceuticals (NASDAQ: SPPI  ) said it plans to increase its message to consumers, encouraging them to ask for its lymphoma drug Zevalin.

Both Provenge and Zevalin have underperformed their potential in large part because they offer a different paradigm in drug delivery. Doctors tend to be a little slow to change, especially if it isn't in their financial interest -- cynical, but true.

Provenge is an immunotherapy that has to be infused a couple of times over a month. Doctors have had to foot the bill for the treatment until they can be reimbursed by Medicare or insurers. Zevalin administration has to be overseen by a nuclear medicine specialist because it's radioactive. Doctors aren't particularly fond of either scenario.

If done right, the advertisements will likely increase the number of patients asking their doctors about Provenge and Zevalin, but I don't know if that'll translate into doctors wanting to prescribe them more. If Dendreon and Spectrum haven't been able to convince doctors to prescribe their drugs while pleading to them directly, I'm not sure patients will change their minds. And most patients are likely to defer to their doctor's decision, especially for something like cancer where the patient's life is on the line.

We'll know soon enough whether the advertisements are worth the investment. Dendreon said its campaign will cost about $5 million per quarter, so it needs to increase sales by $10 million -- assuming a 50% profit margin -- to justify the campaign.

Want market-beating returns direct to you?
If you're an investor looking for big long-term winners, Motley Fool co-founder David Gardner's picks have frequently trounced the market. How? Because he's always on the lookout for revolutionary stocks and recommends them before Wall Street catches on to their disruptive potential. If you're interested in how David discovers his winners, click here to get instant access to a personal tour behind David's Supernova service.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2199021, ~/Articles/ArticleHandler.aspx, 12/21/2014 8:27:41 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement