Ownership of Sentinel antiparasitic line poised to change

Virbac seeks Novartis veterinary drugs in transaction with Eli Lilly

Published: October 31, 2014
By Edie Lau

Virbac Corp. will purchase Sentinel, a monthly parasite-control drug for dogs, as part of the pending sale of Novartis Animal Health to Eli Lilly and Co.

The three-way deal has Virbac acquiring “a combination of titles and rights for the United States on trademarks, marketing authorizations, patents, know-how, customer lists and other assets” on Sentinel, according to an announcement this week.

The antiparasitic drug comes in two formulations. Sentinel Flavor Tabs is a chewable tablet that contains milbemycin and lufenuron to act against heartworms, roundworms, hookworms, whipworms and fleas. Sentinel Spectrum is a soft chew with the same ingredients plus praziquantel to act against tapeworms.

The prospective transfer to Virbac marks the latest turn in an eventful recent business history for Sentinel.

Sentinel is one of several veterinary drugs made by Novartis Animal Health in which problems arose in late 2011. Novartis stopped producing Sentinel and the anti-heartworm drug Interceptor because of a manufacturing plant shutdown in Lincoln, Nebraska, following U.S. Food and Drug Administration inspections that revealed poor quality control and manufacturing mishaps involving human drugs made there.

Many private-practice veterinarians expressed frustration with Novartis for poor communications during what turned out to be a 16-month halt in production. Some practitioners were perturbed further to find some online and retail pharmacies appeared not to have the same trouble as clinics in obtaining supplies, leading them to suspect Novartis of duplicitous dealings in the gray market — an accusation Novartis denied.

When production resumed in spring 2013, many veterinarians were pleased. But others had switched clients to competing products and were disinclined to switch back. Some expressed reluctance to do business with Novartis again. Also, Novartis discontinued Interceptor. At the same time, it cut the price of Sentinel Flavor Tabs by nearly half. (The company introduced Sentinel Spectrum in early 2014.)

In April, Eli Lilly announced plans to purchase Novartis Animal Health for $5.4 billion, a deal subject to review by the Federal Trade Commission. The acquisition is anticipated to close during the first quarter of 2015.

Whether the ownership change will alter veterinarians’ perceptions of Sentinel is unclear. After all, Virbac has had difficulties of its own. The company recalled its heartworm preventive medication Iverhart in 2009 and again in 2013, both times because some lots had insufficient amounts of the active ingredient.

“We had to call over 100 clients that had purchased the Virbac product and explain to them that the doses they were giving may have been ineffective. We even lost a couple clients permanently as a result of the recall,” Dr. Eric Vymyslicky, a practitioner in Indiana, said in an interview by email. “Although Virbac reimbursed us for the recalled product and resulting heartworm testing we had to do, the client-relations problems it left us with were a little unsettling.”

Despite the tough experience, Vymyslicky said if Virbac buys Sentinel, he expects to continue recommending the drug to dog owners because he thinks it’s a good product.

He did have doubts at one time. During the throes of Novartis’s problems in 2012, Vymyslicky commented on a message board of the Veterinary Information Network, an online community for the profession: “How can one trust a company that cannot make a product safely and according to strict FDA manufacturing standards for the better part of a year? Why should anyone go back to carrying these products?”

Later, Vymyslicky concluded that “scrutiny over the production process ... resolved any quality-control issues.” So, he said, “When Sentinel came back to the market at a much lower price point, it made sense to start recommending it again.”

Another veterinarian, Dr. Andrew Smith in Tennessee, welcomed the news of Virbac’s purchase. Smith said he used Sentinel before Novartis’s production hiatus and now uses both formulations of Sentinel. During the shortage, he said, many clients switched to Trifexis, an oral antiparasitic made by Eli Lilly.

When Sentinel came back at a significantly lower price, it became an “economical alternative to Trifexis,” Smith said by email. Then came word that Lilly would purchase Novartis, and Smith assumed Lilly would discontinue the lower-priced competing product.

“Now that Virbac is getting Sentinel, I have hopes that it will continue to be an economical alternative to Trifexis,” Smith said.

He added that it’s a good alternative, as well, for dog owners who mistrust Trifexis due to persistent rumors and news reports questioning its safety.

Like Vymyslicky, though, Smith noted that Virbac’s record isn’t spotless. “One of my only fears is that Virbac has had more than one instance of quality-control problems with Iverhart Plus or Iverhart Max; I hope that doesn’t bleed over to the Sentinel production,” he said.

Another factor potentially affecting future sales of Sentinel products has nothing to do with which company owns the product. Rather, it’s the availability of longer-lasting parasiticides.

Dr. Matt Nelson, a veterinarian in Illinois, used to stock Sentinel and recommended it almost exclusively. No more.

“I will wait and see what Virbac does with it but it will be a difficult sell with the introduction of Bravecto,” Nelson said by email, referring to a new chew product for dogs that protects against fleas and ticks for up to 12 weeks — three times as long as Sentinel.

For heartworm protection, Nelson said his clinic uses ProHeart 6, an injectable drug given every six months.

“The monthly pill is on its way out,” Nelson predicted.

He added that Novartis’s production issues and further missteps in bringing the product back to market probably hastened the process for Sentinel. “Novartis really messed up in the eyes of many veterinarians, if you ask me, and their reintroduction of Sentinel, albeit at a lower cost, was mishandled,” he said, explaining that practitioners weren’t given specific dates for when the company would resume production and have the drug available.

“I’m sure it has hurt their Sentinel sales,” Nelson said.

According to the Virbac press release, sales of Sentinel Flavor Tabs and Sentinel Spectrum are expected to reap total revenues of $90 million to $100 million in 2014. The company did not say what it would pay for the products and associated assets.

A company spokesman declined to answer questions about marketing plans, product pricing or whether Virbac will make an effort to prevent gray-market sales, pending approval of the acquisition.

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