NEW YORK: In a move likely to have major implications within the cut-throat healthcare sector, Hoffmann-La Roche has put its Xenical business - rumored to be worth millions - up for grabs.
NEW YORK: In a move likely to have major implications within the
cut-throat healthcare sector, Hoffmann-La Roche has put its Xenical
business - rumored to be worth millions - up for grabs.
Xenical, an anti-obesity drug that has been hyped mercilessly via a
dollars 70 million ad campaign, had previously been handled by
healthcare specialists Stratis KPR. Ogilvy, Edelman and Manning, Selvage
& Lee have been put on the shortlist for the account, and will present
final proposals this week.
An interesting sidebar to the story is the fate of Stratis. With fee
income of dollars 6.3 million in 1998, the firm might have difficulty
weathering the loss of a prestigious multimillion-dollar account.
Stratis CEO Bob Muratore scoffed at rumors that the loss of the Xenical
business would sink the agency. ’The loss of the Roche account was
unfortunate,’ he said. ’But business will go on.’
While Muratore admitted that some of the firm’s employees who had been
working on Xenical were downsized, he claimed the layoffs were tempered
in part by as-yet-unannounced wins secured late in the year. As a
result, several employees slated to be laid off were immediately
A second - and simultaneous - blow to Stratis was the departure of
GM/EVP Helene Paseornek to Edelman. While the timing seems incredibly
coincidental, an Edelman spokesperson denied any link between Paseornek
joining the firm and the Xenical business becoming available.
Of the three agencies pitching for Xenical, only Ogilvy does not
currently work with Roche. Edelman handles Tamiflu (an influenza
therapy), Rocephin (for ear infections) and Lariam (an anti-malarial
treatment), while MS&L currently holds Roche’s HIV portfolio, an
osteoporosis treatment and a Hepatitis-C therapy.
Though securing the Xenical business (and thus a relationship with
Roche) would seem a major coup for Ogilvy’s healthcare practice, the
agency doesn’t seem daunted by the fact that its competitors have worked
extensively with Roche. ’Every relationship has to start somewhere,’
said Kym White, managing director of the firm’s health and medical
practice. ’Being the new kid on the block can be a good thing.’
While sales of Xenical have been stellar - more than 96,000
prescriptions during its first four weeks on the US market - there are
some hurdles to overcome, not the least of which is Xenical’s
embarrassing side effects (flatulence with discharge, among others).
Terry Hurley, Roche’s director of public affairs for Xenical, confirmed
the agency change but declined to comment on it. He attempted, however,
to sell his colleagues in PR on Xenical’s benefits: ’It’s my experience
that PR people don’t get enough exercise or eat properly.’