Sarafem Speculative Buying Complicates Inventory Forecasts, Warner Chilcott Says
This article was originally published in The Pink Sheet Daily
Executive Summary
Sarafem speculative buying by wholesalers makes inventory predictions difficult, Warner Chilcott said during its earnings call Aug. 10
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Sarafem speculative buying by wholesalers makes inventory predictions difficult, Warner Chilcott said during its earnings call Aug. 10. "We really don't know what inventory levels are," CEO Roger Boissonneault said. "There are such things as a pipeline report, but the pipeline report doesn't give you the status of real speculators because they don't report in the pipeline." "Known forward buyers are very difficult to figure out," he added. "Sometimes it'll surprise you." While revenues were up 13%, Warner Chilcott reported a nearly 70% sales decline of Sarafem (fluoxetine). Sarafem, the repackaged formulation of Prozac , had sales of $6.7 mil., which the company blamed on inventory destocking. However, Boissonneault tried to assure analysts that the destocking was complete. "I guess I can guarantee you we probably won't see this six million dollar number again. We believe we've emptied out most of the inventory with this number and anticipate sales would improve in the next quarter," he said. "Do we anticipate another 6 million dollars? No. Will it come back to 15 million? That's kind of hard to say. That depends on how it empties out." Generic versions of Sarafem have been available since 2001; however, Warner Chilcott said that generic erosion did not contribute to the decline during the quarter. Generic substitution is running at about 20%, approximately the same level since generics versions were launched, Boissonneault said. - Lee Kalowski |