Cialis Case Analysis

Case Analysis - Cialis

Background

Erectile dysfunction (ED) is the failure to achieve and maintain an erection sufficient for satisfactory sexual experience. It affects 150 million men globally. In March 1998, Viagra (active ingredient is sildenafil citrate) was the first oral medication approved for use in erectile dysfunction. Viagra had a very successful launch with a total of 600,000 prescriptions filled in the first month (April 1998), and instantly became a phenomenon for ED patients. Unfortunately, after six months Viagra suffered a huge setback when the FDA received reports of 130 deaths of patients taking Viagra; over half the incidents were cardiovascular related. Viagra sales declined swiftly; however, Pfizer without delay took a proactive stance to decrease the fears of safety for their new drug. They immediately conducted follow up studies on patients with cardiovascular disease and erectile dysfunction and communicated their findings to key decision makers and experts in the medical field. The company then initiated a $53 million advertising blitz, and deployed their sales force to make almost 700,000 doctor visits to push the medication throughout 1999. Due to these aggressive marketing tactics the company turned around the downward spiral as sales that year topped $1 billion. Viagra became the market leader and only company garnering a 90% market share for ED.

A company ICOS, a small biotech start-up wanted to get into the industry and eventually wanted to become a self-sufficient biotech company and acquire its own clinical development and marketing capabilities. ICOS was competent in R&D, but, not in marketing and bringing a drug to market through the FDA. In 1998, they strategically partnered with Eli Lilly and Company, the pharmaceutical giant who believed in forging successful partnerships with other firms. Thus, making Eli Lilly the ideal pharmaceutical company to partner with ICOS on this joint venture.

Decision...