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Matt Witte\'s CBI Presentation on Building "Hybrid" CSO Sales Forces

Matthew Witte
Matthew Witte

The document discusses two case studies of pharmaceutical companies that used "hybrid" contract sales organization (CSO) models for start-up operations. The first case study describes Ligand Pharmaceuticals' use of a hybrid model with Innovex, pairing Ligand field managers with CSO representatives. This allowed Ligand to scale its sales force cost-effectively. The second case study examines Somaxon Pharmaceuticals' partnership with Publicis Touchpoint, which enabled Somaxon to quickly deploy and later expand its sales force. Both cases demonstrated the ability of a hybrid model to provide scalable and flexible sales operations for start-ups.

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Creating Hybrid CSO Models for Start-Up Operations 2 Case Studies Forum on Contract Sales Strategies for Bio/Pharmaceutical Companies Flexible Sales and Promotional Models for Enhanced Business Profitability June 21, 2011 prepared DesignPharma Pharmaceutical Sales Operations & Analytics Consultants Witte by Matthew Witte 損 MatthewMatthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Creating Hybrid CSO Models for Start-Up Operations - Presentation overview 損 Hybrid Model Definition 損 My Experience with Hybrid Models 損 Why Pair Company Field Managers with CSO representatives? 損 Case Study One Ligand Pharmaceuticals 損 Case Study Two Somaxon Pharmaceuticals 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Hybrid Contract Sales Model Definition A sales force build where the front line sales management are employed by the pharmaceutical company and the sales representatives are CSO employees. Note: In this model, the back office CSO support services can either be completely CSO managed or priced ala carte. 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
My Sales Teams Construction Bio 損 Somaxon Pharmaceuticals Designed & staffed CNS hybrid CSO sales force 損 Ligand Pharmaceuticals Designed & staffed Pain hybrid CSO sales force 損 Roche Pharmaceuticals (Midwest Region) Built 3X3 mirrored primary care sales forces Initial build was designed as a hybrid CSO sales force model Multiple specialty team builds as Roche employees 損 Novo Nordisk Pharmaceuticals Multiple specialty divisions from 1983-2004, all company employees 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Outsourcing Trends 損 analysts see several trends continuing... with a move to reduce additional fixed costs through outsourcing. The Pharma Agenda: Hard Days Ahead, MedAdNews, January 2010 損 Companies are now looking to take sales force outsourcing to the next step. The New Sales Force, Pharmaceutical Executive, March 2009 損 The first movers have changed their selling model and the traditional selling and promotion model is being redesigned. Tearing Up the Rule Book, Pharmaceutical Executive, February 2010 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Trend Toward Outsourced Sales - Fewer Company Reps, More Contract Specialty Reps Total Number of Total Number of Outsourced Field Representatives Field Reps Increasing Decreasing 12,000 100% 10,000 Increase 110,000 8,000 12,000 (16% of total) Total 6,000 ~75,000 Reps 6,000 Total 4,000 (5% of total) Reps 2,000 - 2004-2005 2015 Proj 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Strategic Outsourcing - Why the Change to CSO Managed representatives? 損 Efficiency Companies can focus on core competencies Outsource the rest 損 Flexibility Quickly ramp up and/or down as the market demands Adjust the sales mix as needed 損 Risk Mitigation Uncertainty, in todays world, is the norm Strategic outsourcing helps mitigate risk 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Strategic Outsourcing - Why Pair Company Managers with CSO representatives? 損 Commitment to corporate results Company managers are tied tighter to corporate goals & objectives Typically incented with stock options 損 Management talent Salaried at industry standards increases recruitment pool More experienced, tenured specialty managers available 損 Recruiting, screening and hiring Committed, enthusiastic managers pull in better sales candidates 損 Strategic Management Focused on strategic & tactical issues, not sales bureaucracy Sales management without the mess 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Case Study One Ligand Pharmaceuticals Inc. 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Ligand Pharmaceuticals Inc. - Company Overview 損 San Diego based, drug development company whose current business model is specializing in royalty revenue generating assets 損 Commercially marketed specialty pharmaceuticals from 1999 to 2007 損 Ligand pre-commercial chronology: 1987 - Progenx is formed 1989 The company name is changed to Ligand Pharmaceuticals 1992 The company goes public 1995 Glycomed is acquired 1998 Seragen is acquired Situation: Classic biotech R&D focused start-up without any commercial infrastructure 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Ligand Pharmaceuticals Inc. - Commercial History 1999 - 2 products are FDA approved in the same week (Panretin gel and ONTAK) 2000 - Commercial sales ramp up 2001 - Targretin caps and gel are FDA approved and launched 2002 - Avinza is acquired from Elan 2002 - Avinza is FDA approved and launched 2003 - Organon begins co-promoting Avinza 2006 - Eisai acquires oncology products & personnel for $205MM 2007 King acquires pain product & personnel for $313MM 2007-date Ligand continues as a royalty revenue company 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Ligand Pharmaceuticals - Multiple Roads to Commercial Products 損 Acquires ligand retiniod R&D projects from Allergan in 1997 Targretin caps and gel Panretin gel 損 Acquires the company Seragen and assumes Interleukin 2-based targeted combination oncology projects ONTAK 損 Acquires late stage product IND and marketing rights from Elan in 2002 Avinza 損 Ligand achieves FDA approval for all 5 products in 4 years 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Ligand Pharmaceuticals Inc. - Product Portfolio 損 ONTAK (denileukin diftitox) Targeted oncologic, combination of IL 2 and diphtheria toxin Indicated for a rare indolent lymphoma - CTCL Deep frozen product Administered IV, similar to chemotherapy Price approx. $20K per cycle (2006) 損 Targretin caps and gel (bexarotene) Retinoid, selectively targeting only X retinoid receptors Indicated also for CTCL Cost >$1K/month, depending on dosage formulation (2006) 損 Avinza (morphine sulfate extended release capsules) CII Once-a-day formulation Flat PK profile 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Ligand Pharmaceuticals - Hybrid CSO model 損 CSO provider Innovex 損 Ligands CSO goal add scalable sales strength at the lowest possible cost per representative using existing internal sales support 損 Contract details 2001 initiated a CSO agreement for 20 full time dermatology contract sales representatives (managed by 4 existing Ligand oncology RSMs) 2002 redirected these 20 reps to support the launch on Avinza 2002 expanded the pain sales team to 50 reps, adding 30 additional full time CSO reps (managed by 5 Ligand Pain RSMs and a National Sales Director) 2004 expanded the pain sales team to approx.100, by adding an additional 50 CSO reps (expanding the Ligand RSMs to 10) 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Ligand Pharmaceuticals - Hybrid CSO model 損 Innovex provided a National Field Director and Regional Field Coordinator allocated 50% to the Ligand contract 損 Ligand RSMs were relieved of all traditional HR responsibilities due to co-employment rules 損 All CSO back office services were ala carte (and virtually unused) 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Ligand Product Sales $160 $140 $120 Product Sales ($M) Ligand expands to 106 Specialty reps Avinza launches with $100 70 hybrid CSO Specialty reps $80 Oncology Eisai 40 reps Deal Oncology 20 hybrid CSO Organon $60 Co-promotion 20 reps reps hired to 700 reps King launch T gel in Deal dermatology $40 $20 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year Avinza Ontak Targretin Caps T gel and Panretin
Ligand Sales $225 3 $200 Targretin 20 gel Product Sales ($M) $175 4 32 19 $150 Targretin 31 caps $125 4 15 $100 32 Ontak $75 150 4 3 113 $50 7 12 12 3 15 24 70 Avinza $25 2 7 27 24 13 12 17 8 $0 1999 2000 2001 2002 2003 2004 2005 2006 Year
Ligand Pharmaceuticals - Hybrid CSO Model Conclusions 損 Goal: Scalable sales force Ability to shift deployment from Dermatology/Oncology to Pain, when needed Low cost per representative Use existing internal sales support Strong control of control, training, messaging, field activity, commitment through company employed RSMs 損 Results: Sales force grew easily from 20 original reps and no additional RSMs to 106 reps in 10 regions 20 Derm reps formed the core of the initial 50 rep Pain sales team Cost per rep was minimized by using Ligands fledging sales support infrastructure Pain reps successfully launched Avinza into stiff competition, w/o a co-promotion partner, due in part to excellent field sales management 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Case Study Two Somaxon Pharmaceuticals Inc. 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Somaxon Pharmaceuticals Inc. - Company Overview 損 San Diego based, commercially-focused company 損 Formed in 2003, acquiring the marketing rights to low-dose doxepine (trade name Silenor) for sleep disorders 損 Successfully executed an IPO in 2005 損 Initial planned launch in 2008 abandoned after a FDA approvable letter Internal CommOps employees were released Plans to launch a 300+ sales force scrapped 損 Final FDA division appeal resulted in Silenor approval in March 2010 Internal staff down to 5 Executive Officers 損 Silenor commercially launched in September 2010 Situation: Specialty pharmaceutical start-up based on a re-purposed molecule and without any commercial infrastructure 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Somaxon Pharmaceuticals Inc. - Product Portfolio 損 Silenor (doxepine) Indicated for the treatment of insomnia characterized by difficulty with sleep maintenance Silenor is approved for the treatment of both transient (short term) and chronic (long term) insomnia in both adults and elderly patients Silenor demonstrated maintenance of sleep into the 7th and 8th hours of the night, with no meaningful evidence of next day residual effects in clinical trials Silenor is not designated as a controlled substance by the U.S. DEA because of its demonstrated lack of abuse potential Price approx. $1 per day, with copay assistance the price to the consumer can be as low as $0.50 Available as 3mg and 6mg dosage forms 損 Sales Challenge Doxepin, originally launched as Sinequan by Pfizer in 1969, available as10mg generic 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Analysts Perspective We think Silenor has the best chance to become what many have tried and failed to achieve the ideal insomnia drug. According to the FDA- approved label, Silenor carries no liability for dependence, addiction, tolerance, withdrawal, rebound, or next day residual effects yet still provides ideal efficacy for 8 hours. It is not DEA scheduled and works within the body's natural sleep-wake cycle; therefore it has a shot to finally shake the "sleeping pill" stigma. Jeffries & Company, Inc.; April, 2010 Silenor carries what we find to be one of the most compelling labels among its competitors and will be the first insomnia drug to offer both real efficacy and a lack of DEA scheduling. Jeffries & Company, Inc.; April, 2010 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Somaxon Pharmaceuticals Inc. - Hybrid CSO model 損 CSO provider Publicis Touchpoint 損 Somaxons CSO goal scalable sales force at premium per rep to build a medium-sized, fully supported specialty sales team 損 Contract details March 2010 FDA approves Silenor April 2010 Somaxon raises approx. $100MM to begin commercial scale-up May 2010 Hybrid CSO sales force model designed July 2010 10 Somaxon RSMs are hired, marketing team deployed August 2010 110 Publicis reps are hired August 2010 P&G co-promotion with 105 reps announced September 2010 - Silenor launched after 300+ national launch meeting March 2012 35 Publicis reps and 3 Somaxon RSMs added 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Somaxon Pharmaceuticals - Hybrid CSO model 損 Publicis initially provided a National Field Director and Regional Field Coordinator (RFC), allocated 100% to the Somaxon contract 損 For the expansion, 2 additional RFCs were added 損 Somaxon RSMs were relieved of all traditional HR responsibilities due to co-employment rules 損 All CSO back office services were purchased 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Somaxon Pharmaceuticals - Hybrid CSO Model Conclusions 損 Goal: Scalable sales force, quick deployment Ability to shift deploy 110 initially and then build to approx. 250, when needed Premium cost per representative, competitive specialty base salaries Use full CSO back office sales support Strong control of control of sales training, messaging, field activity, rep commitment through company employed RSMs 損 Results: Sales force grew easily from 110 original reps and 10 RSMs to 145 reps in 13 regions Premium cost per rep was justifiable considering no internal sales support infrastructure was required Sales reps average 6 years of specialty sales experience (90% CNS & 60% sleep) Publicis Touchpoint reps successfully launched Silenor in less than 4 months, also due in part to excellence field sales management 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
American Psychiatric Association Meeting Silenor 20X20 Booth Honolulu, Hawaii May 2011 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
Matt Witte\'s CBI Presentation on Building "Hybrid" CSO Sales Forces

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Matt Witte\'s CBI Presentation on Building "Hybrid" CSO Sales Forces

  • 1. Creating Hybrid CSO Models for Start-Up Operations 2 Case Studies Forum on Contract Sales Strategies for Bio/Pharmaceutical Companies Flexible Sales and Promotional Models for Enhanced Business Profitability June 21, 2011 prepared DesignPharma Pharmaceutical Sales Operations & Analytics Consultants Witte by Matthew Witte 損 MatthewMatthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 2. Creating Hybrid CSO Models for Start-Up Operations - Presentation overview 損 Hybrid Model Definition 損 My Experience with Hybrid Models 損 Why Pair Company Field Managers with CSO representatives? 損 Case Study One Ligand Pharmaceuticals 損 Case Study Two Somaxon Pharmaceuticals 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 3. Hybrid Contract Sales Model Definition A sales force build where the front line sales management are employed by the pharmaceutical company and the sales representatives are CSO employees. Note: In this model, the back office CSO support services can either be completely CSO managed or priced ala carte. 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 4. My Sales Teams Construction Bio 損 Somaxon Pharmaceuticals Designed & staffed CNS hybrid CSO sales force 損 Ligand Pharmaceuticals Designed & staffed Pain hybrid CSO sales force 損 Roche Pharmaceuticals (Midwest Region) Built 3X3 mirrored primary care sales forces Initial build was designed as a hybrid CSO sales force model Multiple specialty team builds as Roche employees 損 Novo Nordisk Pharmaceuticals Multiple specialty divisions from 1983-2004, all company employees 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 5. Outsourcing Trends 損 analysts see several trends continuing... with a move to reduce additional fixed costs through outsourcing. The Pharma Agenda: Hard Days Ahead, MedAdNews, January 2010 損 Companies are now looking to take sales force outsourcing to the next step. The New Sales Force, Pharmaceutical Executive, March 2009 損 The first movers have changed their selling model and the traditional selling and promotion model is being redesigned. Tearing Up the Rule Book, Pharmaceutical Executive, February 2010 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 6. Trend Toward Outsourced Sales - Fewer Company Reps, More Contract Specialty Reps Total Number of Total Number of Outsourced Field Representatives Field Reps Increasing Decreasing 12,000 100% 10,000 Increase 110,000 8,000 12,000 (16% of total) Total 6,000 ~75,000 Reps 6,000 Total 4,000 (5% of total) Reps 2,000 - 2004-2005 2015 Proj 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 7. Strategic Outsourcing - Why the Change to CSO Managed representatives? 損 Efficiency Companies can focus on core competencies Outsource the rest 損 Flexibility Quickly ramp up and/or down as the market demands Adjust the sales mix as needed 損 Risk Mitigation Uncertainty, in todays world, is the norm Strategic outsourcing helps mitigate risk 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 8. Strategic Outsourcing - Why Pair Company Managers with CSO representatives? 損 Commitment to corporate results Company managers are tied tighter to corporate goals & objectives Typically incented with stock options 損 Management talent Salaried at industry standards increases recruitment pool More experienced, tenured specialty managers available 損 Recruiting, screening and hiring Committed, enthusiastic managers pull in better sales candidates 損 Strategic Management Focused on strategic & tactical issues, not sales bureaucracy Sales management without the mess 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 9. Case Study One Ligand Pharmaceuticals Inc. 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 10. Ligand Pharmaceuticals Inc. - Company Overview 損 San Diego based, drug development company whose current business model is specializing in royalty revenue generating assets 損 Commercially marketed specialty pharmaceuticals from 1999 to 2007 損 Ligand pre-commercial chronology: 1987 - Progenx is formed 1989 The company name is changed to Ligand Pharmaceuticals 1992 The company goes public 1995 Glycomed is acquired 1998 Seragen is acquired Situation: Classic biotech R&D focused start-up without any commercial infrastructure 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 11. Ligand Pharmaceuticals Inc. - Commercial History 1999 - 2 products are FDA approved in the same week (Panretin gel and ONTAK) 2000 - Commercial sales ramp up 2001 - Targretin caps and gel are FDA approved and launched 2002 - Avinza is acquired from Elan 2002 - Avinza is FDA approved and launched 2003 - Organon begins co-promoting Avinza 2006 - Eisai acquires oncology products & personnel for $205MM 2007 King acquires pain product & personnel for $313MM 2007-date Ligand continues as a royalty revenue company 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 12. Ligand Pharmaceuticals - Multiple Roads to Commercial Products 損 Acquires ligand retiniod R&D projects from Allergan in 1997 Targretin caps and gel Panretin gel 損 Acquires the company Seragen and assumes Interleukin 2-based targeted combination oncology projects ONTAK 損 Acquires late stage product IND and marketing rights from Elan in 2002 Avinza 損 Ligand achieves FDA approval for all 5 products in 4 years 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 13. Ligand Pharmaceuticals Inc. - Product Portfolio 損 ONTAK (denileukin diftitox) Targeted oncologic, combination of IL 2 and diphtheria toxin Indicated for a rare indolent lymphoma - CTCL Deep frozen product Administered IV, similar to chemotherapy Price approx. $20K per cycle (2006) 損 Targretin caps and gel (bexarotene) Retinoid, selectively targeting only X retinoid receptors Indicated also for CTCL Cost >$1K/month, depending on dosage formulation (2006) 損 Avinza (morphine sulfate extended release capsules) CII Once-a-day formulation Flat PK profile 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 14. Ligand Pharmaceuticals - Hybrid CSO model 損 CSO provider Innovex 損 Ligands CSO goal add scalable sales strength at the lowest possible cost per representative using existing internal sales support 損 Contract details 2001 initiated a CSO agreement for 20 full time dermatology contract sales representatives (managed by 4 existing Ligand oncology RSMs) 2002 redirected these 20 reps to support the launch on Avinza 2002 expanded the pain sales team to 50 reps, adding 30 additional full time CSO reps (managed by 5 Ligand Pain RSMs and a National Sales Director) 2004 expanded the pain sales team to approx.100, by adding an additional 50 CSO reps (expanding the Ligand RSMs to 10) 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 15. Ligand Pharmaceuticals - Hybrid CSO model 損 Innovex provided a National Field Director and Regional Field Coordinator allocated 50% to the Ligand contract 損 Ligand RSMs were relieved of all traditional HR responsibilities due to co-employment rules 損 All CSO back office services were ala carte (and virtually unused) 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 16. Ligand Product Sales $160 $140 $120 Product Sales ($M) Ligand expands to 106 Specialty reps Avinza launches with $100 70 hybrid CSO Specialty reps $80 Oncology Eisai 40 reps Deal Oncology 20 hybrid CSO Organon $60 Co-promotion 20 reps reps hired to 700 reps King launch T gel in Deal dermatology $40 $20 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 Year Avinza Ontak Targretin Caps T gel and Panretin
  • 17. Ligand Sales $225 3 $200 Targretin 20 gel Product Sales ($M) $175 4 32 19 $150 Targretin 31 caps $125 4 15 $100 32 Ontak $75 150 4 3 113 $50 7 12 12 3 15 24 70 Avinza $25 2 7 27 24 13 12 17 8 $0 1999 2000 2001 2002 2003 2004 2005 2006 Year
  • 18. Ligand Pharmaceuticals - Hybrid CSO Model Conclusions 損 Goal: Scalable sales force Ability to shift deployment from Dermatology/Oncology to Pain, when needed Low cost per representative Use existing internal sales support Strong control of control, training, messaging, field activity, commitment through company employed RSMs 損 Results: Sales force grew easily from 20 original reps and no additional RSMs to 106 reps in 10 regions 20 Derm reps formed the core of the initial 50 rep Pain sales team Cost per rep was minimized by using Ligands fledging sales support infrastructure Pain reps successfully launched Avinza into stiff competition, w/o a co-promotion partner, due in part to excellent field sales management 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 19. Case Study Two Somaxon Pharmaceuticals Inc. 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 20. Somaxon Pharmaceuticals Inc. - Company Overview 損 San Diego based, commercially-focused company 損 Formed in 2003, acquiring the marketing rights to low-dose doxepine (trade name Silenor) for sleep disorders 損 Successfully executed an IPO in 2005 損 Initial planned launch in 2008 abandoned after a FDA approvable letter Internal CommOps employees were released Plans to launch a 300+ sales force scrapped 損 Final FDA division appeal resulted in Silenor approval in March 2010 Internal staff down to 5 Executive Officers 損 Silenor commercially launched in September 2010 Situation: Specialty pharmaceutical start-up based on a re-purposed molecule and without any commercial infrastructure 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 21. Somaxon Pharmaceuticals Inc. - Product Portfolio 損 Silenor (doxepine) Indicated for the treatment of insomnia characterized by difficulty with sleep maintenance Silenor is approved for the treatment of both transient (short term) and chronic (long term) insomnia in both adults and elderly patients Silenor demonstrated maintenance of sleep into the 7th and 8th hours of the night, with no meaningful evidence of next day residual effects in clinical trials Silenor is not designated as a controlled substance by the U.S. DEA because of its demonstrated lack of abuse potential Price approx. $1 per day, with copay assistance the price to the consumer can be as low as $0.50 Available as 3mg and 6mg dosage forms 損 Sales Challenge Doxepin, originally launched as Sinequan by Pfizer in 1969, available as10mg generic 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 22. Analysts Perspective We think Silenor has the best chance to become what many have tried and failed to achieve the ideal insomnia drug. According to the FDA- approved label, Silenor carries no liability for dependence, addiction, tolerance, withdrawal, rebound, or next day residual effects yet still provides ideal efficacy for 8 hours. It is not DEA scheduled and works within the body's natural sleep-wake cycle; therefore it has a shot to finally shake the "sleeping pill" stigma. Jeffries & Company, Inc.; April, 2010 Silenor carries what we find to be one of the most compelling labels among its competitors and will be the first insomnia drug to offer both real efficacy and a lack of DEA scheduling. Jeffries & Company, Inc.; April, 2010 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 23. Somaxon Pharmaceuticals Inc. - Hybrid CSO model 損 CSO provider Publicis Touchpoint 損 Somaxons CSO goal scalable sales force at premium per rep to build a medium-sized, fully supported specialty sales team 損 Contract details March 2010 FDA approves Silenor April 2010 Somaxon raises approx. $100MM to begin commercial scale-up May 2010 Hybrid CSO sales force model designed July 2010 10 Somaxon RSMs are hired, marketing team deployed August 2010 110 Publicis reps are hired August 2010 P&G co-promotion with 105 reps announced September 2010 - Silenor launched after 300+ national launch meeting March 2012 35 Publicis reps and 3 Somaxon RSMs added 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 24. Somaxon Pharmaceuticals - Hybrid CSO model 損 Publicis initially provided a National Field Director and Regional Field Coordinator (RFC), allocated 100% to the Somaxon contract 損 For the expansion, 2 additional RFCs were added 損 Somaxon RSMs were relieved of all traditional HR responsibilities due to co-employment rules 損 All CSO back office services were purchased 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 25. Somaxon Pharmaceuticals - Hybrid CSO Model Conclusions 損 Goal: Scalable sales force, quick deployment Ability to shift deploy 110 initially and then build to approx. 250, when needed Premium cost per representative, competitive specialty base salaries Use full CSO back office sales support Strong control of control of sales training, messaging, field activity, rep commitment through company employed RSMs 損 Results: Sales force grew easily from 110 original reps and 10 RSMs to 145 reps in 13 regions Premium cost per rep was justifiable considering no internal sales support infrastructure was required Sales reps average 6 years of specialty sales experience (90% CNS & 60% sleep) Publicis Touchpoint reps successfully launched Silenor in less than 4 months, also due in part to excellence field sales management 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants
  • 26. American Psychiatric Association Meeting Silenor 20X20 Booth Honolulu, Hawaii May 2011 損 Matthew Witte DesignPharma Pharmaceutical Sales Operations & Analytics Consultants