Sanofi-Aventis to Pay US$1.9Bn for Chattem

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20 January 2010

COMPANY NEWS 2 GlaxoSmithKline strikes 2 Sanofi-Aventis to pay cold-sore deal in the US Thornton &Ross snaps up 3 Metanium US$1.9bn for Chattem Ransom faces an uncertain future 4 Novartis set to take control 5 of Alcon anofi-Aventis is set to enter the US OTC times Chattem’s sales in 2009 and 13.3-times Celesio considers future 6 Smarket by acquiring Chattem for approx- its earnings before interest, tax, depreciation of its retailing operation imately US$1.9 billion (C1.3 billion). and amortisation (EBITDA). Pharmacy Chain 36.6 8 Chris Viehbacher,chief executive officer of In the year ended 30 November 2008, Chat- raises RUB2.3 billion Sanofi-Aventis, described Chattem as the “ideal tem’s sales increased by 7% to US$455 mil- Kraft sweetens Cadbury offer 9 platform in the US consumer healthcare mar- lion. Around 93% of its turnover was gener- ket, which represents 25% of the current world- ated in the US through brands such as ACT, GENERAL NEWS 10 wide opportunity”. Cortizone-10, Gold Bond, Icy Hot, Selsun Blue Chattem would provide a strong vehicle for and Unisom. New Zealand agrees to 10 switching some of Sanofi-Aventis’ medicines Chattem will become the US consumer switch oral famciclovir from prescription to OTC status in the US, said healthcare division of Sanofi-Aventis. It will Germany plans to restrict 11 Viehbacher,adding that the company was seek- continue to be led by the current management, pack sizes for analgesics ing to switch the allergy medicine Allegra (fexo- and its headquarters will remain in Chatta- Germany completes 13 fenadine hydrochloride). nooga, Tennessee. pantoprazole switch According to Sanofi-Aventis, the acquisition The French pharmaceutical firm’s OTC busi- MARKETING NEWS 14 would make it the world’s fifth-largest consum- ness, which is expected to record sales of C1.4 er healthcare company with sales of approxi- billion in 2009, does not have a direct presence Austria gives OTC status 14 mately C1.7 billion. Sanofi-Aventis is current- in the US. Its main markets include Australia, to emergency contraception ly ranked number six. Brazil, France, Italy,Mexico and Russia. DEcarb grows Goldshield’s 15 Sanofi-Aventis said the price represented 4.8- ■ Continued on page 22 weight-loss portfolio in UK German court controls 18 use of the suffix ‘akut’ FEATURES 20 Europe scrutinises topical ketoprofen Sanofi-Aventis reshapes 20 oncerns over serious photosensitivity reac- scription status in a number of European coun- its OTC business Ctions have prompted Europe’s Committee tries including Austria, Belgium, Denmark, for Medicinal Products for Human Use (CHMP) Germany, Spain, Sweden and the UK. REGULARS to start a safety review of topical medicines con- The CHMP’s safety review was triggered taining ketoprofen. by France under Article 107 of European Dir- Consumer viewpoint 12 The CHMP said it would assess the bene- ective 2001/83/EC as amended. – Mouth ulcers is this month’s topic fit-risk balance of these medicines, and rec- The French medicines agency, AFSSAPS, Pharmacy viewpoint 16 ommend whether their marketing authorisa- has suspended the marketing authorisations of – Pharmacists rate NiQuitin and Benylin tions should be maintained, changed, suspend- all topical ketoprofen medicines in France with Events – Our regular listing 19 ed or revoked. effect from 12 January 2010. They have pre- People – Sanofi recruits Regenauer 22 Topical ketoprofen medicines have non-prescription-only status in France. OTC20-01-10p2-3FIN.qxd 15/1/10 12:44 Page 2

OTC COMPANY NEWS

Mergers & Acquisitions Licensing Agreements Teva takes on GlaxoSmithKline strikes Japan’s Taisho cold-sore deal in the US eva has acquired a majority stake in Japan- Tese generics player Taisho Pharmaceutical laxoSmithKline has struck a deal that will will develop,”added the company, noting that Industries through its local Teva-Towa Pharma Ggive it access to the “next advance in the NB-001 had demonstrated “potent antiviral act- joint venture. A definitive agreement saw Teva- treatment of cold sores” in the US and Canada. ivity in vitro” against strains that had shown Towa gain at least 66.7% of Taisho’s outstand- The company, which already markets the resistance to other antiviral agents including ing shares for an undisclosed fee. Abreva OTCcold-sore medicine in the US, has aciclovir and foscarnet. Taisho – which is separate from Japan’s reached an exclusive licensing agreement with The privately-owned biopharmaceutical com- leading OTC player of a similar name – has NanoBio Corporation for OTC use of NB-001. pany has completed two Phase 2 clinical trials annual sales of around ¥12 billion (C90 mil- GlaxoSmithKline said that the patented com- for NB-001 and plans to start Phase 3 testing lion) and employs almost 400 people. Accord- pound provided “significant antimicrobial act- in the near future. ing to Teva,it is Japan’s seventh-largest gener- ivity against the virus that causes cold sores”. According to NanoBio, NB-001 would “ra- ics manufacturer. Under the terms of the agreement, Glaxo- pidly capture market share from all prescrip- Privately-owned Taisho manufactures a port- SmithKline will make an upfront payment of tion and OTCcurrent therapies, as well as dra- folio of 120 generic molecules in more than 200 US$14.5 million (C10.1 million) to NanoBio. matically expand the market” by offering un- presentations which it markets to pharmacies, It has also agreed additional milestone pay- treated sufferers a viable treatment option. clinics, hospitals and wholesalers through a ments of up to US$40 million plus single-digit GlaxoSmithKline’s Abreva cream – based well-established salesforce. The Japanese firm royalties on future sales. on the active ingredient docosanol – is the only expanded its finished-dosage manufacturing Roger Scarlett-Smith, GlaxoSmithKline Con- non-prescription cold-sore medicine that is ap- facility in 2006, a year after it built a research sumer Healthcare’s North American president, proved by the US Food and Drug Administra- and development centre. said the deal built on the company’s leadership tion (FDA) to shorten healing time and the dura- Commenting on the transaction, Teva’s pres- position in the cold-sore category. “With Ab- tion of symptoms. The company pointed out ident and chief executive officer Shlomo Yanai reva,” he commented, “we have a very effec- that Abreva was the leading cold-sore treatment said it would “serve as a springboard for Teva- tive cold-sore treatment in the category and in the US with a market share of over 50%. Kowa’s operations in Japan”. “Taisho will bring look forward to building on that platform with NanoBio’s chief executive officer and found- invaluable local expertise and know-how to the new technology from NanoBio.” er James Baker,said GlaxoSmithKline’s “lead- support our growth plan in Japan,”he insisted. NanoBio pointed out that NB-001 physical- ership in developing and marketing consumer Teva created a joint venture with Japanese ly killed the virus on contact. “This rapid phys- healthcare products including the leading prod- pharmaceuticals company Kowa in September ical mode of action significantly reduces the uct for treating herpes labialis makes it the ideal 2008, with each party taking a 50% stake. Teva- likelihood that resistant herpes virus strains partner for NB-001”. Kowa was expected to achieve sales of US$1 OTC billion (C0.7 billion) by 2015 through lever- aging “the marketing, research and develop- Mergers & Acquisitions ment, manufacturing and distribution capabil- ities of each company to become a broad-based Nutrition 21 sells US retail business supplier of high-quality generic pharmaceutical products for the Japanese market”. utrition 21 has sold its retail and direct- nations of chromium compounds with other OTC N selling businesses to contract manufactur- dietary supplement ingredients. er Nature’s Products to help pay its debts. Nutrition 21 said in October of last year that IN BRIEF Nature’s Products is paying US$3.2 million it had signed a non-binding letter of intent to ( C 2.2 million) plus the assumption of designated sell its retail and direct-selling business to an ■ DERMA SCIENCES has signed a three- liabilities for the US-based businesses. The unnamed private company to help repay its year contract worth approximately US$15 mil- company has also agreed to buy ingredients debts, after the firm’s sales and profits were lion (C10 million) to supply an unnamed global from Nutrition 21. hit by the global economic downturn (OTC healthcare company with finger bandages. Nutrition 21 said it would use approximately bulletin,30 October 2009, page 10). US$2.7 million of the proceeds to repay in full The company was also delisted from the ■ ALLIANCE PHARMA – the UK-based the notes that it issued in August 2006. NASDAQ stock exchange after its share price company that markets the Forceval multimin- Commenting on the sale, Michael Zeher, dropped to below US$1.00. eral-multivitamin brand and Pavacol-D cough president and chief executive officer of Nutri- For the year ended 30 June 2009, Nutrition suppressant – said trading during the last few tion 21, said the deal allowed the company to 21 reported an operating loss of US$17.4 mil- months of 2009 had remained strong and as a focus its “limited financial resources” on its lion, after it cut the goodwill valuations of its result the company expected to report sales profitable ingredients business. It has also re- assets by US$17.5 million. Sales fell by 16% up by 42% to £31 million (C35 million) for the tained its patent portfolio, which includes more to US$39.6 million, as retail and mail order full year to the end of December. than 30 issued and pending patents associated sales declined in the second half of the year. OTC with chromium picolinate as well as combi- OTC

2 OTC bulletin 20 January 2010 OTC20-01-10p2-3FIN.qxd 15/1/10 12:44 Page 3

COMPANY NEWS OTC

ThorntonMergers & Acquisitions & Ross snaps up Metanium

hornton & Ross has acquired the Meta- utive officer,said Metanium would “further months later snapped up the Cerumol earwax Tnium nappy-rash brand for £2.0 million strengthen the company’s range of paediatric treatment from Laboratories for Applied Biol- (C2.2 million) from the troubled UK natural- medicines”, which includes the Hedrin head- ogy for an undisclosed sum (OTC bulletin, products specialist William Ransom & Son. lice treatment, Pripsen threadworm treatment 27 February 2009, page 3). In October,it ac- Thornton & Ross is also paying £0.2 million and Virasoothe product for relieving chicken- quired the privately-owned UK dermatology for Metanium inventory. pox symptoms. company Zeroderma (OTC bulletin,30 Octo- Comprising two licensed medicines – a cra- Metanium was a “long established brand in ber 2009, page 9). dle-cap cream and a nappy-rash ointment – the the UK”, Thornton & Ross pointed out, with a Commenting on the sale, Ivor Harrison, chief brand generated annual sales of approximate- “strong franchise in nappy-rash treatment”, cov- executive officer of Ransom, said the deal was ly £1.05 million and a gross profit of around ering both the OTC and prescription sectors. consistent with the company’s strategy of cre- £0.6 million, according to Ransom. As of 11 George told OTC bulletin that the company ating “a focused, natural consumer healthcare January,the net book value of the Metanium had high expectations for Metanium due to the offering” and was also in the best interests of assets was £1.1 million. brand’s efficacy and would be backing it with its shareholders. Dieno George, Thornton & Ross’ chief exec- “serious” promotional campaigns targeting both Ransom noted that £1.0 million of the pro- consumers and healthcare professionals. ceeds from the sale would be used to reduce the He added that under the Thornton & Ross company’s borrowing, while the balance would umbrella Metanium would also benefit from be used for working capital purposes. OTC bulletin the company’s “considerable strength and expe- The sale is part of Ransom’s turnaround plan rience in the manufacture of pharmaceutical launched in September 2008 that has seen the 20 January 2010 Number 335 quality cream and ointment products”. firm put various brands and its UK contract The deal includes the Metanium cradle-cap manufacturing operation up for sale (OTC bul- Editor & Publisher: Deborah Wilkes cream (1.5% salicylic acid) and Metanium oint- letin,29 September 2008, page 6). Associate Editors: Aidan Fry ment (20% titanium dioxide, 5% titanium per- Along with Metanium and Radian B, Ran- Mike Rice oxide, 3% titanium salicylate) – which are both som has also sold its Pavacol-D cough medi- Senior Assistant Editor: Matt Stewart general sale list medicines – as well as all intel- cines brand to Alliance Pharma for £0.6 million Assistant Editor: Jenna Lawrence lectual property,trade marks and stock relating (OTC bulletin,29 August 2008, page 3). Advertising Controller: Debi Minal to the brand. Despite making progress on the turnaround Marketing Manager: Val Davis An unlicensed baby moisturising cream, a plan, David Suddens, Ransom’s non-executive soft petroleum jelly and a zinc and castor oil chairman, recently said that the future of the Editorial, Subscription and Advertising enquiries should be addressed to: OTC bulletin, cream marketed by Ransom as Metanium prod- company remained uncertain as it continued OTC Publications Ltd, 54 Creynolds Lane, Solihull, ucts were not included in the deal and can no to implement its new strategy under “very test- West Midlands B90 4ER, UK. longer be marketed under the brand name. ing business and economic conditions” (see page Tel: +44 1564 777550. Fax: +44 1564 777524. Metanium is Thornton & Ross’ fourth acqui- 4 of this issue). E-mail: [email protected]. sition in a little over a year,and its second from His comments came after Ransom posted an Subscriptions Ransom. In December 2008, the company ac- operating loss of £2.7 million for the six months Annual subscriptions to OTC bulletin in Europe are £595.00 for single copies and £345.00 for additional copies to the same ad- quired Ransom’s Radian B topical pain reliever ended 30 September 2009. Sales declined by dress, including delivery. Subscriptions to addresses outside Eur- for a total consideration of £3.4 million (OTC 3% to £16.7 million, due mainly to the sale of ope are subject to an additional charge of £30.00 to cover postage. Subscription enquiries in Korea should be directed to Pharma bulletin,18 December 2008, page 3), and a few Radian B and Pavacol-D. Koreana Ltd, 14th Floor,KTB Network Building, 826-14 Yeoksam- OTC dong, Kangnam-gu, Seoul 135-080, Korea (Tel: +82 2 554 9591; Fax: +82 2 563 8289; E-mail: [email protected]). Advertising Business Opportunities Advertising rates and data are available on request from the address above or at www.otc-bulletin.com. About OTC bulletin Avery Dennison seeks adhesive partners OTC bulletin is published 20 times a year by OTC Publications Limited: twice monthly in February,March, April, May,June, Sep- tember,October and November; and monthly in December,Jan- very Dennison Specialty Tape is seeking range of very novel consumer product designs”. uary,July and August. A subscription to OTC bulletin includes A brand owners and private-label companies Avery Dennison said companies could be the weekly electronic newsflash, news@OTCbulletin,which is published around 45 times a year. OTC bulletin is printed by the worldwide to use its new proprietary adhesive supplied with rolls of a thin hydrocolloid lami- Warwick Printing Company Limited, Caswell Road, Leamington technology in OTCwound-care products. nate for subsequent slitting/cutting to singles; Spa CV31 1QD, UK. No part of this publication may be copied, reproduced, stored The company pointed out that the new ultra- converted product for packaging; or fully-pack- in a retrieval system or transmitted in any form without prior thin hydrocolloid adhesive delivered “real con- aged consumer products to go straight into re- permission from OTCPublications Ltd. sumer benefits in terms of better wear comfort, tail stores. ©OTC Publications Ltd. All rights reserved. Company registered in England No 2765878. Registered Office: flexibility,longer wear time, less skin soften- The company noted that a special hydrocol- 54 Creynolds Lane, Solihull, West Midlands B90 4ER, UK. ing beneath the dressing, and gentle removal”. loid formulation with a moisturising capability OTC bulletin® is registered as a trademark in the European Gert Van Der Haegen, Avery Dennison’s was available for treating dry and cracked skin Community. European marketing manager for medical, said as well as callouses and corns. ISSN 1350–1097 www.OTC-bulletin.com the adhesive offered the possibility to “create a OTC

20 January 2010 OTC bulletin 3 OTC20-01-10p4-5FIN.qxd 15/1/10 13:02 Page 2

OTC COMPANY NEWS

RansomFirst-Half Results faces an uncertain future

he future of William Ransom & Son re- Business First-half sales* Change Operating profit Change Tmains uncertain, according to David Sud- (£ millions) (%) (£ millions) (%) dens, the company’s non-executive chairman, as the troubled UK-based firm reported an op- Consumer Health 10.7 -16 -1.2 – erating loss of £2.7 million (C3.0 million) for Pharmaceuticals 4.4 +42 -0.2 – the six months ended 30 September 2009. Natural Products 1.7 +18 -0.03 – “Much has been achieved in very testing Others ––-1.3 – business and economic circumstances, but the Total 16.7 -3 -2.7 – outlook remains uncertain,”Suddens warned, noting that the management team was mak- * Excludes intragroup sales ing “strenuous efforts to return the business to Figure 1: Ransom’s sales and operating profit in the six months ended 30 September 2009 (Source – Ransom) financial stability”. The majority of the operating loss during of goods, renegotiating prices and by working the company pointed out, adding that all major the six-month period was attributed to Ransom with new and existing suppliers to reduce sup- retail multiples had received the range positive- writing down the goodwill valuation of its busi- ply chain costs. ly. Ransom claimed the umbrella brand would ness by £2.5 million. As part of Ransom’s turnaround plan intro- cover major product categories (OTC bulletin, Sales declined by 3% to £16.7 million, as duced in September 2008 (OTC bulletin,29 31 August 2009, page 12). the turnover at Ransom’s dominant Consumer September 2008, page 6), the Consumer Health New “consumer friendly and modern” pack- Health division dropped by 16% to £10.7 mil- division is focusing on four key areas: rebrand- aging formats would be introduced from April, lion (see Figure 1). ing and communication; upgrading packaging; Ransom revealed, while a number of recent The lower Consumer Health sales had been new product development; and distribution. product launches – including AloeDent with caused in part by the divestment of the Radian Upgrading of its core brands was “well ad- Fluoride and JointFlex – had boosted the Con- Band Pavacol D brands during 2008, Ransom vanced”, Ransom said, noting the relaunch of sumer Health business. Further launches were noted, which had wiped £1.2 million off the Manuka Gold and Health Perception. The lat- expected during the year. division’s turnover. On a like-for-like basis, ter has been renamed JointFlex from Ransom. On the distribution front, the firm’s sales sales had actually increased by 2%. Ransom’s remaining core brands – Aloe- team had achieved considerable success over As well as blaming Consumer Health’s op- Dent, AloePura and Allergenics; and the in- the six months, Ransom said, despite the chal- erating loss of £1.2 million on the goodwill licensed Medibee and Kordel’s – would be lenging conditions. The company warned, how- write-down, Ransom also cited lower margins, relaunched and on shelves from April 2010, ever,that there was still “some way to go” to due in part to product mix and an increase in the company noted. secure listings for the Ransom Naturals brand cost of goods. Ransom said that it was tack- A roll out of the new Ransom Naturals um- and to gain distribution with new customers. ling the margin erosion by reviewing the cost brella brand would begin in the spring of 2010, Meanwhile, Ransom said it was still planning to sell its Pharmaceuticals contract manufacturing division, despite the business hav- Business Strategy ing reported a 42% increase in sales to £4.4 million. This included, however, £1.3 million in BMS splits off from Mead Johnson sales of Radian B to Thornton & Ross, which acquired the brand in December 2008 (OTC ristol-Myers Squibb has successfully giv- lion through an initial public offering (IPO) in bulletin,18 December 2008, page 3). Thornton B en up its majority stake in Mead Johnson February 2009. & Ross is planning to take the production of Nutrition through a share-exchange offer,which Steve Golsby,Mead Johnson’s president and Radian B in-house. saw it regain its own shares. chief executive officer,said the result of the ex- A focus on increasing prices better to reflect Through the offer – launched in November change offer – which was heavily oversubscrib- raw-material costs, increasing labour efficien- of last year (OTC bulletin,30 November 2009, ed – reflected a strong belief in Mead John- cies and improving manufacturing standards, page 10) – Bristol-Myers Squibb off-loaded son’s business model, brands and strategies. narrowed the division’s operating loss from £0.9 its 170 million shares in Mead Johnson Nutri- Mead Johnson offers a portfolio of nutrition million to £0.2 million. tion, which represented an 83.1% stake in the products for infants and children. In the third Natural Products turnover rose by 18% to company. These now publicly-held shares carry quarter of 2009, the company reported sales £1.7 million. The division also edged towards a market value in excess of US$7.3 billion down by 6% to US$700 million, while earnings breaking even after reporting an operating loss ( C 5.0 billion), with Mead Johnson’s total mar- before interest and tax (EBIT) fell by 2.4% to of £30,000 for the six months, an improvement ket capitalisation now standing at more than US$160 million. on the £0.1 million operating loss reported in US$8.8 billion. Bristol-Myers Squibb sold its interest in the same period a year earlier. Bristol-Myers Squibb announced that it in- the global Mead Johnson adult-nutrition busi- In the long term, Ransom plans to integrate tended to give up its majority stake in Mead ness to Novartis in 2004 for US$385 million Natural Products’botanical extracts know-how Johnson less than a year after it sold-off a min- ( OTC bulletin,23 January 2004, page 3). into the Consumer Health division. ority 17% stake for approximately US$780 mil- OTC OTC

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COMPANY NEWS OTC

NovartisMergers & Acquisitions set to take control of Alcon

ovartis is set to acquire a majority stake “dynamic growth due to the increasing needs Selected Nin Alcon from Nestlé, and has proposed of an ageing population”. Alcon ophthalmic 74% a deal to take full control of the global eyecare Just under two years ago, Novartis agreed a pharmaceuticals specialist. two-stage transaction to acquire Nestlé’s maj- from Novartis 6% Nestlé’s 52% stake in Alcon will be added ority stake in Alcon (OTC bulletin,15 April to Novartis’ existing 25% holding – acquired 2008, page 4). The first stage in April 2008 saw from Nestlé two years ago – and the Swiss Novartis pay Nestlé US$10.4 billion for an ini- company will then launch an all-share offer for tial 25% slice of Alcon’s shares. The optional Ciba Vision the remaining Alcon shares. second stage gave Novartis the exclusive right business Once the takeover has been completed, Nov- to pay Nestlé US$181 per share, or US$28.1 from Novartis artis will create a new eyecare division called billion, for its remaining 52% stake in Alcon 20% Alcon, which will bring together the Alcon as- between January 2010 and July 2011. sets, Novartis’ Ciba Vision business, and some Novartis said the second stage – providing Figure 1: Breakdown of proforma 2008 sales at Novartis’ proposed Alcon eyecare division – US$8.5 of Novartis’ ophthalmic pharmaceutical prod- it with a 77% holding in Alcon – should be billion – by business (Source – Novartis) ucts (see Figure 1). completed in the second half of 2010. The com- Proforma 2008 sales for the division would pany will then launch an all-share offer to ac- by 8.3% to US$851 million in 2008, of which have been around US$8.5 billion (C5.9 billion), quire the remaining 23% stake held by minor- the majority came from contact-lens disinfec- pointed out Novartis, noting that the new Al- ity shareholders for around US$11.2 billion. tant products. The company offers a range of con division would have a presence in 70% of The total price tag for Alcon of US$49.7 bil- contact-lens disinfectants under the Opti-Free the global vision care market, including phar- lion represents almost 7.9-times the eyecare spe- brand, as well as artificial tears and products for maceuticals, surgical products, contact lenses cialist’s sales of US$6.3 billion in 2008 and dry eyes under the Systane brand. Other con- and OTC products. 22.6-times its operating profit of US$2.2 billion. sumer products include the ICaps portfolio of Daniel Vasella, chairman and chief executive Alcon’s business is dominated by its Surgical vitamin and mineral supplements. officer of Novartis, said that gaining full con- and Pharmaceuticals divisions, which generated International sales of US$3.5 billion ac- trol of Alcon would strategically strengthen the 87% of the company’s 2008 sales. The Con- countedfor just over half of Alcon’s sales in company’s healthcare portfolio and its position sumer division contributed the remaining 13%. 2008. The remaining US$2.8 billion was gen- in eyecare. He added that the eyecare sector had Alcon’s Consumer division reported sales up erated in the US company’s domestic market. OTC

Mergers & Acquisitions A&D Pharma boosts presence with CEE buys &D Pharma said it was set to become a branded OTC products, prescription generics businesses, meanwhile, market prescription A “major sales and marketing player” in cen- and food supplements as well as the Ozone and OTC medicines, food supplements and sel- tral and eastern Europe after striking a deal to brand (OTC bulletin,31 July 2009, page 1). ected medical devices. acquire several pharmaceutical firms across LaborMed did not acquire any of Ozone’s Under the terms of the deal, A&D Pharma five countries in the region for C 23.2 million. companies, which not only include the sub- is paying C 12.8 million for Arishop; C 6.0 mil- The company said it had agreed to acquire sidiaries A&D Pharma is set to buy but also lion for Ozone’s Polish subsidiary; and C 0.4 Bulgaria’s Arishop Pharma AD and its local sub- businesses in Romania and Bulgaria. million for Ozone’s businesses in the Czech sidiary,as well as the Romanian-based Ozone A&D Pharma said the acquisitions would Republic, Hungary and Slovakia, as well as Laboratories’ businesses in the Czech Repub- turn it into a “major sales and marketing play- Ozone’s Polish services company. lic, Hungary,Poland and Slovakia. er” in the central and eastern Europe pharma- A&D Pharma said it would pay another In October,A&D Pharma announced that ceutical market, with the ability to offer sup- C 4.0 million to acquire an unnamed company it was in negotiations to buy the firms (OTC pliers a full range of services from registra- located in one of the target markets. A spokes- bulletin,16 October 2009, page 4) tion to the commercialisation of OTC products, person for A&D Pharma said no further details A&D Pharma – the Dutch holding company prescription drugs and medical devices. on this acquisition were available. which runs the Sensiblu pharmacy chain and In addition, the acquisitions would add ap- The deals are expected to close at the end of Mediplus wholesaling businesses in Romania proximately 12% to the group’s turnover, A&D February 2010, subject to approval from a con- – noted that three of its major shareholders, Pharma noted. The company reported sales of sortium of five banks that granted A&D Pharma Walid Abboud, Roger Akoury and Ludovic C 502 million in 2008 (OTC bulletin,31 March a C 100 million refinancing loan in August 2009 Robert, held controlling stakes in the acquir- 2009, page 5). ( OTC bulletin,31 August 2009, page 13). ed companies. Arishop and its subsidiary exclusively dis- Meanwhile, A&D Pharma has launched a The Ozone businesses were excluded from tributes several prescription and OTC brands private healthcare service in Romania called a deal in July 2009 by Romanian firm Labor- in Bulgaria, including Reckitt Benckiser’s Nur- Anima Specialty Medical Services. Med Pharma Group for Ozone’s portfolio of ofen, Strepsils and Veet brands. The Ozone OTC

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OTC COMPANY NEWS

Business Strategy Celesio considers future of its retailing operations

Bausch & Lomb has unveiled a new corporate elesio is looking closely at the future of the company had over C100 million available – identity, which the US-based eyecare specialist said Cits pharmacy operations in Ireland, Italy and had placed “no limit” on raising more mon- reflected its “ongoing evolution”. and the Netherlands, according to chief exec- ey – but had no immediate targets in mind. Noting that both the new logo and icon (pictured above) retained the company’s traditional blue and utive officer Fritz Oesterle. Earlier this year,Celesio acquired Belgian green colours, Bausch & Lomb said that introducing Speaking at a press conference in Germany, wholesaler Laboratoria Flandria and a stake in the “+” symbol to the design represented its “strong Oesterle said the pan-European retailer and Brazilian wholesaler Panpharma (OTC bulletin, commitment to innovation and partnership with practitioners as a leader in eye health”. wholesaler was “evaluating whether to continue 31 July 2009, page 2). Gerald Ostrov, chairman and chief executive its pharmacy operations” in the three countries Strengthening its mail-order operations was officer of Bausch & Lomb, said the new identity where a few months ago it had cut goodwill an important focus for developing Celesio’s reflected the progress the company was making in growing its business for the “benefit of medical valuations by over C200 million for the sec- Patient and Consumer Solutions division in the practitioners, retail partners, consumers and patients ond time this year (OTC bulletin,16 October future, the spokesperson added. The company around the world”. 2009, page 1). currently operates the Dutch-based DocMorris The new identity will be phased in over the next 18-24 months as product packaging and other Generics tendering in all but name in the mail-order pharmacy, which serves customers materials are updated. Netherlands had reduced the earnings power of in Germany and the Netherlands, as well as the Looking forward, Ostrov said the company Dutch pharmacies, Celesio said in October, mail-order operations of Lloydspharmacy in expected 2010 to be a “banner year” harmonising the strong momentum built up in 2009 with product while reduced reimbursement prices and a re- the UK and its Vitusapotek chain in Norway. launches and marketing initiatives. duction in pharmacists’ remuneration had had Sales at Celesio’s Retail Pharmacies busi- OTC the same effect in Ireland. Government mea- ness fell by 4.1% to C2.36 billion over the first sures were also blamed in Italy for the “addi- nine months of 2009. In local currencies, sales Mergers & Acquisitions tional and unpredictable decline in margins”. increased by 5.5% (OTC bulletin,30 Novem- However, a spokesperson for Celesio told ber 2009, page 5). Alberto Culver OTC bulletin that the company remained com- The Mail-Order Pharmacies business posted mitted to the retail pharmacy market. Although turnover up by 14.9% – 15.1% in local cur- hundreds of pharmacies would not be added rency terms – to C187 million. gains Simple to its established chains, such as Lloydsphar- However, the C200 million goodwill write- macy in the UK, the spokesperson noted, stores downs on the Dutch, Irish and Italian retail busi- lberto Culver has acquired the Simple would be opened or acquired if they benefited ness, coupled with a C71 million goodwill write- A Health & Beauty skincare business in the the business. down on the DocMorris franchise business, left UK for £240 million (C 268 million) from the Celesio has ample funding available for ac- the Patient and Consumer Solutions division private-equity fund Duke Street. quisitions, as it tries to reduce its dependency – comprising Retail Pharmacies, Mail-Order Described by Alberto Culver as the second on strongly government-regulated markets. The Pharmacies and Other Business – with a loss largest skincare brand in the UK on a value chief financial officer Christian Holzherr said before interest and tax of C94.9 million. share basis, Simple is expected to report annual OTC sales of £65 million for 2009. Carol Lavin Bernick, Alberto Culver’s exec- Mergers & Acquisitions utive chairman, said the acquisition gave the company a “well-known and respected brand” Merz fills out with BioForm Medical in its largest foreign market. “It reaffirms our focus on beauty care and provides us with a erz Pharmaceuticals – owner of the Tete- performed in dermatology and plastic surgery terrific opportunity to execute our strategy of Msept cough and cold brand – is set to pay practices. Once the acquisition was complete, expanding and growing our skincare portfo- approximately US$253 million (C 176 million) BioForm would become a wholly-owned sub- lio,”Bernick added. to acquire the medical aesthetics company Bio- sidiary of Merz and would be renamed Merz The scale of the business, the awareness Form Medical. Aesthetics, the company noted. levels of the brand and its differentiated posi- The German firm said the deal – which is Jochen Hückmann, the chairman of Merz’ tioning all matched the company’s strategic expected to close in the first quarter of 2010 shareholders council, said that adding BioForm criteria, Alberto Culver pointed out, adding that – would advance its strategy of becoming a to the company gave it “greater potential for it would make the company the number two “leading player in aesthetic medicine, a fast future growth in our worldwide, fast growing skincare manufacturer in the UK. growing, multibillion dollar global market”. aesthetics and dermatological business”. Alberto Culver manufacturers and markets Described as a leader in the dermal filler Merz reported healthcare turnover of C 590 a number of beauty care brands including the market in the US and Europe, BioForm’s port- million in the year ended 30 June 2009, an in- Alberto VO5 haircare brand and Noxzema folio of dermal-filler products is led by its Rad- crease of 7.9% (OTC bulletin,30 November skincare range. iesse flagship brand. The company’s products 2009, page 8). OTC are designed to enhance aesthetic procedures OTC

6 OTC bulletin 20 January 2010 Awards10 Ad-12Oct09:Awards08 Advert corners 10/12/09 13:11 Page 1

in association with OTCMarketingAwards Recognising the2020 achievements1010 of the British OTCindustry Gala Dinner &Awards Presentation

Park Lane Hotel, Piccadilly, London, Thursday 4th March 2010

Twenty prestigious Awards will be presentedonthe night

◆ OTCCompany of the Year ◆ OTCBrand of the Year ◆ OTCLaunch of the Year Winners 2009 ◆ OTCBrand Revitalisation of the Year Sponsor ◆ Most Innovative New OTCProduct ◆ Best OTCMarketing Campaign on aBig Budget an Award ◆ Best OTCMarketing Campaign on aSmall Budget ◆ Best OTCConsumer Advertising on Television BOOK ◆ Best OTCConsumer Advertising in the Press ◆ Best OTCConsumer Advertising Out-of-Home YOUR ◆ Best OTCConsumer Advertising on the Internet TICKETS ◆ Best OTCPublic Relations Campaign for aMedicine NOW ◆ Best OTCPublic Relations Campaign for aNon-Medicine ◆ Best New OTCPackaging Design ◆ Best OTCDirect Marketing Campaign ◆ Best OTCTrade &Professional Advertising ◆ Best OTCPharmacy Training ◆ Best OTCPharmacy Support Package ◆ Best OTCPharmacy Salesforce Also presented on the night –Best OTCMultiple Retailer of the Year The OTC Industry Makes Its Mark

Sponsored by

ContactJennaLawrence or ValDavis at OTC bulletin to book your Gala Dinnertickets or request aSponsorship InformationPack. Tel: 01564 777550 Fax: 01564 777524 E-mail: [email protected], or [email protected] Website: www.otc-bulletin.com/awards OTC20-01-10p8-9FIN.qxd 15/1/10 13:05 Page 2

OTC COMPANY NEWS

Annual Results Business Strategy Lithuanian deal Pharmacy Chain 36.6 drives up Anzag raises RUB2.3 billion cquiring Lithuania’s Armila from 1 Sept- Aember 2008 helped German wholesaling group Anzag increase its turnover by 4.1% to harmacy Chain 36.6 has raised RUB2.3 This had led to some stores suffering from C3.97 billion in the year ended 31 August 2009. Pbillion (C54 million) through a new share “stock outs”, the company added (OTC bul- Armila contributed C68.7 million to Anzag’s placing to help pay the company’s debt and in- letin,18 December 2008, page 4). total gross sales outside of Germany, which crease working capital. The successful share placing came after the were ahead by 83% to C280 million. The re- Artem Bektemirov, Pharmacy Chain 36.6’s firm had reported a double-digit decline in sales mainder came from the German firm’s oper- chief executive officer,said the successful plac- at the Retail division in the third quarter of 2009. ations in Croatia and Romania. ing of the additional 85.5 million shares meant Retail sales fell by 29.8% to RUB3.5 billion Anzag said it had raised its gross margin by the Russian pharmacy chain had “successfully for the three months, with the number of pur- 0.43 percentage points to 6.39%, even though overcome” one of the “most complicated peri- chases 34.9% lower than a year earlier. more pharmaceutical manufacturers in Ger- ods” in its history. One area of growth for the Retail business many were delivering their products directly. Investors’ continued willingness to invest was in sales of store-brand products. Store- Earnings before interest and tax (EBIT) funds to aid the group’s development confirm- brand turnover grew by 8.7% to RUB281 mil- improved by a quarter to C35.0 million, al- ed the potential of the business, Bektemirov lion during the third quarter,representing 8.3% though Anzag said its prior-year profits had claimed, adding that all of its efforts were now of the Retail division’s total sales. been depleted by one-off costs. aimed at improving the company’s operational Pharmacy Chain 36.6 said that with con- In 2010, the German group expects to raise results and profitability. sumers looking to buy cheaper products and group sales by 4% to around C4.1 billion. Cash-flow problems and a failure to refin- the company consistently making additions to OTC ance the firm’s debt – which stood at RUB5.1 its store-brand range, store-brands would con- billion as of 30 September 2009 – have plagued tribute significantly to Retail division’s prof- Annual Results Pharmacy Chain 36.6 over the past year as the itability in the fourth quarter of 2009. rapidly-expanding business has suffered from Pharmacy Chain 36.6 was operating 1,026 Ratiopharm is the economic slowdown. The company’s Retail pharmacies across Russia as of 30 Septem- division accounted for RUB4.4 billion of the ber 2009. debt, with the remainder held by its Veropharm The Retail division accounted for 77% of above forecast manufacturing business. Pharmacy Chain 36.6’s total third-quarter sales, In the past, the company admitted that its which fell by 26.3% to RUB4.6 billion. The atiopharm announced it had exceeded its accounts payable – particularly by the Retail Veropharm manufacturing subsidiary – where R profits forecast by about 20% when the division – had grown as it had tried to meet sales declined by 13.6% to C868 million – gen- firm posted earnings before interest, tax, depre- other financial obligations. erated a further 19%. ciation and amortisation (EBITDA) of approx- OTC imately C 300 million last year. The German OTC and generics player’s group turnover stood still at around C 1.6 bil- Business Strategy Mergers & Acquisitions lion, as international growth compensated for a difficult trading environment in Germany. Futura talking to Alapis grabs 50% The German firm now generates more than half of its sales outside of its domestic market. partners in US stake in Genesis “We have managed clearly to exceed our forecasts even though we have restructured the utura Medical said it had completed the lapis – the Greek healthcare group – has Ratiopharm group,”insisted the group’s chief F modifications to its PET500 topical OTC Aacquired a 50% stake in Turkish pharma- executive officer Oliver Windholz. product to delay ejaculation and was in talks ceutical firm Genesis Ilac for C1.7 million. The restructuring measures came as Ratio- over marketing the product in the US. Genesis offered a range of prescription and pharm’s owners, the Merckle family,put the The UK-based firm announced last year it OTC brands, Alapis said, which were mainly company up for sale (OTC bulletin,30 Nov- was modifying PET500’s formulation to com- distributed to healthcare professionals. The ember 2009, page 3). ply with an existing US Food and Drug Admin- Turkish company generated sales of C8.2 mil- Windholz highlighted Ratiopharm’s success istration (FDA) monograph, so the product lion in 2008. in winning contracts in the generic tenders that could be marketed in the US without any fur- Alapis’ healthcare business – which consists were now prevalent among Germany’s health ther clinical data (OTC bulletin,30 Septem- of pharmaceuticals, OTC, veterinary and med- insurance funds. “Our strategy remains clear – ber 2009, page 5). ical devices – reported sales of C708 million in growing turnover and market share, but not at Futura noted studies on its topical OTC pain the first nine months of 2009. Earnings before any price,”he stated. relief product TPR100 had been completed. interest and tax were C184 million. OTC OTC OTC

8 OTC bulletin 20 January 2010 OTC20-01-10p8-9FIN.qxd 15/1/10 13:05 Page 3

COMPANY NEWS OTC

Mergers & Acquisitions Kraft sweetens Cadbury takeover offer

raft Foods has increased the cash part of Kraft’s share price since its initial offer in ber when it confirmed that it was reviewing its Kits £10 billion (C11 billion) hostile take- September,the value of the deal had actually options and could not say whether an offer over bid for Cadbury,owner of the world’s lead- fallen to £9.8 billion. would be forthcoming. ing medicated confectionery,the 100 year-old At the time, Carr said there was “no strate- The Italian company Ferrero – owner of the Halls cough brand. But the revised terms do not gic, managerial, operational or financial merit Nutella brand – has also been linked with a increase the bid’s value. in combining with Kraft” and that the company possible bid for Cadbury. The move came as the US-based group re- actually felt the reverse was true. “Whilst Kraft One press report suggested that Ferrero and vealed its original bid had been accepted by needs Cadbury,Cadbury does not need Kraft,” Hershey could make a joint bid. shareholders representing just 1.5% of Cad- Carr stressed. Cadbury returned the Halls brand to UK bury’s shares by the initial acceptance dead- Irene Rosenfeld, chairman and chief exec- ownership when it bought the Adams confec- line of 5 January 2010. The company has now utive officer of Kraft, said that despite Cadbury’s tionery business from Pfizer in 2003, following given Cadbury’s shareholders until 2 Febru- accusations, Kraft would continue with its “dis- the US drug firm’s acquisition of Warner-Lam- ary to accept the offer. ciplined” pursuit of the company. bert (OTC bulletin,24 January 2003, page 4). Speaking as Cadbury reported sales up by Meanwhile, Nestlé announced that it would Todd Stitzer,Cadbury’s chief executive offi- 11% to £5.98 billion and operating profit ahead not make, or participate in, a formal offer for cer,said Halls was one of the firm’s most prof- by 27% to £808 million for 2009, Roger Carr, Cadbury. The Swiss firm had been linked with itable brands and had been expanded into new the UK-based firm’s chairman, urged Cadbury’s a possible move for Cadbury in a number of functional areas and refresh segments. This had shareholders to not let Kraft “steal your com- media reports. enabled the brand to move beyond its traditional pany with its derisory offer”. Other sources have suggested that Cadbury is cough and cold niche to a more mainstream set Carr maintained the revised offer exposed discussing a merger with chocolate manufac- of consumers, Stitzer pointed out, and had dri- the “weakness” of Kraft’s management, adding turer Hershey. The US-based firm has not offi- ven the brand’s annual sales to £450 million. that the “derisory offer” had been limited by cially added to its statement issued in Novem- OTC the company’s “powerful” existing shareholders restricting the stock content of the bid, while its credit-rating agencies had limited the cash content of the deal. The offer was “very significantly below all comparable transactions in the sector”, Carr insisted, and exposed Cadbury’s shareholders to Kraft’s “low growth” business model as well as its “long history of under performance and its track record of missed targets”. Explaining the changes to its offer,Kraft said it would use the US$3.7 billion (C2.6 billion) proceeds from the agreed sale of its US frozen pizza business to increase the amount of cash it was offering Cadbury’s shareholders in place of some of the new Kraft shares they would have otherwise received. The decision had been based on the “desire expressed by some Cadbury’s security holders” to have a greater proportion of the offer in cash, Kraft said, and because some of its own shareholders had expressed a desire for the company to “be more sparing” in the use of its shares as currency for the deal. Cadbury’s board flatly rejected a £10.2 billion unsolicited offer from Kraft in September (OTC bulletin,16 September 2009, page 3). However, on 9 November,Kraft took the same offer directly to Cadbury’s shareholders (OTC bulletin,30 November 2009, page 3). In December,Cadbury urged shareholders to reject Kraft’s offer as it fell “well short of reflecting the value” of the firm. The UK company pointed out that due to a 5% decline in

20 January 2010 OTC bulletin 9 OTC20-01-10p10FIN.qxd 18/1/10 07:51 Page 2

OTC GENERAL NEWS

Switches Switches Flomax Relief to New Zealand agrees to flow from March switch oral famciclovir oehringer Ingelheim said Flomax Relief Bwould be available without a prescription in UK pharmacies from March. ew Zealand has given the go-ahead for oral released. For example, the application included The company is backing the launch with a Nfamciclovir to be switched to non-prescrip- a treatment algorithm to help pharmacists iden- “high-profile” marketing campaign including tion status for treating cold sores. tify patients who might benefit from the appro- consumer advertising, public relations activ- From this month, when the switch should be priate cold-sore therapy and to screen out pat- ity and point-of-sale material, which will com- implemented, New Zealand becomes the first ients who were unsuitable for OTC treatment. mence in late March or early April. A pharma- country in the world to give non-prescription Novartis also changed the proposed brand name cist-training programme, including a national status to oral famciclovir. Topical medicines to Famvir Once. roadshow, is already available. for treating cold sores are already sold with- Launch pharmacy-press advertising, includ- out a prescription in many countries. Lansoprazole gets the go-ahead ing a fake cover to C&D magazine, carries the Oral famciclovir is currently available in At its November meeting, the committee headline “Help men take control of their an- key markets around the world from Novartis also approved an application from Douglas Phar- noying pee problems”. Pharmaceuticals as the prescription-only drug maceuticals to switch Solox 15mg lansoprazole A two-week trial pack of Flomax Relief con- Famvir,which is indicated for treating cold sores, capsules from prescription-only to non-prescrip- taining 14 capsules has a recommended retail genital herpes and shingles. tion status as a heartburn medicine. A previous selling price of £8.99 (C10.19), while a four- In neighbouring Australia, a similar switch attempt to gain restricted non-prescription med- week supply of 28 capsules costs £16.99. for oral famciclovir has been turned down twice icine status had been rejected. In December,the UK became the first coun- (OTC bulletin,18 December 2009, page 9). Bayer New Zealand’s application to switch try in the world to make Boehringer Ingelheim’s New Zealand’s Medicines Classification Losec 20mg omeprazole tablets to non-prescrip- Flomax a non-prescription medicine for treat- Committee said Novartis New Zealand could tion status as a restricted medicine was also ap- ing benign prostatic hyperplasia (BPH), or an market Famvir Once as a restricted or pharm- proved by the committee. The 10mg strength enlarged prostate (OTC bulletin,18 December acist-only medicine. The non-prescription prod- was launched as a non-prescription medicine 2009, page 1). The UK’s Medicines and Health- uct will be supplied as a pack of three, 500mg in New Zealand last year (OTC bulletin,31 care products Regulatory Agency (MHRA) ap- famciclovir tablets. August 2009, page 17). proved the switch of 0.4mg tamsulosin hydro- The approval comes six months after the In addition, the committee gave the go-ahead chloride capsules from prescription-only to phar- committee turned down a similar application for Sanofi-Aventis Australia’s fexofenadine-bas- macy (POM-to-P) status under the Flomax Re- from Novartis. It said at the time that a few out- ed Telfast to be reclassified from a pharmacy- lief brand name. standing issues needed to be resolved (OTC only to a general-sales medicine. The switch ap- Flomax Relief is indicated for treating low- bulletin,30 June 2009, page 1). plies to capsules containing 60mg or less and er urinary-tract symptoms, such as urinary hes- Some changes were made to the applica- tablets with 120mg or less. itancy and frequent urination, in men aged be- tion considered at the committee’s 3 Novem- tween 45 and 75 years. ber meeting, for which minutes have just been Curbs for codeine medicines OTC Meanwhile, the committee has recommended that codeine in combination products should be Switches classified as a restricted medicine when each dose unit contains not more than 15mg of cod- Australia considers pantoprazole move eine base, the maximum daily dose is limited to 100mg codeine base, and the pack size is not n application to allow the proton-pump in- Nycomed markets 20mg pantoprazole tab- more than five days’ supply. Ahibitor pantoprazole to be advertised to lets under the Somac Heartburn Relief brand Furthermore, the committee wants New Zea- Australians will be considered next month. as a Schedule 3, or pharmacist-only,non-pre- land’s regulatory agency, Medsafe, to require The country’s National Drugs and Poisons scription medicine. labelling for codeine-containing medicines to Schedule Committee (NDPSC) will review the carry warning statements similar to those used application at its next meeting to be held on Flurbiprofen will be discussed in the UK (OTC bulletin,16 September 2009, 16-17 February 2010. At the February meeting, the NDPSC will page 1). These would read: “Do not use for more Last year,the NDPSC rejected a proposal to also consider the legal status of flurbiprofen, than three days” and “Codeine is an addictive add 20mg pantoprazole to Appendix H, which including a proposal to exempt from schedul- substance”. would have allowed the medicine to be adver- ing all topical oral flurbiprofen preparations. Cough and cold preparations containing co- tised to consumers. The committee said at the After referrals from New Zealand’s Medi- deine will remain pharmacy-only medicines, but time that there was a “lack of Australian data cines Classification Committee, the NDPSC this will be reviewed in 12-18 months. on pantoprazole as an OTC medicine”, and it will also consider the status of famciclovir,fex- The codeine recommendations follow sev- was “premature” to consider an Appendix H list- ofenadine, lansoprazole and omeprazole. eral years of discussions. ing (OTC bulletin,17 April 2009, page 8). OTC OTC

10 OTC bulletin 20 January 2010 OTC20-01-10p11FIN.qxd 15/1/10 13:11 Page 3

GENERAL NEWS OTC

Regulatory Affairs Regulatory Affairs Germany plans to restrict Counterfeit report exempts OTC drugs pack sizes for analgesics nti-counterfeiting measures proposed by A the European Commission may not be needed for certain generic drugs and for all on-prescription packs of popular oral an- a proposal on harmonising pack sizes of non- non-prescription medicines, according to the Nalgesics including acetylsalicylic acid, di- prescription analgesics. The issue was then put rapporteur on the measures for the European clofenac and ibuprofen will be restricted to 20 on the agenda for the committee’s meeting this Parliament’s influential Environment, Public units per pack, if the German parliament fol- month (OTC bulletin,30 November 2009, Health and Food Safety committee. lows the recommendations of its Expert Com- page 11). Marisa Matias agrees with the Commission mittee for Prescription. At present, German consumers can purch- in her draft report for the Parliament’s lead On 12 January,the expert committee voted ase large packs of oral analgesics from phar- committee on the legislation (OTC bulletin, in favour of curbing pack sizes for non-prescrip- macies without a prescription. For example, 16 November 2009, page 16) that OTC med- tion analgesics on the grounds of improving pat- Bayer Consumer Care’s Aspirin tablets – each icines should be made exempt from the new ient safety. containing 500mg acetylsalicylic acid – are law’s provisions on ‘safety features’, at least Packs of acetylsalicylic acid for self-med- available as 50- and 100-unit packs. It also pos- initially. She adds, however, that this exemp- ication are to contain a maximum of 10,000mg sible to buy similar-sized packs of ibuprofen tion should be reviewed within five years of of the active ingredient, which is equivalent to tablets for self-medication. the directive coming into force. a pack of 20 x 500mg-strength tablets. However, restrictions limiting paracetamol Similarly,packs of 25mg diclofenac tablets to a maximum of 10,000mg per non-prescrip- Driven by economic reasons are to be restricted to 20 units, with a maximum tion pack came into effect on 1 April 2009. These ‘safety features’ – for identifying, amount per pack of 500mg. Meanwhile, the expert committee rejected authenticating and tracing medicines – must Ibuprofen will be subject to a similar restric- an application to switch liquid formulations be made mandatory for prescription medi- tion of 20 x 400mg-strength tablets, totalling of the antidiarrhoeal loperamide to non-pre- cines, she believes, but adds that medicines 8,000mg per pack. scription status. will only be falsified “if there are economic Phenazone and propyphenazone are also cov- The expert committee, which is scheduled reasons for doing so”. ered by the proposed measure, which would im- to meet again on 6 July this year,will now for- “Because of the low cost of generic medi- pose a limit of 10,000mg of each active ingre- ward its recommendations to Germany’s min- cines, it is less profitable to falsify [them],” dient per non-prescription pack. istry of health. Provided a statutory order tab- she says. “The performance criteria for the At its meeting in June of last year (OTC led by the ministry is accepted by Germany’s safety features can be waived for certain gen- bulletin,30 June 2009, page 1), the expert com- upper house of parliament, the Bundesrat,any eric medicines or product categories if this is mittee asked Germany’s federal institute for changes could come into effect from 1 June in accordance with the conclusions of a risk drugs and medical devices (BfArM) to prepare this year. assessment.” OTC Matias notes opposing industry factions: those that want to reduce intermediaries and Regulatory Affairs focus on the risks presented by products; and those that would prefer efforts were made to US FDA creates a presence in Mexico improve the integrity of the supply chain “without taking part in the sharing of responsibili- he Food and Drug Administration (FDA) the agency’s staff would also work with indus- ties or costs”. She says both interests should T in the US has opened an office in Mexico try in Mexico. “FDA experts in Mexico City be taken into account, but the overriding con- City as part of its ongoing efforts to increase will work closely with local industries that sideration should be patient safety. scrutiny of medical and food products out- ship food and medical products to the US to side of the US. improve their understanding of US safety and Lack of clear definitions The office in Mexico City is the agency’s product quality expectations,”he explained. The Commission is also taken to task by third post in Latin America and its 10th out- “Their activities will include providing tech- Matias for not providing clear definitions,both side the US. nical advice and working with government of products and actors in the supply chain, The FDA said staff assigned to Mexico City agencies and the private sector to develop cer- such as traders and brokers. would work with their counterparts in the Mex- tification programmes.” Ignoring internet sales, which represent “one ican government to harmonise regulations and The FDA’s two existing posts in Latin Ame- of the main routes for falsified medicines to guidance standards. Collaborations would in- rica are located in Chile and Costa Rica. The enter the European Union”, is another major clude information-sharing on regulatory sys- agency also has international posts in China, deficiency of the Commission’s proposal, in tems and joint workshops on the safety of food India and Europe. her view. Matias recommends raising public and medical products, commented the regu- Plans to open a series of international posts awareness of the dangers of buying medicines latory agency. were announced by the FDA in 2008 (OTC from websites and proposes a scheme that Murray Lumpkin, the FDA’s deputy com- bulletin,31 October 2008, page 14). would validate legitimate internet traders. missioner for international programmes, said OTC OTC

20 January 2010 OTC bulletin 11 OTC20-01-10p12-13FIN.qxd 15/1/10 13:14 Page 2

OTC GENERAL NEWS

CONSUMER viewpoint ...... mouth ulcer

Mouth ulcers are the subject of this month’s Consumer viewpoint survey France 1.9% of ailments suffered by Europe’s Germany 1.2% consumers. The survey appears Italy 3.0% exclusively in OTC bulletin courtesy Spain 2.9%

of Ipsos MORI. UK 7.0% 0.0 2.0 4.0 6.0 8.0 ritish people are more likely to say they Proportion of consumers who say they have suffered from mouth ulcers (%) Bhave suffered from mouth ulcers during the past year than their counterparts in France, Figure 1: Proportion of consumers in France, Germany, Italy, Spain and the UK who say they have suffered from Germany, Italy or Spain, according to our Con- mouth ulcers within the past year (Source – OTC bulletin 2010/Ipsos MORI) sumer viewpoint European survey. Proportion of sufferers (%) Index Of the five countries covered by the Ipsos Fra Ger Ita Spa UK Fra Ger Ita Spa UK MORI survey,the UK has the highest proportion of people who say they have suffered from Male 47.8 46.9 70.3 30.6 53.0 100 97 144 64 109 mouth ulcers during the past year at 7.0%, fol- Female 52.2 53.1 29.7 69.4 47.0 100 103 58 132 91 lowed by Italy at 3.0%, Spain at 2.9%, France 18-24 23.3 7.2 2.9 11.2 21.0 203 81 32 93 168 at 1.9% and Germany at 1.2% (see Figure 1). 25-34 20.1 13.3 11.3 21.4 15.5 106 98 64 103 93 The low incidence of mouth ulcers in most 35-44 6.6 32.6 10.8 26.5 22.4 34 162 55 139 114 countries means the following results should 45-54 19.7 28.0 19.7 18.6 19.1 128 156 120 115 112 be treated with caution. 55-64 11.4 8.7 32.7 17.6 7.0 67 60 221 140 48 As can be seen from Figure 2, there are sig- 65+ 18.8 10.4 22.7 4.7 15.0 105 42 122 24 77 nificant variations across the five countries in terms of the sex and age of sufferers. Younger Figure 2: Consumers in France, Germany, Italy, Spain and the UK who say they have suffered from mouth ulcers in the past year, analysed by sex and age. The index indicates the likelihood that a consumer in a specific population people in the UK and France are more likely group will have suffered from mouth ulcers, and is the ratio of the proportion of total sufferers in a population to experience mouth ulcers. group to the proportion of that group in the population as a whole (Source – OTC bulletin 2010/Ipsos MORI) OTC remedies are the most popular treatment option for mouth ulcers in Italy,Spain Ipsos MORI and the ailments survey and the UK (see Figure 3). The French favour prescription products, while Germans are most ur Consumer viewpoint ailments survey appears exclusively in OTC bulletin courtesy likely to turn to herbal remedies. Oof Ipsos MORI. The survey is based on research conducted in February 2009 using Capi- Spain has the highest proportion of sufferers bus, the market researcher’s weekly European omnibus service. Ipsos MORI carried out face- who have treated the condition with an OTC to-face interviews with 1,000 plus adults in each of the survey countries – France, Germany, remedy at 69.4% (see Figures 4 and 5). Italy,Spain and the UK. An OTCremedy was defined as a product purchased over-the-counter France has the highest proportion of pre- from a pharmacy or off a shop shelf. scription treaters at 53.9% (see Figure 6). Germany has the highest proportion of her- ■ For more information on the research supplied by Ipsos MORI, please contact Susan Purcell (Tel: +44 208 bal treaters at 29.0% (see Figure 7). 861 8000; Fax: +44 208 861 5515; E-mail: [email protected]). OTC OTC

80.0

60.0 Product type

OTC

40.0 Prescription

Herbal 20.0

0.0

Proportion of sufferers treating with..... (%) France GermanyItaly Spain UK

Figure 3: Proportion of consumers in France, Germany, Italy, Spain and the UK who say they have suffered from mouth ulcers who have treated the condition with an OTC, prescription or herbal remedy (Source – OTC bulletin 2010/Ipsos MORI)

12 OTC bulletin 20 January 2010 OTC20-01-10p12-13FIN.qxd 15/1/10 13:14 Page 3

GENERAL NEWS OTC

Switches ...... mouth ulcers Germany completes pantoprazole switch

9.7% France edicines containing 20mg pantoprazole Germany 21.4% M for short-term treatment of heartburn and

Italy 61.1% acid reflux now have non-prescription status in Germany. Spain 69.4% Germany’s upper house of parliament, the UK 42.7% Bundesrat, voted on 18 December in favour of 0.0 20.0 40.0 60.0 80.0 switching such formulations from prescription- only to non-prescription status. The switch took Proportion of consumers suffering from mouth ulcers who have treated the condition with an OTC remedy (%) effect from 1 January. Figure 4: Proportion of consumers in France, Germany, Italy, Spain and the UK who say they have suffered from The maximum pack size is 14 tablets or cap- mouth ulcers who have treated the condition with an OTC remedy (Source – OTC bulletin 2010/Ipsos MORI) sules, and the non-prescription version is indi- Proportion of sufferers treating with OTC(%) Index cated solely for adults (OTC bulletin,18 Dec- Fra Ger Ita Spa UK Fra Ger Ita Spa UK ember 2009, page 11). The proposed switch was announced soon Male 42.2 –72.1 29.1 57.0 88 – 148 61 117 after Nycomed introduced 20mg pantoprazole Female 57.8 100 27.9 70.9 43.0 111 194 54 135 84 tablets in Germany as the non-prescription med- 18-24 –33.5 –13.7 17.3 – 376 – 114 138 icine Pantozol Control (OTC bulletin,30 Sep- 25-34 –––26.0 23.4 –––126 140 tember 2009, page 20). 35-44 –26.0 15.0 29.6 18.1 – 129 76 156 92 Germany was one of the first countries where 45-54 57.8 –21.5 10.9 24.2 375 – 131 67 142 Nycomed launched Pantozol Control after the 55-64 –40.5 35.5 12.9 5.1 – 281 240 102 35 20mg pantoprazole tablet gained non-prescrip- 65+ 42.2 –28.0 6.8 11.9 236 – 151 35 61 tion status for frequent heartburn throughout the European Union in June (OTC bulletin, Figure 5: Consumers in France, Germany, Italy, Spain and the UK who have used an OTC remedy to treat mouth 19 June 2009, page 1). ulcers, analysed by sex and age. The index provides a measure of the likelihood that a consumer suffering from mouth ulcers in a specific population group will have treated the condition with an OTC remedy, and is the ratio According to the German ministry,switch- of the proportion of total OTC treaters in a population group to the proportion of that group in the population as ing all 20mg pantoprazole formulations with a whole (Source – OTC bulletin 2010/Ipsos MORI) a maximum pack size of 280mg would “improve transparency” after Nycomed’s switch took effect throughout the European Union. France 53.9% The European Commission’s Pharmaceu-

Germany 14.8% ticals Unit says the “same medicinal product” should not, as a general rule, have both pre- Italy 29.5% scription-only and non-prescription status in the same member state of the European Union Spain 20.5% ( OTC bulletin,29 May 2009, page 12). UK 14.9% The “same medicinal product” is defined as

0.0 10.0 20.0 30.0 40.0 50.0 60.0 the same active substance at the same strength and in the same pharmaceutical form. The ap- Proportion of consumers suffering from mouth ulcers who have treated the condition with a prescription remedy (%) proved indications for prescription-only 20mg Figure 6: Proportion of consumers in France, Germany, Italy, Spain and the UK who say they have suffered from pantoprazole formulations in Germany include mouth ulcers who have treated the condition with a prescription remedy (Source – OTC bulletin 2010/Ipsos MORI) heartburn and acid reflux. As pantoprazole lost patent protection in Germany earlier this year,the switch should France 12.2% see many branded and generic companies in- troduce non-prescription competitors to Ny- Germany 29.0% comed’s Pantozol Control. Italy 17.7% OTC

Spain 4.7% IN BRIEF

UK 1.4% ■ MHRA – the UK’s Medicines and Health- care products Regulatory Agency – has issued 0.0 10.0 20.0 30.0 40.0 new guidance on the naming of medicines. Proportion of consumers suffering from mouth ulcers who have treated the condition with a herbal remedy (%) The regulatory body said the guidance con-

Figure 7: Proportion of consumers in France, Germany, Italy, Spain and the UK who say they have suffered from solidated existing requirements. mouth ulcers who have treated the condition with a herbal remedy (Source – OTC bulletin 2010/Ipsos MORI) OTC

20 January 2010 OTC bulletin 13 OTC20-01-10p14-15FIN.qxd 15/1/10 13:15 Page 2

OTC MARKETING NEWS

Regulatory Affairs Switches UK MHRA restricts Austria gives OTC status to sales of painkillers emergency contraception est practice for the sale of medicines for Bpain relief has been published by the UK’s Medicines and Healthcare products Regulatory ustrian women now have access to emer- in clinical trials for Vikela had suffered from Agency (MHRA). Agency contraception without a prescrip- side-effects including bleeding and sensitive Retailers should not sell more than two packs tion, after the country’s federal office for health- breasts, the BASG acknowledged. However, in one transaction, according to the MHRA’s care safety,the BASG, decided on 17 Decem- such side-effects typically abated within 48 best-practice guidance, neither should they pro- ber 2009 to switch Vikela 1.5mg levonorges- hours, it added. mote offers that encourage the sale of more than trel tablets to pharmacy-only status. Within Europe, the BASG observed, lev- one pack at a time. However, the best practice Local company Sanova Pharma is market- onorgestrel was already available without pre- guidance does not prevent reduced price of- ing the morning-after pill in Austria for the scription in Belgium,Denmark, Estonia, Fin- fers on single packs. marketing-authorisation holder,France’s HRA land, France, Iceland, Latvia and Luxembourg, Pharma. The recommended retail selling price as well as Norway,Portugal, Slovakia, Switzer- Voluntary restrictions for a single tablet is C 11.90. land, Sweden, the Netherlands and the UK. Described as “voluntary restrictions” by “As an emergency contraceptive,Vikela is Levonorgestrel was first authorised in Aus- the MHRA, the best-practice guidance adds a relatively safe method – when used correctly tria in 2005. The switched medicine is iden- to the medicines legislation. This states that it – to prevent an unwanted pregnancy after un- tical to Norlevo 1.5mg in France and Unofem is illegal to sell more than 100 tablets or cap- protected sex or when other contraception meth- 1.5mg in Germany. sules of either paracetamol or aspirin in any ods fail,”the BASG stated. However, whereas HRA Pharma’s Norlevo one retail transaction. The 1.5mg dose of levonorgestrel was “med- 1.5mg has been available without a prescrip- The maximum pack size for pain-relief med- ically harmless”, the BASG continued, but its tion in France since the end of 2004 (OTC bul- icines in a general-sale outlet is 16 tablets or previous prescription-only status had prevent- letin,17 December 2004, page 17), German capsules. A pharmacy may sell larger packs ed Austrian women from gaining access to the politicians have failed to act on the advice of containing up to 32 tablets or capsules under emergency contraceptive within the necessary their Expert Committee for Prescription that the supervision of a pharmacist. 72 hours after intercourse. a switch should go ahead (OTC bulletin,31 “Restricting the availability of these medi- Up to 30% of women who were observed July 2003, page 14). cines has proved to be effective in reducing the OTC harm from accidental or intentional overdose, estimated from number of deaths and hospi- Product Launches tal admissions,” commented June Raine, the MHRA’s director of vigilance and risk man- Xerclear obtains OTC status in Sweden agement of medicines. “Clearly stating ‘best practice’ for sale of non-prescription pack of Medivir’s com- prevent the incidence of cold sores and shorten these medications,”Raine added, “will ensure A bination cold-sore medicine, Xerclear,will healing times. “Current therapies shorten heal- that retailers are meeting a customer’s imme- be introduced in Sweden during the second quar- ing times but have not been clinically dem- diate need for pain relief while helping to min- ter of this year. onstrated to be able to prevent the incidence imise stockpiling and the risk of overdose.” The 2g tube will join the prescription-only of cold sores,”added the company. The MHRA said the best-practice guid- 5g tube of Xerclear,which is set to be launch- Xerclear was approved in 14 countries in ance was the result of work with stakeholders ed in Sweden this quarter. Europe last year through a European licens- representing both large and small retailers, Medivir said that Xerclear – a topical medi- ing procedure. pharmacists, trading standards offices and the cine containing 50mg/g aciclovir and 10mg/g The medicine was also authorised in the US pharmaceutical industry,as well as the British hydrocortisone – was “the first and only top- on 31 July 2009 as a prescription-only drug Retail Consortium (BRC) and the Association ical treatment that has been demonstrated to under the Lipsovir brand name. of Convenience Stores (ACS). OTC In December,the MHRA highlighted two cases of retailers selling multiple packs of pain relievers. A Home Bargains store was warned for selling a customer six packs of 16 parac- We also publish etamol tablets, while a Dips News and Off Lic- ence ran into trouble for allegedly selling more than 100 tablets of paracetamol in one go. Generics bulletin The MHRA said both retailers had reviewed their policies on the sale of paracetamol and aspirin, and had restricted the sale of these products to a maximum of two packs of 16. Visit www.genericsbulletin.com to find out more OTC

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MARKETING NEWS OTC

Product Launches Product Recalls DEcarb grows Goldshield’s McNeil extends weight-loss portfolio in UK US Tylenol recall cNeil Consumer Healthcare has expand- oldshield has expanded its portfolio of M ed its voluntary recall of Tylenol Arthri- Gweight-management products in the UK tis Pain caplets in the US to cover all lots of with a “natural carbohydrate blocker”, which 100-count bottles with the red EZ-OPEN cap. is aimed at “people with a dietary weakness In November,the Johnson & Johnson sub- for starchy carbohydrates such as pasta, rice sidiary voluntarily recalled five product lots. and noodles”. The company commented at the time that it DEcarb is a medical device containing white had identified an “uncharacteristic smell or kidney bean extract. Goldshield said the extract taste associated with these lots that led to a had been shown in clinical studies to reduce small number of consumers reporting nausea calorie intake by inhibiting the enzymes that and related symptoms” (OTC bulletin,16 Nov- the body uses to breakdown carbohydrates. Ac- ember 2009, page 17). cording to Goldshield, DEcarb could block up to 66% of dietary carbohydrates eaten. Chemical used to treat wooden pallets DEcarb can be purchased from the brand Noting the recall had been expanded as a website at www.decarb.co.uk or the company precaution, McNeil said that the uncharacter- website at www.goldshield.co.uk. Goldshield istic smell was caused by the presence of trace noted that DEcarb would be available from re- amounts of a chemical called 2,4,6-tribromo- tail stores in the summer. anisole. “The source of 2,4,6-tribromoanisole A pack of 60 tablets has a recommended re- is believed to be the breakdown of a chemical Goldshield says its new DEcarb weight-management tail selling price of £29.95 (C33.50). Packs carry product is aimed at “people with a dietary weakness used to treat wooden pallets that transport and straplines pointing out that the product is “For for starchy carbohydrates” store packaging materials,”explained the com- weight management”, “Reduces dietary carbo- pany. “The health effects of this compound hydrate absorption by up to 66%”, and “Re- France and the UK with Flexeze Fortify. The have not been well studied, and to date all of duces food cravings”. newcomer contains a patented collagen hydro- the observed events reported to McNeil were DEcarb joins Goldshield’s growing portfo- lysate called Fortigel, and is backed by the on- temporary and non-serious.” lio of weight-management products. The com- pack claim “Supports the natural rebuilding of OTC pany’s Appesat is a medical device based on a joint cartilage”. “naturally-sourced fibre complex from sea- Goldshield maintained that Flexeze Fortify weed”, and is described on the packaging as was the “next step up from traditional gluco- a “Clinically-proven natural appetite suppres- samine-based products”. “It deals with the root sant”. Meanwhile, LIPObind is a “natural slim- cause of joint problems and helps rebuild car- ming aid derived from dried cactus extract”, tilage that is usually damaged by the wear and which is said on the packaging to be a “Clin- tear of arthritis,”explained the company, adding ically proven fat binder”. that glucosamine, by contrast, mostly slowed In a separate development, Goldshield has down the effects. extended its Flexeze joint-health brand in both Flexeze Fortify is a food supplement supplied as powder to be dissolved in water. The The “show and tell” commercial for Canesten Duo is pack of 30 one-a-day sachets sells for £29.99 back on television in the UK this month. Bayer Consumer Care is investing £1 million in the UK. ( C 1.1 million) in a burst of advertising running A spokesperson for Goldshield told OTC nationally from 11 January until the end of March. bulletin that Flexeze Fortify would be launch- First shown in 2008, the animated commercial demonstrates the product’s dual approach to ed in the US this summer through the comp- treating vaginal thrush. With the aid of a flip chart, any’s website. Goldshield was also consider- a woman explains how Canesten Duo’s oral ing launches in other European countries, add- fluconazole capsule helps to clear the internal infection while its topical clotrimazole cream ed the spokesperson, and was in discussions to cools the external symptoms. “Cools and clears,” make the product available from retail stores is the sign-off message to viewers (OTC bulletin, 30 in the UK. May 2008, page 16). Bayer noted that the commercial had recently Existing products in the Flexeze range in- been modified to place greater emphasis on the clude: oral tablets and capsules containing glu- “unique” double-strength 2% clotrimazole cream. cosamine and chondroitin sulphate; a liquid con- Quoting IRI data for the 52 weeks ended 3 Available in France and the UK, Goldshield’s new taining glucosamine; and a topical gel contain- October 2009, Bayer said Canesten was the number Flexeze Fortify joint-health supplement is described one brand in the thrush treatment market with a 76% by the company as “the next step up from traditional ing glucosamine. share of value sales in pharmacy. glucosamine-based products” OTC OTC

20 January 2010 OTC bulletin 15 OTC20-01-10p16-17FIN.qxd 15/1/10 13:17 Page 2

OTC MARKETING NEWS Pharmacists rate NiQuitin and Benylin

NiQuitin and Benylin are the star performers in the latest rankings for Pharmacy viewpoint – our monthly survey of UK pharmacists’ attitudes to OTC sales and marketing, which is published exclusively in OTC bulletin courtesy of the Intr@PharmQ service from IMS.

wo brands dominated our closing Pharm- A full-page advertisement for NiQuitin 4mg Tacy viewpoint survey of 2009. GlaxoSmith- Minis – created by the agency TBWA/Paling Kline Consumer Healthcare’s NiQuitin notched Walters – points out that the lozenges provide up three wins and a second place, as the com- fast craving relief within minutes. It also states

pany alerted pharmacy staff to the introduc- that the product is “designed especially for those McNeil Products’ memorable launch television tion of the Minis line extension. Meanwhile, smokers who know they should quit, but want commercial for Benylin Mucus Cough – which McNeil Products’ Benylin achieved one top to do it at their own pace”. portrays mucus as a green character that clings to the chest – leads the television rankings for the spot and a second position thanks to the firm’s As well as highlighting the efficacy of Ni- second month in a row memorable launch campaign for the Mucus Quitin Minis, the advertisement draws atten- Cough variants. tion to the “discreet and portable” product pack- (OTC bulletin,16 October 2009, page 16). In the trade-press advertising part of Phar- aging with an actual-size picture. The pack- Current trade-press advertising for Emla fea- macy viewpoint,NiQuitin had a small lead over aging also features prominently on the front tures the new OTC packaging, which carries Benylin. When IMS Consumer Health survey- cover of a sales aid, on a leave-piece and on the strapline “All you need for a less painful ed UK pharmacists between 1 and 17 Decem- a direct mailing. needle experience”. The pharmacy-only medi- ber 2009 using its Intr@PharmQ service, 13% One interesting development in the trade- cine’s formulation remains the same – 2.5% said the nicotine-replacement therapy was back- press advertising section was the sixth place for w/w lidocaine and 2.5% w/w prilocaine – but ed by the best current trade-press advertising AstraZeneca’s Emla local anaesthetic cream. packs now contain two occlusive dressings as for an OTC medicine or dietary supplement The company recently relaunched Emla in the well as the cream. (see Figure 1). Most of these pharmacists specif- UK with a new pharmacy campaign, fresh pub- In the television-advertising section of Phar- ically mentioned the Minis product. lic relations activity,and revamped packaging macy viewpoint,NiQuitin had to settle for second place behind Benylin. As can be seen from Figure 2, one in five pharmacists surveyed in BEST CURRENT REPRESENTATIVE DETAILING December said the cough medicine was backed Rank Brand Company Product type Pharmacists (%) by the best current television advertising. It is 1NiQuitin GlaxoSmithKline Smoking-cessation aid 10 the second month in a row that Benylin has captured the top spot. 2Lemsip Reckitt Benckiser Cough/cold remedy 9 This winter,McNeil has boosted Benylin 3Gaviscon Reckitt Benckiser Indigestion remedy 5 with two formulations that are claimed to thin 4Alli GlaxoSmithKlineWeight-loss medicine 4 and loosen chest mucus (OTC bulletin,30 Nov- ember 2009, page 16). 5= Beechams GlaxoSmithKline Cough/cold remedy 3 Benylin Mucus Cough is a red syrup con- Benylin McNeil Products Cough/cold remedy 3 taining 100mg guaifenesin and 1.1mg levo- HealthAid HealthAid Food supplement 3 menthol per 5ml. The general-sale list medi- Nicotinell Novartis Smoking-cessation aid 3 cine has a recommended retail selling price of Base: 100 pharmacists who named a brand of OTCmedicine or food supplement £4.99 (C5.55) for a 150ml bottle of the syrup. Benylin Mucus Cough Night is a red syrup Figure 4: Unprompted response of UK pharmacists between 1 December and 17 December 2009 when they were asked the question: “In your opinion, which OTC medicine/dietary supplement is currently backed by the containing 100mg guaifenesin, 1.1mg levomen- best representative detailing?” (Source – OTC bulletin/IMS’ Intr@PharmQ service) thol and 14mg diphenhydramine per 5ml. A Intr@PharmQ and Pharmacy viewpoint

harmacy viewpoint is a monthly survey reflecting their general feelings about partic- The service can be used to ask pharmacists Pof pharmacy attitudes to OTC marketing ular OTC brands. about a range of subjects including products, in the UK, which appears exclusively in OTC Intr@PharmQ is a rapid information-gath- company image and representatives. OTC bulletin courtesy of the Intr@PharmQ service ering service consisting of web-based interac- from IMS. tive questionnaires on the Intr@Pharm com- ■ For further information contact Tai Azeez, IMS, 7 The survey highlights pharmacists’ attitudes munity pharmacy portal. Questionnaires can Harewood Avenue, London NW1 6JB, UK (Tel: +44 to OTC marketing campaigns – both as health- be set up on the site quickly,and responses col- 20 3075 4142; Fax: +44 20 7393 5900; E-mail: TAzeez care professionals and consumers – as well as lated within days. @uk.imshealth.com).

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MARKETING NEWS OTC PHARMACY viewpoint

BEST CURRENT TRADE-PRESS ADVERTISING Rank Brand Company Product type Pharmacists (%) 1NiQuitin GlaxoSmithKline Smoking-cessation aid 13 2Benylin McNeil Products Cough/cold remedy 11 3= Alli GlaxoSmithKline Weight-loss medicine 6 Calpol* McNeil Products Children’s analgesic 6 Covonia Thornton & Ross Cough/cold remedy 6 6= Emla AstraZenecaLocal anaesthetic cream 4 Nicorette McNeil Products Smoking-cessation aid 4 Vicks Procter & Gamble Cough/cold remedy 4 9= Nurofen Reckitt Benckiser Oral/topical analgesic 3 Transvasin Thornton & Ross Topical pain relief 3 Wellman Vitabiotics Food supplement 3

Base: 100 pharmacists who named a brand of OTCmedicine or food supplement GlaxoSmithKline Consumer Healthcare’s advertising * Includes Calcold, Calpol and Calprofen for NiQuitin is top in the trade-press section Figure 1: Unprompted response of UK pharmacists between 1 December and 17 December 2009 when they pharmacy medicine, it comes in a 150ml pack were asked the question: “In your opinion, what is the best current trade-press advertisement for an OTC retailing at £4.99. medicine/dietary supplement?” (Source – OTC bulletin/IMS’ Intr@PharmQ service) McNeil is backing Benylin Mucus Cough and Benylin Mucus Cough Night with an ad- BEST CURRENT TELEVISION ADVERTISING vertising spend in excess of £5 million, includ- Rank Brand Company Product type Pharmacists (%) ing extensive television air-time. 1Benylin McNeil Products Cough/cold remedy 20 Created by the agency JWT,the television 2NiQuitin GlaxoSmithKline Smoking-cessation aid 11 commercial for Benylin Mucus Cough portrays mucus as a green character dressed as a 3Gaviscon Reckitt Benckiser Indigestion remedy 8 wrestler. It opens with a shot of a man asleep. 4= Covonia Thornton & Ross Cough/cold remedy 7 He is woken up by the green character,which Lemsip Reckitt Benckiser Cough/cold remedy 7 wrestles him to the floor and clings to his chest. 6Beechams GlaxoSmithKline Cough/cold remedy 6 However, the man struggles to his bathroom cabinet, takes Benylin Mucus Cough, and the 7Alli GlaxoSmithKlineWeight-loss medicine 5 green character loses its strength. “Get it off 8Nurofen Reckitt Benckiser Oral/topical analgesic 3 your chest with Benylin,”is the sign-off. In the sections for best current pharmacy- Base: 100 pharmacists who named a brand of OTCmedicine or food supplement support package and best current representa- Figure 2: Unprompted response of UK pharmacists between 1 December and 17 December 2009 when they tive detailing, NiQuitin came top (see Figures were asked the question: “In your opinion, what is the best current television consumer advertisement for an 3 and 4). The majority of pharmacists voting OTC medicine/dietary supplement?” (Source – OTC bulletin/IMS’ Intr@PharmQ service) for NiQuitin mentioned the Minis variant. BEST CURRENT PHARMACY-SUPPORT PACKAGE Rank Brand Company Product type Pharmacists (%) 1NiQuitin GlaxoSmithKline Smoking-cessation aid 14 2Alli GlaxoSmithKlineWeight-loss medicine 12 3Lemsip Reckitt Benckiser Cough/cold remedy 11 4Gaviscon Reckitt Benckiser Indigestion remedy 6 5Benylin McNeil Products Cough/cold remedy 4 6= Beechams GlaxoSmithKline Cough/cold remedy 3 Covonia Thornton & Ross Cough/cold remedy 3 Emla AstraZeneca Local anaesthetic cream 3

Base: 100 pharmacists who named a brand of OTCmedicine or food supplement

Figure 3: Unprompted response of UK pharmacists between 1 December and 17 December 2009 when they AstraZeneca’s relaunch of its Emla local anaesthetic were asked the question: “In your opinion, which OTC medicine/dietary supplement is currently backed by the cream has caught the eye of pharmacists best pharmacy-support package (consumer/trade advertising, bonus deals, profit margin, training, etc)?” OTC (Source – OTC bulletin/IMS’ Intr@PharmQ service)

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OTC MARKETING NEWS

Product Recalls Litigation Dendron recalls German court controls Dentinox in UK use of the suffix ‘akut’ endron has recalled several batches of its DDentinox Teething Gel in the UK due to the presence of very small amounts of the con- ncluding the suffix ‘akut’ in the name of a In the case, the competition body claimed taminant glyoxal. Imedicine in Germany implies that the medi- the non-prescription medicine became effec- The Medicines and Healthcare products cine is effective within an hour,according to tive several hours after it was taken, so the Regulatory Agency (MHRA) stressed that the a Munich regional court. ‘akut’ suffix gave a misleading impression of recall was “precautionary”. “There is current- The court reached the decision in a case acute relief. ly no evidence of harm and no suspected ad- brought by a body dedicated to “honest com- However, the pharmaceutical company in- verse drug reactions have been reported,”said petition” against a pharmaceutical company sisted that its product could alleviate symp- the MHRA. that used the ‘akut’ suffix for a non-prescrip- toms within an hour of being taken. Further- The regulatory body noted that glyoxal was tion heartburn remedy. more, the product was effective at the latest an organic compound that occurred naturally, Earlier this year,Hexal launched 20mg ome- within one-and-a-half to three hours of hav- and was found in the environment and some prazole capsules under the Omep Akut brand ing been taken. foods at very low levels. name following a switch of the active ingredi- Judges at the Landgericht München found OTC ent from prescription-to-non-prescription sta- the competition body’s arguments more per- tus (OTC bulletin,31 August 2009, page 21). suasive. Consumers targeted by advertising for Product Recalls The generics specialist continued to sell the OTC heartburn medicine would be led to Omep Akut even after litigation over its suf- believe through the ‘akut’ suffix that the rem- DayQuil LiquiCaps fix was initiated (OTC bulletin,30 October edy offered rapid relief, they ruled. Such rapid 2009, page 12). However, Hexal has now drop- relief, they said, would require an onset of act- recalled in the US ped the ‘akut’ suffix and is marketing its non- ion within 20 to 60 minutes. prescription omeprazole capsules under the No more information on the court case was packaging problem has forced Procter & Omep brand name. available as OTC bulletin went to press. AGamble to recall Vicks DayQuil Cold & OTC Flu 24-Count LiquiCaps in the US. Procter & Gamble said the product did not have a child-resistant backing for the blister packs in the box, despite label statements that it was supplied in child-resistant packaging. “The lack of child-resistant packaging means it is possible that a child could gain access to the medicine,”added the company. However, Procter & Gamble stressed that “no accidental ingestion by children” had been reported. No other DayQuil or Vicks products are af- fected by the recall. OTC

IN BRIEF ■ LLOYDSPHARMACY in the UK is pilot- ing a weight-management service in 20 of its pharmacies in Scotland. As the name suggests, the Lloydspharmacy Tailored Weight Loss Sol- utions service provides a personalised weight- loss programme. Customers would be given Two liquid products for controlling mucus are the latest additions to Procter & Gamble’s Vicks brand in the US. a free consultation in a private room, said the Vicks DayQuil Mucus Control and Vicks DayQuil Mucus Control DM both contain 200mg of the expectorant guaifenesin in each 15ml tablespoon. The DM version also provides 10mg of the cough suppressant retailer,adding that weight-loss experts would dextromethorphan hydrobromide. take height and weight measurements, calcu- DayQuil Mucus Control is claimed to “help loosen phlegm from your bronchial passageways to help you late the body-mass index and discuss the most breathe easier”, while the DM version is formulated “for temporary cough relief and to help loosen phlegm from your bronchial passageways”. Both products work for four hours. appropriate weight-loss solution based on the The products are available in a choice of 6 fl oz or 10 fl oz bottles with an average retail selling price of individual’s goals. US$6.49-US$7.29 (C 4.49-C 5.00). OTC OTC

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EVENTS OTC

FEBRUARY 23 February centralised and national variations MAY ■ Marketing Authorisation to marketing authorisations with 10 February in the European Union emphasis on the UK and Ireland. 18-19 May ■ Basics of Bonn, Germany Contact: Management Forum, ■ Regulatory Affairs Regulatory Affairs Topics to be covered at this one- 98-100 Maybury Road, Woking, in Africa London, UK day meeting include variations and Surrey GU21 5JL, UK. London, UK A one-day course organised by The the centralised procedure. Tel: +44 1483 730071. This two-day event will focus on Organisation for Professionals in Contact:Forum Institut für Fax: +44 1483 730008. pharmaceutical regulatory affairs Regulatory Affairs (TOPRA). Management, Postfach 10 50 60, E-mail: registrations@management- in Africa, including South Africa. Contact:TOPRA, Bellerive House, 69040 Heidelberg, Germany. forum.co.uk. Contact: Management Forum, 3 Muirfield Crescent, Tel: +49 6221 500 680. Website: www.management- 98-100 Maybury Road, Woking, London E14 9SZ, UK. Fax: +49 6221 500 555. forum.co.uk. Surrey GU21 5JL, UK. Tel: +44 20 7510 2560. E-mail: [email protected]. 8-10 March Tel: +44 1483 730071. Fax: +44 20 7537 2003. Website: www.forum-institut.com. Fax: +44 1483 730008. ■ DIA Annual EuroMeeting E-mail: [email protected]. E-mail: registrations@management- Larvotto, Monaco Website: www.topra.org. MARCH ‘ The challenges of switching from forum.co.uk. Website: www.management- 11 February 1 March prescription to non-prescription sta- forum.co.uk. ■ The Pharma Summit ■ Marketing Authorisation tus through the centralised proced- London, UK in the CIS countries ure’ is one of 13 themes at the an- 18-20 May nual EuroMeeting of the Drug In- Ornella Barra from Alliance Boots, Berlin, Germany ■ Vitafoods formation Association (DIA). David Brennan from AstraZeneca, This one-day meeting will cover Geneva, Switzerland Contact:DIA, and Jeff George from Sandoz will Belarus, Kazakhstan, Russia, the A three-day exhibition and confer- Elisabethenanlage 25, Postfach, be three of the speakers at this one- Ukraine and other CIS countries. ence focusing on nutraceuticals, 4002 Basel, Switzerland. day conference. Contact:Forum Institut für cosmeceuticals, functional foods Tel: +41 61 225 5151. Contact:Economist Conferences, Management, Postfach 10 50 60, and functional drinks. Fax: +41 61 225 5152. 26 Red Lion Square, 69040 Heidelberg, Germany. Contact: IIR Exhibitions, E-mail: [email protected]. London WC1R 4HQ, UK. Tel: +49 6221 500 680. 5th Floor,29 Bressenden Place, Website: www.diahome.org. Tel: +44 20 7576 8118. Fax: +49 6221 500 555. London SW1E 5EW,UK. Fax: +44 20 7576 8472. E-mail: [email protected]. Tel: +44 20 7017 7026. E-mail: weurope_customerservice@ Website: www.forum-institut.com. APRIL Fax: +44 20 7017 7818. economist.com. E-mail: [email protected]. 16 April Website: www.economistconferences. 1-2 March Website: www.vitafoods.eu.com. ■ Medicines Variations co.uk. ■ EuroPLX 42 Valletta, Malta Regulation 30-31 May 18-19 February A two-day partnering and licens- London, UK ■ Pharmaceutical ■ CIS Pharmaceutical ing forum focusing on OTC med- This one-day conference is organ- Regulatory Affairs Forum icines, nutraceuticals, branded pre- ised by the UK’s Medicines and in the Middle East Moscow, Russia scription drugs and generics. Healthcare products Regulatory Dubai, United Arab Emirates This two-day conference will look Contact:RauCon, Kurfürstenstrasse 1A, Agency (MHRA). Regulatory activities in Bahrain, at the pharmaceutical markets in 69234 Dielheim, Germany. Contact:Conferences and Kuwait, Saudi Arabia and other Armenia,Belarus, Georgia, Kaz- Tel: +49 6222 9807 0. Learning Centre, MHRA, countries in the Middle East will akhstan, Russia, the Ukraine and Fax: +49 6222 9807 77. 16th Floor,Market Towers, be discussed at this two-day event. other CIS countries. E-mail: [email protected]. 1 Nine Elms Lane, Contact: Management Forum, Contact:Adam Smith Conferences, Website: www.raucon.com. London SW8 5NQ, UK. 98-100 Maybury Road, Woking, 6th Floor,29 Bressenden Place, Tel: +44 20 7084 2903. Surrey GU21 5JL, UK. London SW1E 5DR, UK. 2 March Fax: +44 20 7084 3522. Tel: +44 1483 730071. Tel: +44 20 7017 7444. ■ Variations Regulation E-mail: [email protected]. Fax: +44 1483 730008. Fax: +44 20 7017 7447. Cologne, Germany Website: www.mhra.gov.uk. E-mail: registrations@management- E-mail: events@adamsmith Peter Bachmann and Susanne Win- forum.co.uk. 19, 20-21 & 22 April conferences.com. terscheid from the German federal Website: www.management- Regulatory Affairs in Website: www.cispharmaforum.com. institute for drugs and medical de- ■ forum.co.uk. vices, BfArM will speak at this one- Central and Eastern 22 February day conference. Europe JUNE ■ The Borderline Between Contact:Forum Institut für Budapest, Hungary Cosmetics and Drugs Management, Postfach 10 50 60, A pre-conference symposium en- 9-11 June London, UK 69040 Heidelberg, Germany. titled ‘Regulatory affairs in the ■ 46th AESGP This one-day conference will be Tel: +49 6221 500 680. CIS region’ and a post-conference Annual Meeting chaired by Ronald Marks. Fax: +49 6221 500 555. workshop on ‘Practical application Dubrovnik, Croatia Contact: Management Forum, E-mail: [email protected]. of pharmacovigilance in regula- Annual Meeting of the Associa- 98-100 Maybury Road, Woking, Website: www.forum-institut.com. tory affairs’ will accompany this tion of the European Self-Medi- Surrey GU21 5JL, UK. two-day meeting. cation Industry,the AESGP. Tel: +44 1483 730071. 4 March Contact:Informa UK, PO Box 406, Contact: AESGP,7Avenue de Tervuren, Fax: +44 1483 730008. ■ Variations to Marketing Byfleet KT14 6WL, UK. 1040 Brussels, Belgium. E-mail: registrations@management- Authorisations Tel: +44 20 7017 7481. Tel: +32 2 735 51 30. forum.co.uk. London, UK Fax: +44 20 7017 7823. Fax: +32 2 735 52 22. Website: www.management- A one-day conference focusing on E-mail: [email protected]. E-mail: [email protected]. forum.co.uk. mutual recognition, decentralised, Website: www.informa-ls.com. Website: www.aesgp.be.

20 January 2010 OTC bulletin 19 OTC20-01-10p20-23.qxd 18/1/10 08:09 Page 2

OTC COMPANIES Sanofi-Aventis reshapes its OTC business

2009 saw Sanofi-Aventis set about transforming its OTC business into a make a big difference to Sanofi-Aventis’ OTC global operation through local acquisitions, including most recently business. Acquiring Chattem will create the world’s fifth-largest consumer healthcare com- Chattem in the US. Deborah Wilkes reports on the strategy. pany with sales of around C1.7 billion, says Viehbacher,adding that switching Allegra has anofi-Aventis probably has one bacher,and major OTC players have expressed the potential to move the business up the rank- of the most interesting port- an interest in switching the allergy remedy on ings “pretty significantly”. folios of prescription-to-OTC behalf of Sanofi-Aventis. The news that Sanofi-Aventis had agreed to “Sswitch candidates in the busi- “However, if you do this with someone else, acquire Chattem came at the end of a year that ness,”according to Chris Viehbacher,chief ex- then you play a completely passive role,”he saw the French pharmaceutical firm set about ecutive officer of the French pharmaceutical comments. “That would not allow us to build transforming its existing OTC business into a company. But before making a move for Chat- an OTC presence in the US, and we would be global operation through local acquisitions. tem, it lacked access to the OTC market offer- giving away a significant chunk of profit to the The first sign that the OTC business was ing the largest potential to exploit the opportu- other company.” moving up the agenda at Sanofi-Aventis came nity,namely the US. Viehbacher explains that Sanofi-Aventis de- in 2008. In July of that year,the company ag- Noting that innovation is hard to come by cided to look around for a company that had the reed to buy Symbion Health’s consumer health- in the OTC market, Viehbacher maintains that skills and competency to help it launch an OTC care business from Australia’s Primary Health the growth and dynamism of the US OTC mar- version of Allegra itself. “We found Chattem,” Care for A$560 million (C360 million). The ac- ket is driven by switches. Schering-Plough’s he says, adding: “We believe our ability to con- quired business had sales of A$190 million in Claritin, Procter & Gamble’s Prilosec OTC and vert prescription medicines to OTC products 2007 (OTC bulletin,31 July 2008, page 1). Johnson & Johnson’s Zyrtec have all brought will be enhanced by Chattem’s leading sales, The deal gave Sanofi-Aventis a portfolio of “electric” growth, he observes. marketing and distribution channels.” nutraceutical and OTC brands in Australia and Successfully launching an OTC version of New Zealand, including the Bio-organics, Cen- Switch pipeline at Sanofi-Aventis Allegra in the US will not be easy. Key com- ovis, Golden Glow, Microgenics and Nature’s The switch pipeline at Sanofi-Aventis in- petitors, such as Claritin and Zyrtec, are al- Own brands, and a share of around a fifth of the cludes the acne medicine BenzaClin (clindamy- ready well-established in the OTCmarket for Australian consumer healthcare market. San- cin/benzoyl peroxide), the corticosteroid Nasa- allergy medicines. Furthermore, Allegra already ofi-Aventis said the deal would provide “a plat- cort (triamcinolone), and the antifungal Penlac faces generic competition in the prescription form to launch a nutraceutical offering through- (ciclopirox), says Viehbacher. But switching the sector,and store-brand players will be keen to out the Asia-Pacific region”. antihistamine Allegra (fexofenadine hydrochlo- capitalise on the OTCopportunity. At the start of 2009, the OTC industry was ride) in the US is the priority,he adds. Hanspeter Spek, president of global oper- waiting to see how Sanofi-Aventis would de- Viehbacher points out that the opportunity ations at Sanofi-Aventis, says Allegra has one velop under the leadership of Viehbacher,who to switch Allegra in the US is the driving force of the best safety and efficacy profiles in the had taken over as chief executive officer on 1 behind Sanofi-Aventis’ proposed US$1.9 bil- antihistamine category. There were around 23 December 2008. Despite being one of the top lion (C1.3 billion) purchase of Chattem, whose million prescriptions in total for fexofenadine 10 global OTCplayers, Sanofi-Aventis was a board’s approval for the move was announced – including generics – in the US in 2008, he sleeping OTCgiant with a low profile (OTC on 21 December (see front cover). Although the says, of which more than five million were for bulletin,29 January 2009, page 24). existing OTC business at Sanofi-Aventis is rank- the Allegra brand. The industry did not have to wait long. In ed number six in the world, it has no direct pre- Viehbacher,meanwhile, stresses that there February,Sanofi-Aventis said it intended to dou- sence in the US. is “significant brand awareness” of Allegra in ble the size of its OTC business to around C3 Allegra is a well-recognised brand with both the US, despite the generic competition. billion within the next five years through acqui- physicians and consumers in the US, says Vieh- A successful US switch of Allegra would sitions and geographic expansion. The company added that it expected to see repeated op-

Prescription portunities to acquire OTC businesses with sales drugs Others of around C100 million over the next five years 83.2% (OTC bulletin,27 February 2009, page 1). At the time, Viehbacher acknowledged that Sanofi-Aventis was “clearly not a serious OTC player” in the way its global ranking would sug- gest. Nobody oversaw the OTC business as a Generics Lactacyd whole, he said, and it was run “as a kind of pro- 1.3% Maalox Doliprane OTC duct portfolio” within individual countries. 5.1% No-Spa Essentiale Developing the OTC business is part of Vieh- Vaccines Enterogermina bacher’s strategy to transform Sanofi-Aventis 10.4% Probiotics into a “diversified global healthcare leader”.

Figure 1: Sanofi-Aventis’ sales in 2008 – C27.6 billion Figure 2: Sanofi-Aventis’ OTC sales in 2008 – C1.42 The OTC business is one of the company’s five – broken down by business (Source – Sanofi-Aventis) billion –by brand (Source – Sanofi-Aventis) key growth drivers together with diabetes prod-

20 OTC bulletin 20 January 2010 OTC20-01-10p20-23.qxd 18/1/10 08:09 Page 3

COMPANIES OTC

Essentiale, Enterogermina Probiotics, Lactacyd, managing and growing brands.” Maalox and No Spa – grew by 14.1% on a com- “Sanofi-Aventis’ commitment to preserving parable basis to around C623 million in 2008. our corporate culture and investing in the busi- Over the past 15 months, Sanofi-Aventis has ness and our community demonstrates a clear made four local OTC acquisitions. In addition understanding of the qualities that have enabled to Symbion, which was completed on 1 Sept- Chattem to succeed for five generations,”con- ember 2008, the company has snapped up Gra- tinued Guerry. mon in Argentina, Kernpharm in the Nether- The two companies expect that the trans- lands, and Oenobiol in France (OTC bulletin, action, which has been unanimously approved 16 November 2009, page 1). by Chattem’s board, will close during the first Described by Sanofi-Aventis as the French quarter of 2010. leader for nutritional, health and beauty sup- Chattem’s sales were up by 7% to US$455 plements, Oenobiol has annual sales of C57.2 million in the year ended 30 November 2008. million. Around 85% of this figure is generated Around 93% of sales were generated in the US in France, with the rest coming mostly from (OTC bulletin,12 February 2009, page 2). Belgium, Italy,Poland, Portugal and Spain. Spek is keen to point out that Chattem has In addition, the OTC business has also been had a compound annual growth rate (CAGR) Chris Viehbacher, chief executive officer of boosted by the acquisition of a number of gen- of 12.3% between 2004 and 2009. Turnover in Sanofi-Aventis, says the Chattem deal will give erics companies. During 2009, Sanofi-Aventis 2007 was boosted by the acquisition of five OTC Sanofi-Aventis’ OTC business a global presence but it will still be a collection of regional businesses expanded its generics operation by buying the brands from Johnson & Johnson and Pfizer. Czech firm Zentiva – which had substantial ucts, emerging markets, new products and vac- OTCinterests in central and eastern Europe – Well-concentrated portfolio of brands cines. It is also one of the five pillars of Sanofi- Mexico’s Laboratorios Kendrick and Brazil’s He also draws attention to the fact that Chat- Aventis’ diversified healthcare business model, Medley (OTC bulletin,17 April 2009, page 7). tem is the largest “pure-play company in the which will reduce the company’s dependence Another interesting development was the US consumer healthcare market”. Spek says on blockbuster prescription drugs and patents. firm’s agreement to set up a joint-venture com- Chattem has a “well-concentrated portfolio of The other four pillars are animal health, gener- pany with Minsheng Pharmaceutical Group to 26 brands, of which six are billed as core”. The ics, prescription medicines and vaccines. produce vitamin and mineral supplements for top six brands – ACT, Cortizone-10, Gold Bond, Announcing the Chattem deal, Viehbacher the Chinese OTC market. Sanofi-Aventis said Icy Hot, Selsun Blue and Unisom – generate stresses that “consumer healthcare is a strate- the initiative would give it access to one of the 70% of sales, he adds, and are market leaders gic opportunity”. “It offers prospects for sus- largest categories in the Chinese OTC market in their respective categories across food, drug tainable growth and helps offset the more vol- worth approximately US$10 billion last year and mass merchandisers. atile nature of the prescription drugs market,” (OTC bulletin,30 October 2009, page 10). As Figure 3 shows, medicated skincare is he comments. “Bringing Chattem into the San- Acquisitions helped drive up OTC sales at the biggest category for Chattem, accounting ofi-Aventis family is absolutely consistent with Sanofi-Aventis by 18.7% to C356 million in the for 33.4% of sales in the nine month ended 31 our strategy.” third quarter of 2009. At constant exchange rates, August 2009. Its key brands in the category growth was even faster at 26.3% (OTC bulletin, are Gold Bond,Cortizone-10 and Balmex. External growth opportunities 16 November 2009, page 2). Viehbacher describes Chattem’s operating Outlining the external growth opportunities, Viehbacher notes that at the end of the first margin of 34.7% in the first nine months of Viehbacher points out that the global OTC mar- nine months of 2009 Sanofi-Aventis’ OTC busi- 2009 as “best-in-class”. “Chattem has a very ket is highly-fragmented. “The top 10 compa- ness had a strong presence in six local markets unique system of rotational promotional per- nies represent only around a third of sales, and – Australia,Brazil, France, Italy,Mexico and formance, and the team has been able to fig- there are few really global players,”he says, Russia – which accounted for 77.4% of OTC ure out how to turn on and off the promotion adding that “although there are a number of sales. But the company had “no direct presence ■ Continued on page 22 global brands, the majority of the business is in the all-important US consumer healthcare driven regionally”. market”, he adds. Topical According to Viehbacher,there are opportu- If Sanofi-Aventis’ tender offer is successful, pain care Oral care nities for “local or category acquisitions”. “You Chattem will become the US consumer health- 20.5% 15.2% have to look carefully for them, and you have care division of Sanofi-Aventis. The corporate Internal OTC 9.7% to be very vigilant,”he says, “but there are op- brand of Chattem will be maintained,the com- Medicated portunities for companies like Sanofi-Aventis.” pany will continue to be led by the current man- dandruff Sanofi-Aventis is building on an OTC busi- agement, and its headquarters will remain in shampoos ness with sales up by 5.3% to C1.42 billion in Chattanooga, Tennessee. Sanofi-Aventis said 7.4% 2008 (OTC bulletin,27 February 2009, page it was committed to Chattem’s “current oper- International 5.0% 2). OTC sales accounted for 5.1% of total turn- ations and entrepreneurial spirit”. Other OTC over at the group (see Figure 1). Sanofi-Aventis said it would retain both of Medicated skincare 4.5% Dietary Five countries – Brazil, France, Italy,Mex- Chattem’s manufacturing facilities and would 33.4% supplements ico and Russia – were responsible for almost continue constructing a third. 4.2% two-thirds of the annual OTC total. And 44% Zan Guerry,chairman and chief executive Figure 3: Chattem’s sales in the nine months ended of OTC sales came from six flagship brands officer of Chattem, commented: “We bring a 31 August 2009 – US$353 million – broken down by (see Figure 2). Sales of these six – Doliprane, lot to the table with our 130-year history of category (Source – Sanofi-Aventis)

20 January 2010 OTC bulletin 21 OTC20-01-10p20-23.qxd 18/1/10 08:09 Page 4

OTC PEOPLE

■ Continued from page 21 Manufacturers for certain brands without wasting a lot of mon- ey,” he says, adding that the margins are down Sanofi-Aventis recruits Regenauer to “good management”. According to Viehbacher,Chattem is the anofi-Aventis has recruited Hans Regen- Hans Regenauer “ideal platform in the US consumer healthcare Sauer,worldwide head of Boehringer Ingel- market, which represents 25% of the current heim’s Consumer Health Care division, to de- worldwide opportunity”. “Chattem will pro- velop its OTC business. vide a strong platform for switching some of Regenauer takes up the newly-created post Sanofi-Aventis’ medicines from prescription to of vice-president, Consumer Health Care, Eur- non-prescription status in the US,”he adds. ope, and global development at Sanofi-Aven- Discussing the potential to take Chattem’s tis. He reports to Belen Garijo,who is senior products into new countries, Viehbacher says vice-president for European Pharmaceutical op- the focus is likely to be on emerging markets erations at the French company. rather than western Europe. Spek notes that Regenauer moves to Sanofi-Aventis from Canada and Mexico will be early targets. Boehringer Ingelheim, where he was world- It is unlikely that Sanofi-Aventis’ existing wide head of the German company’s Consum- Sanofi-Aventis said further announcements OTC products will be introduced in the US, er Health Care business. Before joining Boeh- regarding appointments at its Consumer Health says Viehbacher,as the launch marketing costs ringer Ingelheim in 1997, Regenauer held var- Care business would be made in the near future. would be prohibitive. But Spek notes that San- ious marketing, sales and general management News of Regenauer’s appointment comes ofi-Aventis will explore potential synergies be- positions at Bayer. soon after Sanofi-Aventis announced it would tween Dermik Laboratories, its US dermatol- Boehringer Ingelheim said Regenauer had enter the US OTC market by acquiring Chat- ogy business, and Chattem. not been replaced, and it was evaluating options. tem for around US$1.9 billion (C1.3 billion). The Chattem deal will give Sanofi-Aventis’ OTC OTC business a global presence, says Vieh- bacher,although he acknowledges that it will Mergers & Acquisitions still be “a collection of regional businesses”. Viehbacher comments that it is “fairly true Sanofi-Aventis to pay US$1.9bn for Chattem in this industry that there is no single transac- ■ Continued from front page The offer price represented a 34% premium tion that you can do to transform the business”. The deal has been unanimously approved on the closing price of Chattem’s shares on 18 Sanofi-Aventis is “slowly and surely” build- by Chattem’s board, and is expected to close December 2009, according to Sanofi-Aventis. ing its five growth platforms,he adds. in the first quarter of 2010. Several law firms have said that they are Another part of the strategy recently fell On 11 January 2010, Sanofi-Aventis launch- investigating whether the offer price is fair. into place, when Sanofi-Aventis announced on ed a tender offer for all outstanding shares of Sanofi-Aventis said earlier this year that it 8 January that it had recruited Hans Regenauer Chattem at US$93.50 per share in cash, hav- intended to double the size of its OTC busi- – the worldwide head of Boehringer Ingel- ing said in December that it had the support ness to around C3 billion within the next five heim’s Consumer Health Care division – to of Chattem’s board for the move. The tender years through a combination of acquisitions develop its OTC business (see this page). offer runs until midnight on 8 February. and geographic expansion. OTC OTC

22 OTC bulletin 20 January 2010 OTCAd2010:OTC Ad 1_07 5/1/10 14:16 Page 1

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