Glaxosmithkline Aims to Divest Many OTC Brands

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Glaxosmithkline Aims to Divest Many OTC Brands OTC11-02-11p1&28FIN.qxd 8/2/11 11:52 Page 1 11 February 2011 COMPANY NEWS 3 GlaxoSmithKline aims to Valeant expands in CEE 3 with PharmaSwiss deal J&J loses sales of US$1.1bn 4 Boots faces up to tough market 5 divest many OTC brands Key brands boost Novartis OTC sales 6 GSK consumer races ahead 7 laxoSmithKline intends to divest non- to divest the non-core brands as soon as pos- Taisho holds steady in weak market 8 Gcore OTC brands with combined an- sible – hopefully before the end of the year – Vicks shipments lift OTC at P&G 9 nual sales of £500 million (C593 million). depending on buyer interest. Perrigo plans spring Allegra launch 10 Chief executive officer Andrew Witty said The announcement came as GlaxoSmith- Consumer Care grows at Merck & Co 11 the move would enable the company’s Con- Kline reported a 7% rise – 5% at constant ex- Omega reports strong quarter 12 sumer Healthcare division to focus more effec- change rates – in 2010 sales at the Consumer Winter woes hit Boiron 13 tively on its “priority or global” brands as well Healthcare division to £5.01 billion. Sales in Pfizer wants Consumer 14 as its operations in emerging markets. Consumer Healthcare’s OTC Medicines busi- to prove worth A spokesperson for GlaxoSmithKline told ness grew by 5% – 3% at constant exchange OTC bulletin that the company was currently rates – to £2.46 billion. GENERAL NEWS 15 compiling the lists of priority and non-core OTC brands, and hoped to release more details Recent deals with Meda and Valeant Perrigo faces lawsuit over 15 in the second quarter of the year. Non-core OTC Meda has just acquired five brands from its OTC ibuprofen in the US brands in Europe and North America would be GlaxoSmithKline Consumer Healthcare in the MARKETING NEWS 16 the main focus of the initiative,the spokesper- US in two deals worth a total of SEK415 mil- son added, along with certain brands in Aus- lion (C47.2 million) (OTC bulletin,21 January Sanofi-Aventis gets okay 16 tralia, Japan and New Zealand. 2010, page 4). The Swedish company gained for OTC Allegra in the US Explaining the reasons for the move,Witty the Geritol multivitamin, the Feosol iron sup- Meda launches Linicin in UK 17 pointed out that Consumer Healthcare’s prior- plement and another unnamed iron supplement GSK puts body first in new 18 ity or global brands – including Lucozade, Pana- in December,before acquiring the Contac cold Panadol Advance campaign dol and Sensodyne – combined with the divi- and flu line and the Vivarin caffeine supple- Blackmores campaign tells 19 sion’s operations in emerging markets, such as ment in January. The five brands had combin- Australians today’s the day India and China, represented 90% of its sales. ed annual sales of around SEK180 million, McNeil puts £7m behind 22 “The other 10% is essentially a selection of Meda said, and strong profit margins. new Regaine foam in UK about 100 or so fragmented brands, often OTC Meanwhile, Valeant Pharmaceuticals Inter- brands sold in pharmacy, and often only sold national has just agreed to buy all the Cana- FEATURES 24 in one or two countries,”he said, remarking dian and US rights to non-ophthalmic topical Botanicals pose problems 24 that “frankly they are a drag on the growth of formulations of Zovirax from GlaxoSmithKline for regulators this business”. for US$300 million (C221 million). The formu- Witty added that GlaxoSmithKline intended lations are prescription-only in the US. REGULARS Pharmacy viewpoint 20 – Lemsip and Benylin get noticed Coates considers Pfizer set to grab Events – Our regular listing 23 People – Bayer’s Balkema to retire 27 sale of Healthspan Ferrosan business De Vos departs Omega uernsey-based nutrition company Health- fizer is set to expand its Consumer Health- Omega Pharma said its chief operating officer Gspan could be about to change hands. Pcare business by acquiring Ferrosan’s Con- Georges De Vos had left the company by mutual Derek Coates, owner and chief executive sumer Healthcare operation from the private- consent due to “differences in vision”. De Vos departs Omega just 18 months after officer of Healthspan, has appointed the ac- equity group Altor 2003 Fund for an undis- joining the Belgian firm from Novartis (OTC countancy firm Deloitte to “explore the longer- closed amount. bulletin,16 September 2009, page 23). Omega term options with regard to ownership”. Paul Sturman, president of Pfizer Consumer said De Vos’ responsibilities would be taken on Over the past few years, commented Coates, Healthcare, said the Danish business was an by its executive committee until a “new manage- ment structure” had been decided. “several approaches from various companies “excellent strategic fit” that strengthened the ■ Continued on page 27 ■ Continued on page 21 OTC11-02-11p2-3FIN.qxd 8/2/11 11:55 Page 3 COMPANY NEWS OTC Mergers & Acquisitions Business Strategy Valeant expands in CEE Merck might with PharmaSwiss deal sell Consumer erck KGaA has not ruled out selling its aleant Pharmaceuticals International is set eastern Europe – including the Czech Repub- MConsumer Health Care business if it mak- Vto strengthen its position in central and east- lic, Hungary,Poland and Serbia – along with es “economic sense”, according to chief execu- ern Europe (CEE)by acquiring branded gener- operations in Greece and Israel. tive officer Karl-Ludwig Kley. ics and OTC firm PharmaSwiss for C350 million. Established in 2000, PharmaSwiss operates In an interview published in The Financial The price represents approximately 1.9-times primarily as a marketing and distribution part- Times newspaper,Kley said that efforts to dou- PharmaSwiss’ 2010 sales, which Valeant said ner in central and eastern Europe for numerous ble the size of the Consumer Health Care busi- stood at around C180 million. pharmaceutical firms. The company also in-lic- ness over the past three years had been hindered Over the past five years, PharmaSwiss had enses brands from speciality pharmaceutical by high prices of potential acquisitions. “With posted annual sales growth of around 20%, and biotechnology companies, as well as offer- the current pricing environment, I do not see Valeant noted, adding that the company had a ing a portfolio of wholly-owned products in the that we could spend billions to double the busi- presence in 19 countries throughout central and generics and OTC sectors. ness to critical mass on a global scale,”Kley PharmaSwiss’ OTC brands include the Di- commented. cloFlex diclofenac spray – which is also sold Asked whether he would consider selling OTC bulletin under the DoloFlex and SwissRelief names – the Consumer Health Care business, Kley said the MamaVit vitamin and mineral product for he would “never exclude any option” that made 11 February 2011 Number 356 pregnant and nursing women, and the Omega- “economic sense”. Defend food supplement. A spokesperson for Merck KGaA confirm- Editor & Publisher: Deborah Wilkes Michael Pearson, Valeant’s chief executive ed to OTC bulletin that Kley had said divest- Associate Editors: Aidan Fry officer,said PharmaSwiss’ “attractive partner- ment could not be excluded. Kley had not said Mike Rice ing strategy” and “complementary branded ge- the Consumer Health Care business was up for Business Editor: Matt Stewart nerics and OTC portfolio” solidified its position sale, added the spokesperson. Assistant Editors: Joanne Grew, Jenna Lawrence, in central and eastern Europe. In the same interview, however, Kley did rule David Wallace Over time, it was anticipated that Valeant’s out any sale of Merck KGaA’s liquid crystals Advertising Controller: Debi Minal central European business would be integrated operation. into the PharmaSwiss corporate structure, Val- In March 2010, Kley revealed that Merck’s Marketing Manager: Val Davis eant noted, adding that PharmaSwiss’ senior plan to turn its Consumer Heath Care business Editorial, Subscription and Advertising management team would stay with the firm. into “one of the top-10 global OTC players by enquiries should be addressed to: OTC bulletin, OTC Publications Ltd, 54 Creynolds Lane, Solihull, The deal – which is expected to close by the doubling annual sales to C1.0 billion” by 2012 West Midlands B90 4ER, UK. end of the second quarter of 2011 – is Valeant’s (OTC bulletin,29 May 2009, page 20) had been Tel: +44 1564 777550. Fax: +44 1564 777524. first major buy since it completed its merger dealt a blow during 2009 when it missed out E-mail: [email protected]. with Canada’s Biovail in October of last year on two unnamed acquisition targets (OTC bul- Subscriptions (OTC bulletin,15 October 2010, page 3), and letin,17 March 2010, page 1). Annual subscriptions to OTC bulletin in Europe are £625.00 for single copies and £355.00 for additional copies to the same ad- adds to the firm’s European operations, which Merck KGaA’s Consumer Health Care unit dress, including delivery. Subscriptions to addresses outside Eur- are centred on Poland’s ICN Polfa Rezeszow. reported sales up by 6% in 2009 to C467 mil- ope are subject to an additional charge of £30.00 to cover postage. Subscription enquiries in Korea should be directed to Pharma Valeant last expanded its European opera- lion from its portfolio of brands, which includes Koreana Ltd, 14th Floor,KTB Network Building, 826-14 Yeoksam- tions in 2009, firstly by paying US$28 million the Bion and Seven Seas food supplement ranges dong, Kangnam-gu, Seoul 135-080, Korea (Tel: +82 2 554 9591; Fax: +82 2 563 8289; E-mail: [email protected]). (C20 million) for the Polish gel specialist Emo- and the Nasivin nasal decongestant. Advertising Farm (OTC bulletin,15 May 2009, page 9) and OTC Advertising rates and data are available on request from the ad- then by snapping up the rights to several pre- dress above or at www.otc-bulletin.com.
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