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7November 2014
COMPANY NEWS 3 Bayertakes leading spot 3 Sanofi fires Viehbacher in ChinawithDihon deal BoehringersaysnotoOmegabuy 3 GSKhints at Consumer divestments 4 afterfall out with board Merck waves goodbye to 5 Consumer Care business hris Viehbacher,chief executive officer Bayertargets critical mass 6 in Consumer Cof Sanofi, has been firedafter the firm’s board of directors concluded that his “man- Nasacortdrives salesforward 7 at Sanofi agement style was not adequate”. Oriola wantsafairprice 8 In asurprise move,the board of the French for itsRussian operations companyannounced it had “decided unani- BioGaiareports a 9 mously” to remove Viehbacher after six years double-digitsales rise at the helm. Celesioputsfaith in 11 “The group needs to pursue its development new leadership team with amanagement aligning the teams, harness- Pfizer expects Lipitortrialresults 12 ing talent and focusing on execution with aclose in 2015 and confident co-operation with the board,” Sanofistated, adding that its chairman, Serge GENERAL NEWS 13 Weinberg, would takecharge while it search- ed for achief executive. Most Germans have 13 Expanding on the rationale behind the deci- used homoeopathy sion, Weinbergsaid that the board was“strongly Chris Viehbacher has left Sanofi after the board Health Canada approves 16 dissatisfied” with Viehbacher’sability to work Aspirin heart-attack claim criticised his management style with board members to examine the company’s Germans reject OTCguidance 16 strategy “in aconfident manner”. (OTC bulletin,27February 2009, page 1). Australia settooverhaul 17 “The fluidity of the relationship between Acquisitions were central to Viehbacher’s TGAmedicines regulation the chief executive officer and the board was expansion strategy,with the companysnapping MARKETING NEWS 18 inadequate,”herevealed. up Chattem to enter the US OTCmarket in In addition,Viehbacher’sexecution of 2010 (OTC bulletin,20January 2010, page Ricola offerscoldsufferers 18 Sanofi’sstrategy had not been “sufficient”, 1) and adding BMP Sunstone to strengthen its arevitalisingherbal option Weinbergclaimed, noting that the company’s presence in China the same year (OTC bul- OnlineStrepsils campaign 19 fiscal 2013 “had not been very satisfying”. letin,16November 2010, page 1). urgesIndians to speak up Group sales in 2013 had fallen by 5.7% to Under Viehbacher’sleadership, Sanofilifted German companies offer 20 C33.0 billion, he pointed out, with the firm its Consumer Healthcare sales from C1.42 bil- nasal sprays for winter experiencing “significant problems” related to lionin2008 to C3.01 billion in 2013. Omegaintroduces Nasodren 20 its Consumer Healthcarebusiness in China and Weinbergrevealed that discussions among to Spain its Generics business in Brazil. board members overViehbacher’sfuture had Vitabiotics’ commericals 21 Commenting on the problems in China at been ongoing since “the middle of summer”. banned by ASA the time, Sanofisaid the Consumer Healthcare However, the board had not planned on remov- RB launches ‘Junior Notes’app 21 business in the country had been blighted by ing Viehbacher until alater date, he noted. in Austria alack of transparencyinthe distribution chan- “Wehavebeen forced to accelerate the nel (OTC bulletin,21February 2014, page 6). decision because of leaks that came out in the FEATURES 24 The firm admitted that it had no real control press on 26 October,” Weinbergstated. RB plots the future 24 overthe “flowofmargin” between the com- “Wefelt that uncertainty at the head of the of consumer health panyand retailers. firm wasnot good,”heexplained, “so we need- During his six-year tenure, Viehbacher made ed to act rapidly and that is what we have done.” REGULARS Consumer Healthcare one of the company’s Looking ahead, Weinbergsaid that Sanofi’s “growth platforms”. Shortly after he joined the strategy “would remain the same”. “It is busi- Events – Our regularlisting 23 firm, he announced in 2009 that Sanofiintend- ness as usual on all aspects,”headded. People – Rawlinstosucceed Duff 27 ed to double the size of its OTCbusiness to The search for Viehbacher’spermanent re- as chairofUK’sMHRA approximately C3billion within five years ■ Continued on page 27 LI FE VER SA SA VER ME TI
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COMPANY NEWS OTC
Mergers&Acquisitions Mergers&Acquisitions Boehringer says Bayer takesleading spot no to Omega buy in China with Dihon deal oehringer Ingelheim has no interest in ac- Bquiring Omega Pharma, aspokesperson for ayer nowholds aleading position in ingbrands into our growing OTCportfolio,” the German firm has told OTC bulletin. BChina’sOTC market, according to the Brandicourt added, “and to leverage the know- The family-controlled companyhad been company’schief executive officer Marijn Dek- ledge and expertise of our newemployee base linked with amove for Omega,along with San- kers, after completingits CNY3.6 billion (C460 to further growand develop these self-care solu- ofi, store-brand specialist Perrigo and the gener- million) acquisition of privately-owned Dih- tionstothe benefit of consumers across China ics giant Actavis. on Pharmaceutical. and other parts of the world.” Adeal for Omega could be struck before the Announced in March (OTC bulletin, 17 Bayer also believesitcan leverage the herb- end of the year,according to anumber of media March 2014, page 1), the deal givesBayer a als expertise of the German firm Steigerwald reports, with the privately-owned Belgian OTC “portfolio of well-known consumer brands” –which it acquired last year (OTC bulletin, 31 firm expected to fetch around C4billion. and amajor foothold in the country’stradi- May2013, page 1) –and Dihon’sTCM expe- tional Chinese medicines (TCMs) market. rience to bolster its natural-products business. Omega’s sales increase by 40% Dihon’srange of OTCbrands and TCMs Bayer’sConsumer Care operation has a Afocus on increasing organic growth – generated sales of C123 million in 2013, the number of brands in the Chinese OTCmarket, coupled with the companyacquiring abasket of German companynoted, making it a“leading including the analgesic Aspirin, the antifungal GlaxoSmithKline’snon-core brands in Europe player” in China’sOTC market with brands Canesten, the gastrointestinal remedy Talcid (OTC bulletin,16March 2012, page 1) –has such as the Kang Wang dandruff treatment, Pi and the vitamin brand Redoxon. seen Omega’s sales increase by 40% to C1.2 Kang Wang antifungal cream and the TCM In 2008, the companyrelaunched, under billion in the four years ending 31 December brand Dan EFuKang for women’shealth. theBayer name, the White &Black ‘western- 2013 (OTC bulletin,15August 2014, page 4). style’ cough and cold brand it gained by acquir- In the summer,Omega’s chief operating Brands sold outside China ing Chinese firm Topsun (OTC bulletin, 31 officer Christoph Staeuble told OTC bulletin In addition to China, Dihon’sbrands were October 2006, page 3). that the companywas committed to becoming sold in anumber of other markets, Bayer Dekkers pointed out that following Bayer’s the third-largest OTCplayer in Europe with- pointed out, including Cambodia, Myanmar, US$14.2 billion (C11.3 billion) purchase of US- in the next four years. Nigeria and Vietnam. based Merck &Co’sglobal Consumer Care Omega wastaken private by its founder Dr Olivier Brandicourt, chief executive offi- business, the deal for Dihon fitted perfectly with Marc CouckeinFebruary 2012 in adeal which cer of Bayer Healthcare, said Dihon’sman- the company’saim of further growing its Con- valued the company at C870 million (OTC agement team had built a“strong business” with sumer Care business through bolt-on acqui- bulletin,29February 2012, page 11). a“track record of success”. sitions (see page 6). OTC “Weare delighted to bring Dihon’soutstand- OTC
7November 2014 Number 432 Individual subscriptions Te rms &Conditions: These can be viewed in An annual subscription comprises: full at www.OTC-bulletin.com/subscribe. Editor: Matt Stewart ■ 20 OTC bulletin newsletters; No partofthis publication may be copied, Editor-in-Chief: Aidan Fry reproduced, stored in aretrieval system, distributed Production Editor: Jenna Meredith ■ AND at least 45 weekly news@OTCbulletin or transmitted by anymeans, including electronic, Assistant Editors: To mGallen, electronic newsflashes containing the week’s mechanical, photocopying or recording, without Liudmila Kotko, Marie McEvoy top news stories (currentlydelivered by email). the prior written permission of the publisher, or under the terms and conditions of aGlobal Site Contributing Editor: David Wallace Choice of formats Licence or of alicence issued by the Copyright Advertising Controller: Debi Minal The 20 OTC bulletin newsletters are available: Licensing Agency (CLA) in London, UK, or rights Director of Subscriptions:ValDavis ■ EITHER as the digital OTC bulletin-i for bodies in other countries that have reciprocal agreements with the CLA. Group Sales Manager: Anisa Shan online access by desktop,and tablet and Awards Manager: Natalie Cornwell smartphone.Mobile devices can have Apple or Neither maythis publication be exported, Managing Director: Mike Rice distributed or circulated by anymeans without Android operating systems. the prior written permission of the publisher. Editorial enquiries: OTC bulletin, ■ OR in traditional hard-copyprint format, While due care has been taken to ensure the 4Poplar Road, Dorridge,Solihull, delivered by airmail. accuracy of information contained in this West Midlands B93 8DB, UK. publication, the publisher makes no claim that Website: www.OTC-bulletin.com Corporate and multiple subscriptions it is free of errorand disclaims anyliability Te l: +44 (0)1564 777550 Global Site Licences are available to companies. whatsoeverfor anydecisions or actions taken Fax: +44 (0)1564 777524 These provide in-house electronic access for as aresult of its contents. Email: [email protected] staff to OTC bulletin and news@OTCbulletin. ©OTC Publications Ltd. All rights reserved. Please ask foraquotation. OTC bulletin® is registered as atrademark in Advertising enquiries: the European Community. Discounted multiple subscriptions are available to As above,[email protected] ISSN 1742-0784. OTC bulletin-i at the same location. SUBSCRIPTIONS Companyregistered in England No 2765878. Subscription rates are published at Subscription enquiries: Printed by Warwick Printing CompanyLimited, www.OTC-bulletin.com/subscribe. Contact [email protected] Leamington Spa CV31 1QD,UK.
7November 2014 OTC bulletin 3 OTC07-11-14p3-12_Layout 1 04/11/2014 16:33 Page 4
OTC COMPANY NEWS
GSKThird-QuarterResul hintsts at Consumerdivestments
ivesting “parts” or even “whole bits” of Business Third-quarter sales Change 2013/2014 (%) Proportion DGlaxoSmithKline’s(GSK’s) upcoming (£ millions) £CER* of total (%) consumer healthcare joint venture with Novar- tis could be on the cards if those assets “have Oral health 446 -6 +2 42 the potential to create more value” under dif- Wellness 394 -15 -8 37 ferent ownership, according to the firm’schief Nutrition 160 –+415 executive officer AndrewWitty. Skin health 71 -21 -13 6 Speaking as GSK announced its third-quar- Total Consumer Healthcare1,071 -10 -3 100 terresults, Witty said that once the three-part deal with Novartis wascompleted, the company *CER is at constant exchange rates would judge whether assets in anyofits three Figure1:GlaxoSmithKline Consumer Healthcare’s sales in the thirdquarter ended 30 Sepember 2014 broken businesses –Consumer Healthcare, Pharma- down by business (Source –GlaxoSmithKline) ceuticals or Vaccines –“would create more tive viewabout when, if ever,abusiness has letin, 25April 2014, page 1). value with adifferent approach”. the potential to create more value in adiffer- The deal will also see GSK divest its Onc- GSK had a“clear track record” of taking ent structure or with adifferent ownership than ology portfolio to Novartis for US$16 billion “thoughtful and objective decisions” around within the current structure,”Witty insisted. (C2.7 billion) and acquire Novartis’ Vaccines which businesses it wanted to own, Witty noted, However, before possible sales could be business for US$5.25 billion, plus up to US$1.8 highlighting the divestment of its Lucozade considered, it was“key” to get the transaction billion in milestone payments. and Ribena drinks business to Japan’sSuntory with Novartis closed, he noted. After the deal Commenting on the Novartis transaction, last year as good example (OTC bulletin, 27 wascompleted –which is expected to be in Witty said it gave GSK the opportunity to take September 2013, page 1). “I don’tsee us chang- the first half of 2015 –GSK could “move for- “twostrong businesses” –Consumer Health- ing that mindset,”headded. ward”, Witty said. “Then we’ll see what the care and Vaccines –“and really establish them The firm also divested anumber of non-core situation is at that point.” as global leaders”. OTCbrands across Europe, the US and other Witty’sremarks came around six months “The deal will ensure market leadership and regions for net cash proceeds of approximately after GSK announced that its Consumer Health- true global scale for both Consumer Health- £690 million (C875 million) in the first half of care business would assume 63.5% control care and Vaccines,”Witty claimed, “and will 2012 (OTC bulletin, 30April 2012, page 1). of ajoint venture with Novartis that had pro- allowusfor the first time to appropriately re- “Weare taking, and we take, avery objec- forma 2013 sales of £6.5 billion (OTC bul- port on these businesses alongside the Phar- maceuticals division.” Region Third-quarter sales Change 2013/2014 (%) Proportion “When we close the transaction, we will (£ millions) £CER* of total (%) begin to report much more distinctlyConsum- er Healthcare, Pharmaceuticals and Vaccines, Rest of World 559 -7 +1 52 so that you can clearly see the different profiles Europe 310 -12 -5 29 of those businesses and their different character- US 202 -13 -7 19 istics,”Witty added. Total Consumer Healthcare1,071 -10 -3 100 Last month, GSK revealed it had made two senior appointments to the management team *CER is at constant exchange rates of the consumer healthcare joint venture, which Figure2:GlaxoSmithKline Consumer Healthcare’s turnover in the thirdquarter ended 30 September 2014 is to be led by GSK’spresident of Consumer broken down by region (Source –GlaxoSmithKline) Healthcare Emma Walmsley(OTC bulletin, Third quarter Change 2013/2014 (%) Proportion 24 October 2014, page 27). (£ millions) £CER* of total (%) Brian McNamara, currently worldwide head of Novartis OTC, will takeresponsibility for the Coresales Americas and Europe at the combined business. Pharmaceuticals and Vaccines 4,575 -10 -3 81 In addition,Zubair Ahmed, currentlyvice- Consumer Healthcare 1,071 -10 -3 19 president for the Indian subcontinent at GSK Total 5,646 -10 -3 100 Consumer Healthcare, will takecharge of Asia- Pacific, Middle East and Africa. Coreoperating profit Meanwhile, GSK reported Consumer Health- Pharmaceuticals and Vaccines 1,683 -3 ±0 91 care turnoverdownby10% –3%atconstant Consumer Healthcare 174 -18 ±0 9 exchange rates –to£1.07 billion in the third quarter (see Figure 1). Total** 1,887 -6 -1 100 Simon Dingemans, GSK’schief financial *CER is at constant exchange rates ** After corporate and other unallocated costs of £30 million officer, blamed the decline on the “ongoing
Figure3:GlaxoSmithKline’s ‘core’ sales and operating profit in the thirdquarter of 2014. Coreresults impact of supply issues” which had affected exclude amortisation, goodwill, restructuring costs, legal charges and other items (Source –GlaxoSmithKline) the unit since the start of the year.
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COMPANY NEWS OTC
Supply problems had hit sales of the com- Third-QuarterResults pany’ssmoking-cessation products and Alli weight-loss brand, he said, as well as the Bac- Merck waves goodbye to troban skin-care line in China. Despite GSK making “significant progress” in “remediating” these issues, Consumer Health- care’ssales had continued to suffer during the Consumer Carebusiness three months, Dingemans noted. All three of the unit’skey regions –Europe, Rest of World and US –had been impacted by erck &Coreported Consumer Care sales Merck bolstered its OTCportfolio last Sept- the supply issues, he said, and would continue Mdown by 9% to US$401 million (C318 ember when it launched Oxytrol for Women to be affected for the remainder of 2014. million) in the third quarter of 2014, as it began (oxybutynin transdermal system, 3.9mg/day) “Even though we do not expect the business cancelling distribution agreements in prepa- in the US as the “first and only” OTCtreat- to be back in full supply before the end of this ration for the sale of the business to Bayer. ment for overactive bladder. year, wecontinue to expect Consumer Health- During the quarter,Merck had terminated However, its attempt at switching the asthma care to be broadly flat at the top line for 2014 in China anumber of Consumer Care distribu- medicine Singulair (montelukast) –which lost as awhole,”Dingemans added. tionagreements, the firm explained, and revers- its US exclusivity as aprescription medicine The supply issues that hit sales of smoking- ed sales previously made to those distributors. in August 2012 –for use as an OTCallergy cessation products and Alli pushed turnover The restructuring had negatively impacted treatment wasblocked earlier this year over in Consumer Healthcare’sWellness category Consumer Care sales in China, Merck noted. fears that off-label use by asthma patients might down by 15% as reported –8%atconstant ex- The moveswere made ahead of the sale of have lead to adverse outcomes (OTC bulletin, change rates –to£394 million. the business to the German firm for US$14.2 15 August 2014, page 17). billion, which wascompleted on 1October According to members of the US Food and Oral health leads division (OTC bulletin, 10October 2014, page 1). Drug Administration’s(FDA’s) Non-prescrip- Wellness’ poor performance meant Oral Speaking as the deal closed, Merck’schair- tion Drugs Advisory Committee, Singulair’s health maintainedits position as the leading man and chief executive officer,Kenneth Fra- safety as an OTCmedicine for the relief of al- Consumer Healthcaresegment for the third zier, said the proceeds from the sale, in com- lergy symptoms, “considering potential off-label quarter running, despitesales declining by 6% bination with “strong” operating cash flow, use”, had not been adequately demonstrated. as reported to £446 million. At constant ex- gave the firm “greater flexibility to invest in Merck has had apresence in the OTCmar- change rates, sales improvedby2%. opportunitiesthat augment the company’spipe- ketsince 2009 when it acquired US-based Sensodyne turnoverhad risen by 13% at line and product portfolio”. Schering-Plough for US$41 billion (OTC bul- constant exchange rates, GSK noted, offsetting Sales of Consumer Care’sleading brand, letin, 17March 2009, page 1). The deal brought a13% decline in Aquafresh business, which the loratadine-based allergy medicine Claritin, Claritin, Coppertone, Dr Scholl’sand MiraLAX wasdue in part to supply problems. had also been hit by the restructuring in the under the Merck umbrella. Skin health sales, down by 21% –or13% three months, Merck noted, with brand turnover at constant exchange rates –to£71 million, had down by 11% to US$110 million (see Figure 1). Constant speculation been primarily affected by lower turnoverof Consumer Care generated 3.8% of Merck’s However, from the moment the deal was Bactroban in China. total third-quarter sales, which slipped back finalised, Merck had to deal with questions over On aslightly more positive note, Nutrition by 4% to US$10.6 billion in the period. the future of the OTCbusiness. The company turnoverwas flat as reported at £160 million, The companyblamed the decline in group hadtofend offnumerous enquiries that Con- thanks to sales of Horlicks rising by 8%, with turnoveronaloss of US$425 million in sales sumer Care wasfor sale until it put the busi- particularly strong growth in India. At constant due to divestments, and terminating its phar- ness on the block earlier this year. exchange rates, Nutrition sales advanced by 4%. maceuticals joint venture with AstraZeneca. Formanyyears, Merck had only an indirect Constant-currencyshortfalls in European Bayer has gained Merck’sConsumer Care presence in the market through the Johnson and US sales –5%and 7% respectively –had portfolio, which includes arange of brands – &Johnson/Merck Consumer Pharmaceuticals reflected the supply issues, GSK said, highlight- such as Claritin, Coppertone, Dr Scholl’sand joint venture. The business –which ended in ing the 1% growth in Rest of World markets MiraLAX –across anumber of therapeutic 2011 –had aportfolio of OTCbrands in the (see Figure 2). As reported, turnoverinEurope categories including cold, allergy, sinus and US, including Pepcid heartburn remedies. slipped back by 12%, in the US by 13% and flu, dermatology and gastrointestinal. OTC in Rest of World by 7%. Consumer Healthcare contributed 19% of Business Third-quarter sales Change Proportion GSK’score sales that declined by 10% –3%at (US$ millions) 2013/2014 (%) of total (%) constant exchange rates –to£5.65 billion in the Pharmaceutical 9,134 -4 86 third quarter (see Figure 3). Core sales and op- erating profit exclude amortisation, goodwill, Animal Health 885 +11 8 restricting costs, legalcharges and other items. Claritin OTC110 -11 1 Less than 10% of GSK’score operating Consumer Care 401 -9 4 profit came from Consumer Healthcare after Other 137 -56 1 an 18% drop to £174 million. At constantcur- Total Merck &Co10,557 -4 100 rencyrates, the unit’soperating profit wasflat. OTC Figure1:Merck &Co’s sales in the thirdquarter of 2014 broken down by business (Source –Merck &Co)
7November 2014 OTC bulletin 5 OTC07-11-14p3-12_Layout 1 04/11/2014 16:33 Page 6
OTC COMPANY NEWS
BusinessStrategy/Third-QuarterResults Bayertargets critical mass in Consumer
cquiring Merck &Co’sglobal Consumer Business Third-quarter sales Change EBIT Change ACare business has brought Bayer’sOTC (C millions) 2013/2014 (%) (C millions) 2013/2014 (%) operations closer to achieving “critical mass”, butthe companyintends to keep looking for Pharmaceuticals 3,039 +7.8 699 +9.7 opportunitiestofurther growthe business, ac- Consumer Care1,006 +2.2 –– cording to the firm’schief executive officer Medical Care585 -5.5 –– Marijn Dekkers. Animal Health 330 +2.8 –– Speaking as Bayer announced a2.2% rise Consumer Health 1,921 -0.2 338 -8.9 in third-quarter sales at its Consumer Care unit (see Figure 1), Dekkers said that with further Total Bayer HealthCare4,960 +4.6 1,091 +11.6
consolidation in the OTCindustry likely to Figure1:Breakdown of Bayer HealthCare’s sales and earnings beforeinterest and tax (EBIT) in the third come, Bayer would keep akeen eyeondev- quarter of 2014 (Source –Bayer) elopments to see if it wanted to play apart. Consumer Care was“an important part of ober (OTC bulletin, 10October 2014, page 1), increased by 2.2% –orby5.7% when ad- the business and very strategic” for Bayer,Dek- making it the second-biggest OTCplayer in justed for currencyand portfolio effects –to kers insisted, noting that “critical mass in con- theworld, jumping ahead of Johnson &John- C1.01 billion in the third quarter, with all but sumer healthcare” was“important” as success son and falling just short of the upcoming twoofthe business’ six biggest-selling brands in the market depended on “howmanyprod- GlaxoSmithKline and Novartis joint venture reporting arise in turnover. ucts you can offer clients”. (OTC bulletin, 25April 2014, page 1), which Consumer Care’sbest performer wasthe Gaining this critical mass wasone of the will come into effect next year. Aleve range of pain relievers, with sales grow- reasons behind Bayer paying US$14.2 billion At the time of closing, Dekkers said Bayer ing by 15.2% to C91 million (see Figure 2). The (C11.3 billion) for US-based Merck’sOTC, foot- would continue to growConsumer Care both rise had been drivenbythe launch of Aleve care and sun-care business, Dekkers pointed out. organically and with bolt-on acquisitions. PM in the US, Bayer noted, which had taken Bayercompleted the Merck deal on 1Oct- Meanwhile, worldwide Consumer Care sales the analgesics brand into the night-time pain- relief arena (OTC bulletin, 10October 2014, Brand (business unit) Third-quarter sales Change 2013/2014 (%) page 20). Adjusted for currencyeffects, turn- (C millions) C CER* overimprovedby14.2%. Contour (Medical Care) 167 -5.1 -4.7 Sales of Consumer Care’sbiggest brand – Aspirin –increased by 3.4% –6.5% when ad- Aspirin** 122 +3.4 +6.5 justed for currencyeffects –to C122 million Advantage (Animal Health) 120 +1.7 +1.1 in the quarter.The brand had been bolstered Aleve/naproxen 91 +15.2 +14.2 by the launch in Germanyand Italy of anew Bepanthen/Bepanthol84+6.3 +11.7 500mg-size tablet, Bayer noted. Ultravist (Medical Care) 73 -5.2 -2.4 Total Aspirin sales –including Aspirin Car- Canesten 67 +4.7 +8.0 dio, which is part of the Pharmaceuticals divi- Gadovist (Medical Care) 58 +13.7 +12.2 sion–were up 6.0% to C246 million. One-A-Day 39 -11.4 -10.7 Thanks to “considerably higher sales, partic- Supradyn 35 -10.3 -0.7 ularly in emerging markets”, Consumer Care’s Top-10 total 856 +1.3 +3.1 Bepanthen/Bepanthol skin-care line reported turnoverupby6.3% to C84 million. When ad- Consumer Health total 1,921 -0.2 +2.4 justed for currencyeffects, the gain wasan *CER is constant exchange rates ** Total Aspirin sales –including Aspirin Cardio, which is part of the Pharmaceuticals division –were C246 million even stronger 11.7%. Canesten had also performedpositively in Figure2:Sales of the top-10 best-selling brands in Bayer’s Consumer Health division in the thirdquarter of all regions, Bayer noted, with sales rising by 2014. Brands arepartofthe Consumer Carebusiness unit unless stated (Source –Bayer) 4.7% to C67 million. When adjusted for cur- Region Third-quarter sales Change 2013/2014 (%) rencyeffects, the antifungal brand’sturnover ( millions) C CER* had improvedby8.0%. By contrast, Consumer Care’stwo best-sell- Europe 732 ±0.0 +1.2 ing vitamin, mineral and supplement brands North America 592 -4.1 -3.7 (VMS) –Supradyn and One-A-Day –both had Asia/Pacific 300 +6.8 +7.1 adisappointing quarter. Latin America/Africa/Middle East 297 +1.0 +11.6 Turnoverfrom the Supradynbrand had fallen Consumer Health total 1,921 -0.2 +2.4 by 10.3% –0.7% when adjusted for currencyef- fects –to C35 million, Bayer said, while sales *CER is constant exchange rates of One-A-Day had been hit by “lower volumes Figure3:Breakdown of Bayer Consumer Health’s sales in the thirdquarter of 2014 by region (Source –Bayer) in the US” and dropped by 11.4%, or by 10.7%
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COMPANY NEWS OTC
Third-QuarterResults Nasacort drives sales forwardatSanofi
aunching Nasacort Allergy 24HR in the If aswitch wasgiven the go-ahead, Sanofi transfer had added C64 million to the Consum- LUS at the beginning of February helped anticipated marketing Cialis OTCafter the “ex- er Healthcare sales total. Without it, the divi- to drive up Sanofi’sConsumer Healthcare sales piration of certain patents”, the firm noted. sionwould have reported a4.0% constant cur- in the third quarter by 12.9% to C819 million at Total Nasacort OTCsales in the third quar- rencygain. constant exchange rates. ter were C23 million, putting the brand into On aregional basis, more than half of Con- Nasacort Allergy 24HR (triamcinolone ace- seventh place in Sanofi’sroster of Consumer sumer Healthcare’ssales were generated in tonide) had generated C18 million in US sales Healthcare brands (see Figure 1). Emerging Markets, where turnoveradvanced in the three months, the French companypoint- The fexofenadine-based brand Allegra was by 26.2% in constant currencies to C452 ed out, following the prescription-to-OTC switch thebest-selling of Sanofi’sestablished brands, million (see Figure 2). of the product last year. with sales up by 31.7% to C78 million at con- In the US, sales of Nasacort helped to lift The switch of the inhaled corticosteroid was stant exchange rates. turnoverinthe region by 3.3% to C158 million. approvedbythe US Food and Drug Adminis- The company’snine top-selling Consumer Sales in Western Europe remained flat at tration (FDA) in October 2013 to treat “sea- Healthcare brands had total sales of C372 mil- C157 million, while turnoverinthe Rest of sonal and year-round nasal allergies in adults lion in the third quarter, just under half of the World region dropped by 11.9% to C52 million. and children twoyears of age or older” (OTC division’stotal. Consumer Healthcareaccounted for 9.3% bulletin, 25October 2013, page 1). Sanofipointed out that its sales in the three of Sanofi’stotal third-quarter sales, which in- Sanofiposted its third-quarter results just a months had also been boosted by the transfer creased by 5.1% at constant exchange rates to day before the firm announced it had fired chief of products “previously reported in prescription C8.78 billion. executive officer,Chris Viehbacher, after afall pharmaceuticals” in the prior-year period. This OTC out with the board of directors(see front page). Viehbacher had led Sanofifor oversix years. Business Third-quarter sales Change (%) Proportion Following the successful switch of Nasacort (C millions) CER* of sales (%) in the US, Sanofinoted it wasnow gearing up Allegra78+31.7 >1 for the potential switch of Eli Lilly’serectile Doliprane 74 +4.2 >1 dysfunction drug Cialis (tadalafil). Essentiale 53 +46.2 >1 Sanofiacquired in May the rights to switch Enterogermina 48 +53.1 >1 theproduct in Europe, Japan and the US (OTC No Spa 31 +6.3 >1 bulletin, 30May 2014, page 1). Lactacyd 24 -3.7 >1 Commenting on the potential switch recent- Nasacort 23 –>1 ly,Viehbacher said Sanofibelievedthere was Maalox 23 +9.5 >1 an exciting opportunity to open up anew OTC Dorflex18-25.0 >1 category and to drive further strong growth Other Consumer Healthcarebrands 447 +4.1 5 at its OTCfranchise (OTC bulletin, 15Aug- Consumer Healthcare819 +12.9 9 ust 2014, page 2). Diabetes 1,799 +8.3 20 Genzyme 649 +24.6 7 Generics 451 +8.3 5 when currency-adjusted, to C39 million. Oncology/Other Pharmaceutical 3,097 –35 The Consumer Care business accounted for Pharmaceuticals 6,815 +3.4 78 52% of third-quarter turnoveratBayer’sCon- sumer Health division, which dropped by 0.2% Vaccines 1,451 +11.2 17 to C1.92 billion. Sales edged up by 2.4% when Animal Health 515 +12.7 6 adjusted for currencyand portfolio effects. Total Sanofi8,781 +5.1 100 Bayer’stop-10 Consumer Health brands *CER is constant exchange rates formed 45% of total divisional sales, up by 1% from the same period ayear earlier. Figure1:Sanofi’s sales in the thirdquarter of 2014 broken down by business (Source –Sanofi) Europe remained Consumer Health’sbiggest Region Third-quarter sales Change (%) Proportion region in turnoverterms, despite flat sales of (C millions) CER* of sales (%) C732 million (see Figure 3). When adjusted for currencyeffects, turnoveredged up by 1.2%. Emerging Markets 452 +26.2 55 Sales in the Asia/Pacific region grewquick- US 158 +3.3 19 est, rising by 6.8% –7.1% adjusted for currency Western Europe 157 ±0.0 19 effects –to C300 million. Turnoverinthe region Rest of World 52 -11.9 6 is likely to be boosted going forward following Total Consumer Healthcare819 +12.9 100 Bayer’srecent acquisition of Dihon Pharma- ceutical in China (see page 3). *CER is constant exchange rates OTC Figure2:Sanofi’s Consumer Healthcaresales in the thirdquarter of 2014 by region (Source –Sanofi)
7November 2014 OTC bulletin 7 OTC07-11-14p3-12_Layout 1 05/11/2014 09:10 Page 8
OTC COMPANY NEWS
Mergers&Acquisitions/Second-QuarterResults BusinessStrategy/Third-QuarterResults Reddy’s grows Oriolawants afair price with Habitrol forits Russian operations rReddy’sislooking to widen its OTC Dofferings in the US after agreeing to ac- riola KD is not looking to offload its sian wholesaling business in its 2014 second- quire the title and rights to Novartis’ Habitrol ORussian operations at the first opportunity quarter results. (nicotine) smoking-cessation transdermal patch, andwill only sell the businesses to abuyer will- The charge had resulted from a“revised subject to final US Federal Trade Commis- ingtopay a“reasonable price”, according to business plan” developed by the unit’snew sion (FTC) approval. the company’spresident chief executive offi- management team, the firm said, which had cut The Indian generics specialist announced cer Eero Hautaniemi. forecasted growth rates and profitability. thedeal as it reported group sales up by 7% to Speaking as the firm announced its third- Meanwhile, Hautaniemisaid the “weak dev- INR35.9billion (C466 million) in its second quarter results, Hautaniemi said Oriola wascur- elopment” of the company’sRussian wholesale quarter ended 30 September 2014. Turnover in rently investigating whether its Russian phar- business had hit Oriola’ssales and operating North America increased by 8% to INR14.3 bil- maceutical wholesale and retail businesses could profit in the third quarter. be divested “on reasonable terms and at a reasonableprice”. Sales down by 13.6% “If that cannot be achievedwewill continue Oriola posted sales down by 13.6% to C566 to develop the Russian businesses according to million in the period. Operating profit declined our plans,”hepromised. even faster,falling by 47.2% to C4.6 million. Oriola announced last month it wasconsider- Turnoveratthe Russian businesses –includ- ing divesting its Russian operations as it ex- ing both wholesale and retail –dropped back plored its “strategic options” for the businesses by 27.6% to C176 million. (OTC bulletin,24October 2014, page 5). The problems in Russia had been com- The companyrevealed it had appointed a pounded by lower sales at the firm’sSwedish financial advisor to “investigate the conditions” business, Oriola pointed out, with turnover at Habitrol comes with afreesupport programme in the US to help users quit smoking forselling its Russian operations and had already the unit down by 10.9% to C281 million. “conducted negotiations in the matter”. On amore positive note, sales at Oriola’s lion, representing almost half of sales at the The news came after Oriola reported a C77.2 Finland and Baltics business unit advanced by firm’sGlobal Generics unit, which houses its million impairment charge related to its Rus- 13.1% to C109 million in the three months. OTCinterests.Global Generics’ sales advanced OTC by 9% to INR28.9 billion. TurnoverinIndia rose by 14% to INR4.80 Third-QuarterResults billion, while “strong growth” in Venezuela helped almost double the division’ssales in its Boiron cautious over outlook for 2014 Rest of the World region to INR3.55 billion. These gains were partly offset by double- rench homoeopathyspecialist Boiron said Boiron made the statement as it posted sales digit sales falls in Europe, and in Russia and the Fit remained “cautious”regarding its finan- up by 1.5% –3.3% at constant-currencyrates – Commonwealth of Independent States (CIS). cial performance for the year ending 31 Decem- to C172 million in the third quarter of 2014. OTC ber 2014, “giventhe uncertainty of seasonal The majority of the company’sturnover illnesses” in the second half of the year. came from its portfolio of OTCSpecialties. Sales of these products movedforward IN BRIEF Business Third-quarter Change by 3.4% to C99.0 million in the three months ■ PODRAVKA said sales from its portfolio sales (C millions) (%) (see Figure 1). By contrast, turnoverfrom Boiron’snon- of non-prescription brands had improved by France 92.5 -0.1 4.5% in the opening nine months of 2014, as proprietary homoeopathic medicines slipped Europe* 62.8 +2.5 the companycontinued to expand its OTCoffer- back by 0.9% to C73.0 million. North America 13.1 +7.9 ing in anumber of markets. Non-prescription Turning to the company’sgeographic per- Other countries 3.8 +8.6 sales had movedahead to HRK63 million formance, international sales improvedby3.6% International 79.6 +3.6 (C8.21 million) in the period, the Croatian com- to C79.6 million. panypointed out, thanks to “stable growth in Total Boiron 172.1 +1.5 TurnoverinNorth America movedfor- all markets”. Over the nine months, the firm OTCSpecialties 99.0 +3.4 ward by 7.9% to C13.1 million, while sales in had expanded its OTCrange with the Sily- Europe, excluding France, edged up by 2.5% Non-proprietary 73.0 -0.9 marin herbal liverfunction product and the to C62.8 million. Other 0.1 +71.1 Lordiar diarrhoea treatment in Croatia, Pod- Sales in France had slipped back by just ravka noted, and added numerous products *Excluding France 0.1%, Boiron noted, with turnoverdropping to
in other markets. Figure1:Breakdown of Boiron’s sales in the third C92.5 million in the three months. OTC quarter of 2014 (Source –Boiron) OTC
8 OTC bulletin 7November 2014 OTC07-11-14p3-12_Layout 1 04/11/2014 16:33 Page 9
COMPANY NEWS OTC
Nine-MonthResults BioGaia reports adouble-digit sales rise
ioGaia posted sales up by 60% to SEK360 what by falling sales in Ukraine, BioGaia noted, Rothschild noted BioGaia would look to Bmillion (C39.2 million) in the first nine “due to current instability in the country”. takeadvantage of this trend by expanding the months of 2014, as turnoveratits dominant Pae- Turning to its Adult Health business, the geographic distribution of its products. The com- diatrics unit advanced at adouble-digit rate. firm reported turnoveratthe unit down by 10% panywas currently in the “launch process” in Higher Paediatrics sales offset falling turnover to SEK46.4 million in the nine months. anumber of markets worldwide, he noted. at BioGaia’ssmaller Adult Health business. Lower sales of digestive-health tablets in both As part of the company’sexpansion strat- In October last year,BioGaia announced it Finland and Italy had been responsible for the egy, BioGaia signed in June adistribution deal would from 2014 restructure its business into decline, the companysaid. In Finland, BioGaia’s with Swiss firm Pharma Base to takeits pro- aPaediatrics unit and an Adult Health unit. The distribution partner continued to face “aggres- biotic drops into India (OTC bulletin, 27June neworganisation replaces BioGaia’sprevious sive price competition”, the firm explained. 2014, page 3). structure, which divided the business into finish- On amore positive note, BioGaia said sales The deal will see Pharma Base cooperate ed consumer products and component products. of its oral-health tablets had increased, with the with alocal Indian distributor to market and sell BioGaia said it had made the changes in gain primarily attributed to abetter perform- BioGaia’sProTectis baby drops in the Indian order to maintain its “growth momentum” and ance in Japan. state of Maharashtra, including Mumbai. “retain short decision-making paths and entre- The drops will be sold under BioGaia’sown preneurialspirit in the company”. Growth in global probiotics market brand, with the launch scheduled for 2015. The Paediatrics unit includes products such Looking ahead, Peter Rothschild, BioGaia’s Meanwhile, Nestle Nutrition UK has been as ProTectis baby drops and ProTectis Junior chief executive officer, said the growth of the granted the exclusive rights to sell, in the UK digestive-health tablets, while the Adult Health global market for probiotic supplements gave and Ireland, BioGaia’sProTectis baby drops and unit covers brands includingGastrus probiotic the company“good reason for optimism”. ProTectis baby drops with vitamin D. BioGaia tablets and ProDentis lozenges. “The probiotics supplement market is grow- said the launch in both markets wasplanned Meanwhile, BioGaia said aSEK95.4 million ingby8-10% annually, which provides asolid for the start of 2015. payment relatedtothe company’smost recent ground for continued growth,”hepointed out. OTC deal with Nestlé had helped to drive up sales at the Paediatrics unit by 80% to SEK311 mil- lion in the nine months. Signed in March, the agreement will see BioGaia carry out clinical studies and develop newproducts for the Swiss food and drinks giant (OTC bulletin, 28March 2014, page 8). Growth had also been boosted by improved sales of probiotic drops in Brazil, Germany and Mexico, BioGaia said. Sales of digestive-health tablets had also movedforward, the companypointed out, pri- marily in Brazil and the US. However, growth had been held back some-
IN BRIEF ■ AB-BIOTICS –aSpanish biotechnology company–has signed up Sanofitodistribute in Spain its probiotic supplement forchild- ren under the Sanogermina brand name. The French firm would launch the product be- fore the end of 2014, AB-Biotics pointed out, adding that Spain would be the first market in the world where the product would be avail- able. The product had been specially formu- lated to treat gastrointestinal problems in child- ren, the companynoted, claiming that 14 days’ use would reduce daily crying time by 67.5%. AB-Biotics said it planned to roll out the prod- uct in other markets in the near future. OTC
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