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30 May 2011

COMPANY NEWS 3 Japan’s Takeda acquires Stada gets to work on 3 two acquisitions Alliance stands up to 4 tough market Nycomed in C9.6bn deal Atrium Innovations boasts 6 double-digit jump in sales Celesio calls for Lloydspharmacy 7 apan’s Takeda Pharmaceutical will sig- The deal will also create a company with an- change Jnificantly increase its presence in nual consumer healthcare sales of nearly C1.0 Self- sales grow at Krka 7 and emerging markets when it acquires Ny- billion. Nycomed’s portfolio of OTC products Taisho eyes international expansion 8 comed in a C9.6 billion deal, which excludes – including its non-prescription 20mg panto- BioGaia turns its attention 10 the Swiss firm’s US dermatology unit. Nyco- prazole tablets and its non-prescription calcium towards oral-health brands med’s shareholders have agreed the deal. products – generated sales of C433 million in Actavis looks at diabetes service 10 Acquiring Nycomed, the Japanese firm said, 2010, while Takeda reported Consumer Health- would transform its global business by merg- care turnover of ¥60.3 billion (C525 million) in Valeant snaps up Sanitas 11 in C314 million cash deal ing Takeda’s “strong presence in the Japanese the year ended 31 March 2011. and US markets” with Nycomed’s “significant Non-prescription products will account for GENERAL NEWS 12 business infrastructure in Europe and high- around 6% of the combined business’ annual growth emerging markets”. ■ Continued on page 11 German court rejects Fenistil 12 for cold sores FDA panel recommends 13 acetaminophen changes Pack design draft excessive and negative Study links paracetamol 14 urope’s OTC industry has criticised the selected off the shelf suggests the draft recom- with blood cancer E“excessive requirements” proposed in the mendations are not in the interests of consum- MARKETING NEWS 15 European Medicines Agency’s (EMA’s) draft ers. “Many of the elements rejected or restrict- recommendations on pack design and label- ed in this guideline are key in the appropriate Bayer puts Biseptinespraid 15 ling for non-prescription medicines authorised selection of non-prescription medicines,”re- in free-access through the centralised procedure. marks the firm, adding: “We strongly believe Wartner pen on mission 16 The Association of the European Self-Med- this guideline would reduce correct selection.” to write-off verrucas and warts ication Industry, the AESGP,is also concern- Meanwhile, the OTC industry would like the Twice as fast Aspirin makes 17 ed about the “negative tone” of the draft rec- draft recommendations to cover the permission a worldwide debut in the US ommendations, which were released for con- to put product-specific website addresses on Alcon grows Systane with 18 sultation in March of this year (OTC bulletin, packs, as stated by the European Commission two for dry eyes 15 April 2011, page 10). back in 2008. The AESGP suggests adding a Research by one AESGP member company section to the document permitting “signpost- FEATURES 20 into the way non-prescription medicines are ■ Continued on page 14 OTC firms focus on 20 new directions Procter & Gamble is teaming up with J&J’s snaps up OTC assets from JB Teva, GlaxoSmithKline is putting itself on a par with the best fast-moving ohnson & Johnson affiliate Cilag Interna- worldwide rights to the Doktor Mom herbal consumer goods companies, and Jtional is set to pay around US$260 million cough brand, Fitovit vitamin range and Rinza Merck & Co and Pfizer are considering (C185 million) for JB Chemicals & Pharmaceu- cough and cold line. their options. Meanwhile, Meda, Benckiser and Sanofi have ticals’ OTC business in Russia and the Com- Doktor Mom was one of the most recog- made a string of acquisitions. Deborah monwealth of Independent States (CIS). The nisable brands in Russia, JB pointed out, hav- Wilkes reports. deal also includes worldwide rights to a num- ing been awarded a “Most Trusted European ber of the Indian company’s OTC brands. Brand Award” in the cough and cold segment REGULARS Under the terms of the transaction – which by Russian subscribers to Reader’s Digest on is expected to close by mid-2011 – - multiple occasions (OTC bulletin,31 March Events – Our regular listing 19 based Cilag would pay around US$210 million 2008, page 12). People – Regenauer to take helm 27 for the OTC business in Russia and the CIS, Cilag will pay a further US$47 million for of global unit at Merz Pharma JB said, and just over US$1.0 million for the ■ Continued on page 10

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COMPANY NEWS OTC

Mergers & Acquisitions/First-Quarter Results Stada gets to work on two acquisitions

tada Arzneimittel has returned to the acqui- of Stada’s executive board, who said recently Stada said turnover at its Branded Products Ssition trail with a vengeance by announcing the firm had replaced its “cautious acquisitions division had risen by 13% to C115 million in the two potential acquisitions that would expand policy” of the past two years with an “accel- first quarter of 2011 (see Figure 1), with non- its presence across most of Europe as well as erated acquisitions approach” (OTC bulletin, prescription products accounting for about 60% the Middle East. 15 April 2011, page 7). of the total. Adjusted for portfolio changes and The German firm said it was in exclusive At the time, Retzlaff noted that the company currency effects, the growth was 10%. Oper- talks to acquire a portfolio of branded products was pursuing three acquisition targets, includ- ating profit at the division increased by 18% to in Central and Eastern Europe and the Middle ing “an Eastern Europe package” and an “inter- C27.6 million. Operating margin grew from East from fellow German firm Grünenthal for esting target not too far from ”. Retz- 23.2% to 24.1%. around C360 million. Stada is also keen to hold laff said the company was looking for brands Branded Products’ sales in Stada’s home talks about the possible acquisition of Spirig with “high growth and high margins”. market of Germany – predominantly under the Pharma’s Swiss generics business. Stada is planning to buy a portfolio of 14 Stada and Hemopharm brand names – slipped The two potential deals underline the re- primarily prescription products from Grünen- back by 5% to C34.5 million. They represented marks made by Hartmut Retzlaff, chairman thal. The portfolio consists of six of Grünen- 27% of the group’s sales in the country,which thal’s own brands and eight licensed products, fell by 11% to C127 million (see Figure 2). including the Flexove/Glucomed glucosamine Turnover from Branded Products in Russia OTC bulletin brand, the Oekopharm range of nutritional sup- – Stada’s second biggest market in terms of plements, and a diclofenac patch. sales – increased by 37% to C30.4 million, rep- 30 May 2011 Number 363 Subject to the successful completion of nego- resenting over half of the group’s sales in the tiations and the approval of anti-trust authorities, country,which grew by 22% to C54.5 million. Editor & Publisher: Deborah Wilkes the deal is expected to close by the end of 2011. At constant exchange rates, the rise was 20%. Associate Editors: Aidan Fry Acquiring the Grünenthal brands is in line In the Italian market, Branded Products re- Mike Rice with Stada’s strategy of growing its Branded corded sales up by 2% to C10.1 million, account- Business Editor: Matt Stewart Products business and boosting its presence ing for 26% of Stada’s group sales in the coun- Assistant Editors: Jenna Lawrence in Eastern Europe. try,which improved by 21% to C38.7 million. David Wallace Meanwhile, the potential deal involving Spi- The share was down from 31% in 2010. Advertising Controller: Debi Minal rig Pharma’s Swiss generic business included Group operating profit advanced by 12% to 15 OTC and prescribed non-prescription prod- C57.6 million. Earnings before interest, tax, de- Marketing Manager: Val Davis ucts, Stada noted, along with 56 prescription preciation and amortisation (EBITDA) grew by Editorial, Subscription and Advertising products. The products had estimated annual 5% to C79.8 million. enquiries should be addressed to: OTC bulletin, OTC Publications Ltd, 54 Creynolds Lane, Solihull, sales of SFr45 million (C36 million). OTC West Midlands B90 4ER, UK. Tel: +44 1564 777550. Fax: +44 1564 777524. Business First-quarter sales Change Operating profit Change E-mail: [email protected]. (C millions) (%) (C millions) (%) Subscriptions Generics 293 +5 40 +5 Annual subscriptions to OTC bulletin in Europe are £625.00 for single copies and £355.00 for additional copies to the same ad- Branded Products 115 +13 28 +18 dress, including delivery. Subscriptions to addresses outside Eur- ope are subject to an additional charge of £30.00 to cover postage. Commercial 7-52 1+46 Subscription enquiries in Korea should be directed to Pharma Group/other 4+138 -11 – Koreana Ltd, 14th Floor,KTB Network Building, 826-14 Yeoksam- dong, Kangnam-gu, Seoul 135-080, Korea (Tel: +82 2 554 9591; Total Stada 418 +6 58 +12 Fax: +82 2 563 8289; E-mail: [email protected]). Advertising Advertising rates and data are available on request from the ad- Figure 1: Stada’s sales and operating profit in the first quarter of 2011 by business (Source – Stada) dress above or at www.otc-bulletin.com. About OTC bulletin CountryFirst-quarter ChangeBranded Products’ Branded Products’ OTC bulletin is published 20 times a year by OTC Publications Limited: twice monthly in February,March, April, May,June, Sep- sales (C millions)(%) sales (C millions) share in Stada (%) tember,October and November; and monthly in December,Jan- uary,July and August. A subscription to OTC bulletin includes Germany127 -11 35 27 the weekly electronic newsflash, news@OTCbulletin,which is Russia 55 +22 30 56 published around 45 times a year. OTC bulletin is printed by the Warwick Printing Company Limited, Caswell Road, Leamington Italy 39 +21 10 26 Spa CV31 1QD, UK. 35 +17 25 No part of this publication may be copied, reproduced, stored in a retrieval system or transmitted in any form without prior Spain 31 +31 15 permission from OTCPublications Ltd. Serbia 24 +11 311 ©OTC Publications Ltd. All rights reserved. Company registered in England No 2765878. Registered Office: Others 107 –34– 54 Creynolds Lane, Solihull, West Midlands B90 4ER, UK. OTC bulletin® is registered as a trademark in the European Total Stada 418 +6 115 28 Community. ISSN 1350–1097 www.OTC-bulletin.com Figure 2: Breakdown of sales by Stada and its Branded Products division in the first quarter of 2011, together with the proportion of group sales accounted for by Branded Products (Source – Stada)

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OTC COMPANY NEWS

Annual Results stands up to tough market

lliance Boots said its retail business had had offset a decline in sales of flu-related non- like-for-like UK sales improved by 0.5%. Adriven up sales and profits in the year end- prescription medicines and anti-viral products, The UK Health & Beauty margin rose by ed 31 March 2011, despite difficult conditions the company said, which had suffered in com- 0.4 percentage points to 10.6%, as UK trading in the consumer market and government cost- parison to the prior year,when turnover had profit grew by 5.3% to £713 million. cutting measures hitting its dispensing margins. been inflated by the swine-flu outbreak. Gourlay noted that the company was “half- The privately-held wholesaler and retailer Boots expanded its Retail Health portfolio way through” reorganising the UK Health & reported turnover up by 1.7% at its Health & during the year with the launch of the Boots Beauty business to make it a “much stronger, Beauty retail division to £7.63 billion (C8.68 Pharmaceuticals OTC brand, which it claimed simplified and more efficient organisation” that billion) (see Figure 1), while trading profit grew offered the “widest range of healthcare products would provide “best-in-class support” to its by 5.5% to £767 million. of any brand in the UK” and included thera- stores and “drive future growth”. The majority of the Health & Beauty divi- peutically-proven medicines, natural alterna- The efficiency drive was launched in Octo- sion’s sales were generated by its Boots UK tives, vitamins and first-aid products. ber last year (OTC bulletin,15 October 2010, business, which posted turnover up by 1.1% to Launched in October 2010 (OTC bulletin, page 2) and will lead to the loss of 900 “non- £6.39 billion. 29 October 2010, page 13), the brand provided store” jobs in the UK, primarily at the firm’s Sales of non-prescription medicines and consumers, Boots said, with “convenient access Health & Beauty division and the related con- healthcare products in the UK – which are to effective,affordable healthcare solutions”. tract manufacturing unit. grouped under the Retail Health banner within Alex Gourlay,chief executive of the Health At the time, Alliance Boots pointed out that Boots UK – edged up by 0.2% to £913 million. & Beauty division, pointed out that the brand the job losses represented under 10% of the The gross margin from sales of these products had performed “ahead of expectations” since it non-store workforce of these businesses in the had also improved, the company noted, thanks had been introduced and was set to be expanded UK. “Where possible,”the company stated, “the to a better product mix. with a new eczema cream, which had previously reduction will be achieved through staff turn- The growth had been achieved due to higher only been sold by prescription in the UK. over and by offering redeployment to other areas sales of what Alliance Boots termed “positive” Dispensing and related income, which rep- within the group.” healthcare products such as vitamins. These resented 38% of Boots UK’s total sales (see Figure 2), advanced by 2.4% to £2.41 billion. Reduce operating costs Lifestyle Retail Health Alliance Boots noted that a rise in dispensing According to the company, the reorganisa- 15% 14% volumes and “robust growth” in related income tion should reduce operating costs by £56 mil- £0.96 billion £0.91 billion had been partially offset by a fall in average lion annually from 2013/2014. It added that revenue per prescription, mainly as a result of rolling out the initiative over the next three years lower reimbursement prices. would cost around £67 million, of which £37 In the Beauty & Toiletries category,turnover million had been charged in 2010/2011. increased by 1.0% to £2.11 billion, with sales As of 31 March 2011, Alliance Boots was of fragrances, accessories and toiletries all in- operating 2,472 health and beauty stores in the creasing year on year. UK, of which 2,382 included a pharmacy. Dur- Dispensing Sales in Boots UK’s Lifestyle category slip- ing the year,19 new stores had been opened, the Beauty & Toiletries 38% ped back by 0.8% to £963 million. company said, while 37 had been relocated. A 33% £2.41 billion £2.11 billion Boots UK accounted for 95% of UK Health further 119 stores had been refitted. & Beauty sales, which grew by 1.2% to £6.72 The company would continue to open new Figure 2: Sales by Boots UK in the year ended 31 March 2011 – £6.39 billion – broken down by product billion. The chain contributed stores, Gourlay noted, relocate existing stores category (Source – Alliance Boots) the remaining £329 million. Health & Beauty’s to better premises and also acquire pharmacies “on a selective basis”. Country Annual sales Change Number However, Gourlay noted that the majority (£ millions) (%) of stores of new store openings would happen outside Health & Beauty – UK* 6,721 +1.2 3,128 of the UK, where Health & Beauty’s sales had improved by 6.1% to £905 million. On a con- 386 +3.5 154 stant-currency basis the rise was 5.9%, while Republic of Ireland 227 -3.4 58 like-for-like sales slipped back by 1.7%. The Netherlands 164 -5.7 72 Health & Beauty’s international trading pro- Thailand 76 +11.8 182 fit increased by 8.0% – 7.8% on a constant-cur- Other 52 –27rency basis – to £54 million,lifting the trad- Health & Beauty – International 905 +6.1 493 ing margin by 0.1 of a percentage point to 6.0%. As of the end of March, the Health & Beauty Total Health & Beauty 7,626 +1.7 3,621 division was operating 493 stores outside of the * Including Boots Opticians UK, the majority of which were spread across

Figure 1: Sales by Alliance Boots’ Health & Beauty division in the year ended 31 March 2011 and the number of four main markets – Norway,Republic of Ire- stores at 31 March 2011, broken down by country (Source – Alliance Boots) land, the Netherlands and Thailand. Further-

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COMPANY NEWS OTC

Country Annual sales Change like-for-like dispensing volume growth had been It also snapped up the remainder of wholesaler (£ millions) (%) strong, the company pointed out. Anzag, which operates in Croatia, Germany, Profitability at the company’s Irish stores im- Lithuania and Romania. France 4,557 -4.7 proved as reported, despite three new openings, Alliance Boots’ total group sales – consist- UK 2,673 +5.1 due to better margins and lower operating costs. ing of the Health & Beauty,Pharmaceutical Turkey 1,340 – Turnover in the Netherlands dropped back Wholesale and Contract Manufacturing busi- Spain 1,284 -5.4 by 5.7% to £164 million, with like-for-like rev- nesses, as well as its share of associates and joint Germany1,248 +263.8 enue falling by 1.8%. On a constant-currency ventures – improved by 10.3% to £23.3 billion Russia 788 +19.9 basis, turnover was also down by 1.8%. in the year ended 31 March 2011 (see Figure The Netherlands 766 -6.8 Profits in the Netherlands had been hit by 4). Trading profit grew slightly faster,increasing Czech Republic 456 +3.2 a cut in reimbursement fees, Alliance Boots by 10.6% to £1.16 billion over the 12 months. Norway 382 +14.4 said, and an expansion of insurers’ use of tend- Looking ahead, , Alliance Egypt 374 – ers to select lower-priced generic medicines. Boots’ executive chairman, said the company Expansion of the “Boots apotheek”phar- was focused on international expansion, not just Other 113 – macy concept – which offers a broader range of its wholesaling and retail businesses, but also Intra-segment -39 – of products than most Dutch pharmacies and, of Boots’ existing product brands, such as No7 Total Wholesale 13,942 +23.6 includes Boots-branded health and beauty prod- cosmetics and the Boots Laboratories range. ucts – had continued during the year,the com- Figure 3: Sales by Alliance Boots’ Pharmaceutical pany pointed out, with 13 stores having been Acquisitions to play key role Wholesale division in the year ended 31 March 2011, broken down by country (Source – Alliance Boots) rebranded and others scheduled to be convert- Acquisitions would of course play a part in ed to the new format in 2011/2012. growing the business internationally,Pessina more, around 50 stores were being operated by Although civil unrest in Thailand had ad- said, but he warned that the level of investment its franchise partner in Bahrain, Kuwait, Qatar, versely impact trading, sales in the country had would depend on the opportunities available. Saudi Arabia and the United Arab Emirates. grown by 11.8% to £76 million. On a constant- Alliance Boots had a “good pipeline of Gourlay noted that following the close of currency basis, the rise was a more modest potential deals”, Pessina revealed, which it was the year,the first Boots brand store had been 0.5%. Like-for-like revenue dropped by 1.3%. “carefully analysing”. opened in Sweden via its joint venture with the Profitability in Thailand had been maintain- Commenting on what funds were available, Swedish Association of Pharmacists, Sveriges ed, Alliance Boots noted, through a combination Pessina said that although the company had Farmacevtförbund (OTC bulletin,10 February of store openings, margin growth and underly- made significant investments in its “traditional 2010, page 3). ing store-cost efficiencies. A net 17 stores had markets” over the past few years, it still had a Elsewhere, Alliance Boots was now operat- been added during the year the company stated. “substantial amount of money for acquisitions”. ing 22 retail pharmacies in Lithuania and five Asked whether he would be looking to return in Russia, the company noted, following the International expansion boosts Wholesale Alliance Boots to the stock market in the near acquisition of German wholesaler Andreae- Meanwhile, at Alliance Boots’ Pharmaceu- future, Pessina said he felt there was “no need Noris Zahn (Anzag) (OTC bulletin,29 Oct- tical Wholesale division, international expansion to go public”, but that in reality,the decision ober 2010, page 1). – coupled with organic growth and the benefits would be made by Alliance Boots’ private- Norway remained Health & Beauty’s biggest from a division-wide improvement programme equity partner Kohlberg-Kravis Roberts (KKR). market outside of the UK, with sales rising by – led to a double-digit trading profit gain. However, Pessina said that he felt that KKR 3.5% to £386 million. On a constant currency Pharmaceutical Wholesale’s trading profit had recognised the growth of Alliance Boots basis, the growth was a more modest 0.5%. increased by 36.2% to £320 million, thanks to and would be happy to stay with the business Despite good retail sales growth in stores turnover which had risen by 23.6% to £13.9 for the next three years. that had been rebranded to the ‘Boots apotek’ billion (see Figure 3). Commenting on the recent sudden departure format, this had not been enough to offset lower During the year,Alliance Boots expanded of group chief executive (OTC dispensing turnover. This had been caused by the reach of its wholesale business by taking bulletin,31 March 2011, page 1), Pessina said lower reimbursement prices and had held back a majority stake in Turkish wholesaler Hedef that a replacement would be named in due like-for-like sales by 0.6%, Alliance Boots said. Alliance – which also has a strong presence in course, but that the company was “in no hurry” All the company’s 154 stores in Norway had Egypt and, through an associate, in Algeria – in to find a successor. now been rebranded as ‘Boots apotek’, Alliance July (OTC bulletin,13 August 2010, page 3). OTC Boots noted. The success of this format – which features a high number of Boots beauty and Business Annual sales Change toiletries products, together with tight cost con- (£ millions) (%) trols – had enabled the Norwegian business to Pharmaceutical Wholesale 13,942 +23.6 improve profitability before one-off reorgani- Health & Beauty 7,626 +1.7 sation costs, the company said. Contract Manufacturing & Corporate Costs 253 +0.4 In Ireland, sales from Alliance Boots’ 58 Intra Group -1,603 – stores increased by 0.6% on a constant-cur- rency basis to £227 million. As reported,turn- Total Group 20,218 +15.1 over declined by 3.4%. Associates & Joint Ventures 3,126 -13.0 On a like-for-like basis, sales had fallen by Total Alliance Boots 23,344 +10.3 3.0% Alliance Boots noted, as the fragile state of the Irish economy hit retail sales. However, Figure 4: Sales by Alliance Boots in the year ended 31 March 2011 by business (Source – Alliance Boots)

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OTC COMPANY NEWS

IN BRIEF First-Quarter Results ■ CHURCH & DWIGHT said its sales had Atrium Innovations boasts grown by 1.2% to US$642 million (C449 mil- lion) in the first quarter of 2011, despite a “dif- ficult economic environment”. double-digit jump in sales ■ IPSEN PHARMA has been awarded C17.1 million in damages from Mylan in a dispute anada’s Atrium Innovations said that its the region grew by 25% to US$75.9 million. over how Merck Generics marketed its ginkgo Clatest acquisitions and a rise in sales of Breaking down the company’s sales in North biloba-based Vitalogink in France. Ipsen con- branded products had combined to drive up its America, Atrium said that acquiring Seroyal vinced a Paris appeals court that Merck – which turnover by 19.7% to US$108 million (C75.1 had helped boost its turnover in the health- Mylan acquired four years ago – had broken million) in the first quarter of 2011. care-practitioner channel by 47% to US$41.8 competition rules in 2007 by marketing Vita- Acquiring fellow Canadian company Seroyal million, while organic sales growth had been logink as a substitutable generic version of Ip- International and Belgium’s Minami Nutrition responsible for the 13% uplift in sales through sen’s Tanakan, rather than as a therapeutic in December (OTC bulletin,21 January 2011, health food and specialist stores. equivalent. This led 240,000 prescriptions for page 1), as well as Trophic in March 2010 (OTC By contrast, contract-manufacturing revenue Tanakan to be dispensed with Vitalogink in the bulletin,31 March 2010, page 8) had added in the region, Atrium noted, had slipped back first three months after Merck launched its US$14.2 million to first-quarter sales. by 13% to US$8.3 million. product,the court stated. It noted that Vitalo- Furthermore, more turnover from branded Sales in Europe – which accounted for the gink itself had been prescribed just four times. products had added another US$5.2 million, remainder of Atrium’s first-quarter turnover – Atrium said. These gains had been partially advanced by 9% to US$31.8 million, driven by ■ HI-TECH PHARMACAL has divested for offset by a US$1.2 million fall in contract-man- organic growth and the acquisition of Minami. an undisclosed cash price the Midlothian Lab- ufacturing revenue and a negative currency im- Atrium’s earnings before interest, tax, depre- oratories supplements business it acquired three pact of US$0.5 million. ciation and amortisation (EBITDA) also bene- years ago. The buyer is Metrics, a US drug-de- North America accounted for 70% of the fitted from the Seroyal and Minami acquisi- velopment company. company’s sales during the quarter. Turnover in tions, increasing by 10.3% to US$23.4 million. OTC OTC

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COMPANY NEWS OTC

First-Quarter Results Celesio calls for Lloydspharmacy changes

elesio’s Lloydspharmacy chain in the UK Business First-quarter sales Change EBITDAChange C needs to “realign” its pharmacies to reflect (C millions) 2010/2011 (%) (C millions) 2010/2011 (%) the current operating environment as well as boost the appeal of the products and services it Pharmacies 863 +1.0 49.3 -17.1 offers, according to the company’s management Other Business Areas ––0.5 – board chairman, Fritz Oesterle. Patient & Consumer Solutions 863 +1.0 49.8 -16.3 Oesterle’s comments came as the pan-Euro- Pharmacy Solutions 4,704 +0.9 111.5 +3.3 pean wholesaler and retailer reported Lloyds- Manufacturer Solutions ––2.8 -29.7 pharmacy sales in the first quarter of 2011 of Other 156 –-22.6 – C512 million. Government cost-cutting measures Total Celesio 5,723 +1.0 141.5 -7.6 had hit prescription turnover and poor consumer confidence had damaged OTC sales, it said. Figure 1: Celesio’s sales and earnings before interest, tax, depreciation and amortisation (EBITDA) in the first An increase in prescription volumes had pre- quarter of 2011, broken down by business (Source – Celesio) vented a sales decline, Celesio said, coupled with a double-digit rise in turnover from ser- All of the company’s pharmacies in Ireland stores added to the 50 that had been opened in vices offered to institutions, including supply are expected to be converted into DocMorris 2010. By the end of the year,Celesio said, it agreements for care homes and prisons. stores by the end of 2012, Celesio noted, adding hoped to have reached its target of operating In February,Celesio recruited Tony Page as that this was the “first strategic step in setting 100 Swedish pharmacies. managing director of Lloydspharmacy. His re- up the strongest pharmacy chain in Europe”. As of 31 March 2011, Celesio was running mit is to diversify the chain’s income and make Outside of the UK, Celesio has pharmacies 2,287 pharmacies across Europe, 14 fewer than it the leading pharmacy brand in the UK by in Belgium, Czech Republic, Italy,Norway and a year earlier. This excluded the 63 Dutch phar- building on its heritage of medicines dispens- Sweden, as well as Ireland, all of which are macies contributed to Brocacef Holdings. Ten ing (OTC bulletin,11 February 2011, page 27). now managed by the DocMorris International pharmacies had been opened during the quarter, Lloydspharmacy accounted for 59.4% of Retail unit set up last year. the firm noted, eight of which were in Sweden. sales at Celesio’s Pharmacies business unit, The company’s stores in the Netherlands Start-up expenses relating to the Swedish which advanced by 1.0% – 0.5% when adjusted became part of Brocacef Holdings at the end chain held back earnings before interest, tax, for portfolio and currency effects – to C863 of November through a cooperation deal with depreciation and amortisation (EBITDA) at the million (see Figure 1). wholesaler and retailer Phoenix Pharmahan- Pharmacies business unit. These fell by 17.1% Across the rest of Europe, Celesio has start- del (OTC bulletin,30 June 2010, page 5). to C49.3 million. The start-up costs in Sweden ed to implement a rebranding strategy that will Celesio pointed out that it had extended its were compounded by government cost-cutting eventually see all 600 of its pharmacies outside fledgling pharmacy chain in Sweden during measures and costs related to setting up Doc- of the UK use the DocMorris brand name. the first quarter of 2011, with a further eight Morris International Retail. All of the sales at Celesio’s Patient & Con- sumer Solutions division – C863 million – were generated by the Pharmacies business unit. The First-Quarter Results Other Business Areas segment consists only of Celesio’s portion of the EBITDA generated by Self-medication sales grow at Krka Brocacef Holdings, which was C0.5 million in the first quarter. lovenia’s Krka said sales of its self-medica- Pikovit Prebio vitamin products had also con- In total, EBITDA at the Patient & Consum- Stion products had grown by 10.8% to C30.3 tinued during the period, the company noted. er Solutions division declined by 16.3% – 15.8% million in the opening three months of 2011. Self-medication sales grew in three out of adjusted for currency and portfolio effects – to During the quarter,the company had launch- Krka’s five operating regions, with the biggest C49.8 million. ed a number of self-medication products in var- increase – 17% – coming in Eastern Europe. Patient & Consumer Solutions accounted ious markets, Krka noted. In , Latvia Turnover in South-East Europe improved by for 15% of Celesio’s first-quarter group sales, and Slovenia, a spray had been added to its Sep- 9%, while in the company’s home market, sales which edged up by 1% to C5.72 billion. tolete sore-throat remedies, the company said, advanced by 3%. The dominant Pharmacy Solutions division while in Kazakhstan and Ukraine the Orsoslim In Central Europe and Overseas regions, – which contains the company’s wholesale busi- weight-loss capsules had been launched. sales of Krka’s self-medication products had ness, laboratory equipment and property units – A pantoprazole-based heartburn medicine slipped back, the company noted. posted turnover up by 0.9% to C4.70 billion. called Nolpaza Control had also been introduc- Self-medication products generated 11.7% Celesio’s total EBITDA for the three months ed, Krka said, along with the Bilobil Aktiv/Duo of Krka’s total sales in the first quarter,which dropped by 7.6% to C142 million,as falls in ginkgo biloba product, the Nalgesin S pain- increased by 4.8% to C258 million. Sales out- EBITDA at the Patient & Consumer Solutions killer and a honey-and-lemon flavour Septo- side of Slovenia were responsible for 91% of and Manufacturer Solutions divisions offset a lete S product. the group’s total turnover. rise at the Pharmacy Solutions business. The rollout of the Pikovit IQ/Omega 3 and OTC OTC

30 May 2011 OTC bulletin 7 OTC30-05-11p8-9FIN.qxd 25/5/11 13:03 Page 2

OTC COMPANY NEWS TaAnnual Resultsisho eyes international expansion

apan’s Taisho Pharmaceutical said it planned Business Annual salesChange Forecast sales Change Jto expand its OTC drug business outside of (¥ billions) (%) (¥ billions) (%) Japan, as it faced up to a domestic market de- fined by a sluggish economy,greater competi- Lipovitan D48.9 -1.1 49.0 +0.2 Other Lipovitan 22.2 +3.9 22.6 +1.8 tion, a changed structure and the long-term im- Total Lipovitan brand 71.1 +0.4 71.6 +0.7 pact of the recent earthquake. Zena brand 3.3 -3.6 3.5 +3.6 Establishing Taisho as a leading name in the Asian energy-drinks market was one aim, the Other drinks 1.6 ––– company noted, but developing its presence in Total tonics and nutrient drinks 76.0 +0.5 –– the entire OTC market across South-East Asia Cold remedies (Pabron brand) 25.7 +3.1 25.7 +0.1 was also a priority. Hair treatments (RiUP brand) 14.9 +17.2 15.2 +2.4 Japan’s leading OTC player signalled its Analgesics (Naron brand) 4.6 +6.0 4.3 -7.4 intentions recently by paying approximately Gastrointestinal treatments 4.3 -1.0 4.3 -0.7 MYR370 million (C85.6 million) for Malaysia’s Laxatives (Colac brand) 3.9 -1.5 4.0 +4.4 Hoe Pharmaceuticals and its portfolio of con- Cold remedies (Vicks brand) 3.2 +7.9 3.2 +0.9 sumer and medical dermatology brands (OTC bulletin,15 April 2011, page 1). Biofermin 5.7 +7.4 5.7 +0.2 Acquiring Hoe enabled the company to enter Overseas OTC4.7 +483.6 6.5 +40.3 the Malaysian pharmaceutical market “in earn- Other OTC products 9.1 –11.1 – est”, Taisho said, and also to grow its business Total OTC products 152.1 +4.8 155.1 +2.0 across Asia by using Hoe’s distribution channels to sell its existing products. Figure 1: Breakdown of Taisho Pharmaceutical’s OTC sales in the year ended 31 March 2011. Taisho took its first major steps outside of Forecasted sales are for the year ending 31 March 2012 compared with actual sales in the previous 12 months (Source – Taisho Pharmaceutical) Japan in 2009 when it acquired -Myers Squibb’s OTC assets in the Asia-Pacific region, Business Annual sales Change Forecast sales Change excluding China and Japan (OTC bulletin,30 (¥ billions) (%) (¥ billions) (%) September 2009, page 1). Livita brand 3.6 +15.8 3.7 +3.6 The company’s overseas OTC sales increas- Overseas drinks 6.3 +9.9 6.5 +3.5 ed six-fold to ¥4.7 billion (C40.5 million) in Others2.6 –3.3 – the year ended 31 March 2011, and are forecast Foods for specified health use 12.5 +15.2 13.5 +7.7 to grow by another 40.3% to ¥6.5 billion over OTC products 152.1 +4.8 155.1 +2.0 the company’s current fiscal year (see Figure 1). Turnover outside of Japan accounted for Others 2.6 -10.6 2.7 +5.0 just 3% of Taisho’s total OTC sales in the 12 Total Self-Medication 167.2 +5.3 171.3 +2.5 months, which increased by 4.8% to ¥152 mil- Prescription operations 101.4 +1.9 102.7 +1.2 lion despite a “weak” overall market. Total for Taisho 268.6 +3.9 274.0 +2.0 The rise in OTC sales pushed up turnover at Taisho’s Self-Medication division by 5.3% Figure 2: Taisho Pharmaceutical’s sales in the year ended 31 March 2011. Forecasted sales are for the year ending 31 March 2012 compared with actual sales in the previous 12 months (Source – Taisho Pharmaceutical) to ¥167 billion over the year (see Figure 2). Operating income at the division had grown by rie products offset a decline in sales of the lead- Annual sales Change 26% to ¥38.4 billion, Taisho said, thanks to a ing Lipovitan D drink. These fell by 1.1% to (¥ billions) (%) drop in advertising expenditure and efforts “con- ¥48.9 billion. siderably” to reduce selling, general and admin- As Figure 3 shows, sales for all of Taisho’s Food channels 39.6 +2.7 istrative costs. tonic and nutrient drinks rose by 2.7% to ¥39.6 Drug channels 36.5 -1.8 To drive growth in the Japanese OTC market, billion through food channels, but dropped back Total 76.0 +0.5 its Self-Medication division would “broaden our by 1.8% to ¥36.5 billion through drug channels. product line-up of category 1 drugs”. This would Meanwhile, sales of Taisho’s mainstay Pab- Figure 3: Breakdown by distribution channel of Taisho Pharmaceutical’s sales of tonics and nutrient be done by switching more ingredients from pre- ron cold remedies grew by 3.1% to ¥25.7 bil- drinks in Japan in the year ended 31 March 2011 scription-only to OTC status, as well as “aggres- lion, as the brand shook off a poor start to the (Source – Taisho Pharmaceutical) sively developing new product categories”. year to post a solid set of results in the final six Taisho expects these efforts to drive up sales months. Pabron’s nasal-inflammation lines had the RiUP brand by 17.2% to ¥14.9 billion. at the Self-Medication division by 2.5% to ¥171 enjoyed a strong fourth quarter thanks to a good In the ‘foods for specified health use’ cate- billion in the year ending 31 March 2012. start to the spring allergy season. gory,turnover advanced by 15.2% to ¥12.5 bil- Sales of Taisho’s core Lipovitan energy drinks Despite category 1 drugs generally struggling lion, thanks to a double-digit rise in sales of the edged up by 0.4% to ¥71.1 billion for the year, in the Japanese market, the RiUP X5 minoxidil Livita brand. as higher turnover from the brand’s low-calo- product for hair regrowth pushed up sales of OTC

8 OTC bulletin 30 May 2011

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OTC COMPANY NEWS

Business Strategy Business Strategy/First-Quarter Results Actavis looks at BioGaia turns its attention diabetes service towards oral-health brands ctavis intends to challenge “traditional Athinking” in the generics industry and of- ioGaia will pay special attention to its pro- ments for its oral-health products covering Fin- fer direct-to-consumer portfolios in dermatol- Bbiotic oral-health products containing Lac- land, Indonesia and Japan. ogy and women’s health, the firm’s chief exec- tobacillus reuteri during 2011, according to the Meanwhile, BioGaia said that its sales had utive officer Claudio Albrecht insisted as he Swedish firm’s president Peter Rothschild. grown by 19% to SKr69.9 million (C7.81 mil- formally opened its new management offices Distribution agreements with Sunstar Suisse lion) in the first quarter of 2011, as turnover in- in Zug, Switzerland, on 9 May. About 150 staff for the company’s probiotic lozenges had al- creased in all markets except for North America. will occupy the 4,000 sq m offices. ready been renegotiated,Rothschild noted, and Sales in Japan picked up during the quarter, He said companies like Actavis needed to the products had been withdrawn from markets more than doubling BioGaia’s turnover in Asia change to help payers cope with rapidly-rising where sales had not met expectations. to SKr8.8 million. Rothschild noted that the healthcare costs. Unveiling a new corporate Sunstar was selling the probiotic lozenges earthquake that devastated parts of Japan in ‘tagline’ of “Think smart medicine”, he claim- in seven countries in Europe and the US, but March had impacted on deliveries, but had had ed that generics companies would increasingly following the renegotiations, the lozenges will no impact on the quarter’s results. Resolving have to focus on complex products and broader now only be available in four European markets problems with two of its customers in China healthcare offerings. and the US. and Korea had also aided sales growth in the He said Actavis would aim to serve the At the same time the company had award- region, he added. world’s 230 million diabetes patients by devel- ed the rights to its oral-health products in Bul- oping a uniquely broad portfolio of diabetes garia, and Slovakia to Ewopharma and Double-digit rise in Europe treatments, based around recombinant and an- in Ukraine to Delta Medical. European turnover had improved by 11% alogue insulins. Rothschild told OTC bulletin that BioGaia to SKr5.5 million, BioGaia noted, due primar- “Intelligent strategic partnerships will give was trying to secure deals for its oral-health ily to sales of bacteria cultures to Nestlé and us the possibility to be one step ahead of our products in other markets, but there was no better sales of finished consumer products. competitors,”Albrecht stated. guarantee that this would happen this year. In contrast, Nestlé’s decision to discontinue Albrecht’s plan is to go beyond direct treat- A “very strong clinical programme” to sup- sales of beverages using BioGaia’s Lifetop straw ment for diabetes by pushing into adjacent cat- port the products was underway,Rothschild dispensers led to a 73% drop in turnover in Can- egories and services,such as devices and test pointed out, and the company was hopeful that ada and the US to SKr1.2 million. This had strips to measure blood-sugar levels. “We will its oral-health portfolio would make a “signif- been compounded, the company noted, by low- not develop these products ourselves. We will icant contribution” to its growth in the future. er sales of finished products. look for a partner that has the devices, but lacks Sunstar Suisse launched BioGaia’s probiotic One bright spot in Canada and the US, Bio- the reach into the prescriber arena,”he said. oral-health products in France, Germany, Italy Gaia said, had been better sales of its probi- Noting that diabetics often suffered from and Spain in 2007 under its GUM PerioBalance otic drops and tablets by distributors. associated conditions such as eyesight problems brand name, after the two companies struck an Turnover in the rest of the world had more and poor circulation to hands and feet, Albrecht exclusive distribution deal (OTC bulletin,30 than doubled to SKr6.1 million, the company said there was great potential for Actavis to November 2006, page 3). pointed out, as a result of higher sales of fin- leverage its extensive prescription and OTC In 2008, Sunstar Suisse took up an option ished products in Australia, South Africa and portfolios and pipelines. “The opportunity is to launch the products in more than 100 coun- South America. considerable, but not too complicated for a gen- tries worldwide under the GUM PerioBalance BioGaia’s operating profit rose by 66% to erics player,” he insisted, adding that Actavis name, starting with the US (OTC bulletin,25 SKr23.4 million. Excluding currency effects, would develop a full-service concept within a January 2008, page 5). operating profit would have increased even Diabetes Care unit. BioGaia also has exclusive distribution agree- faster by 99%. OTC OTC

Mergers & Acquisitions OTC offerings in these growth markets and support our emerging market strategy.” J&J’s Cilag snaps up OTC assets from JB The deal is Johnson & Johnson’s first major OTC acquisition since it reorganised its global ■ Continued from front page in Russia – the world’s eighth-largest OTC mar- consumer healthcare business in April (OTC OTC inventory and receivables held by JB’s ket – the CIS and other countries. bulletin,15 April 2011, page 3). wholly-owned Russian subsidiary,the Indian Jesse Wu,worldwide chairman of Johnson Johnson & Johnson said at the time that re- firm noted, adding that it would also supply & Johnson’s Group of Consumer Companies, structuring would not only help repair the dam- finished products for the acquired Russia/CIS said that emerging markets continued to be an age caused by a series of OTC product recalls business through a long-term supply agreement. “important growth opportunity”. and manufacturing problems in the US, but also Johnson & Johnson said the company and “This acquisition of strong brands in Rus- accelerate its growth in emerging markets. its affiliates would market the acquired brands sia,”Wu added, “will allow us to expand our OTC

10 OTC bulletin 30 May 2011 OTC30-05-11p10-11FIN.qxd 26/5/11 07:17 Page 3

COMPANY NEWS OTC

Mergers & Acquisitions Mergers & Acquisitions Japan’s Takeda pays Valeant snaps up Sanitas C9.6bn for Nycomed

■ Continued from front page in C314 million cash deal sales of approximately C15 billion. The deal is expected to close by the end of September 2011. aleant Pharmaceuticals International is set ing 87.2% of Sanitas’ shares had agreed to the Yasuchika Hasegawa,Takeda’s president V to acquire Lithuanian generics firm Sani- deal. A mandatory tender offer would be made and chief executive officer,said the company tas Group in a cash deal that values the firm at to acquire the remaining minority interests, the was “committed to transforming” its organisa- C314 million. Sanitas’ major shareholders have company noted, adding that the purchase price tion by acquiring Nycomed. agreed the transaction. was expected to be around C364 million, in- In March, Nycomed reported annual sales Sanitas would generate sales of over C100 cluding the assumption of approximately C50 down by 1.8% – 6.2% in local currencies – to million in 2011, Valeant expected, from its port- million in debt. C3.17 billion in 2010 (OTC bulletin,17 March folio of over 390 branded generics – includ- 2011, page 6), due primarily to the impact of ing OTC vitamins and supplements and non- Lost out to Teva over Cephalon generic competition to its prescription panto- prescription dermatology products. The port- The deal comes shortly after Pearson insist- prazole products. folio is sold in nine countries throughout Cen- ed Valeant would continue to pursue acquisi- Sales at Nycomed’s OTC Products division tral and Eastern Europe, primarily Lithuania, tion opportunities after it lost out to Teva Phar- fell by 0.9% at local currencies to C373 mil- Poland and Russia. maceutical Industries in its attempt to acquire lion. As reported,sales increased by 8.7%. Michael Pearson, Valeant’s chairman and Cephalon (OTC bulletin,13 May 2011, page 3). This excluded sales from the company’s non- chief executive officer,said acquiring Sanitas Meanwhile, Valeant said its sales had increas- prescription pantoprazole products and non- provided the company with an “exciting oppor- ed by 21% on a proforma basis to US$565 million prescription calcium products, which Nycomed tunity” to expand its European branded-gen- (C402 million) in the first quarter of 2011, fol- lists in its Speciality Products division. eric portfolio. lowing its merger with Biovail last year (OTC Including the non-prescription pantoprazole Valeant noted that shareholders represent- bulletin,15 October 2010, page 3). products and non-prescription calcium products, OTC total OTC sales at Nycomed improved by 3.8% – 2.1% in local currencies – to C433 million. During 2010, Nycomed’s Pantoloc Control OTC pantoprazole product was launched in 14 European markets by Consumer Health through a co-marketing agreement signed by the two companies in February (OTC bulletin, 10 February 2010, page 1). Nycomed markets the product in a number of other European countries under various brand names (OTC bulletin,19 June 2009, page 1). Turnover generated by the OTC Products division’s 10 best-selling brands had advanced by 6.6%, the company noted, led by the Neo- saldina analgesic brand in . Better sales in emerging markets and espe- cially in Latin America and Russia, Nycomed said, had been the key factor behind the growth in OTC Products’ turnover.

Takeda’s OTC sales up by 3.5% Meanwhile, Takeda has just reported a 3.5% rise in sales at its Consumer Healthcare busi- ness to ¥60.3 billion in the year ended 31 March 2011, driven by better sales of Alinamin vita- min tonics and Benza cold remedies. Operat- ing income increased by 10.9% to ¥12.2 bil- lion as expenses fell. The Consumer Healthcare business gener- ated just 4% of Takeda’s total group turnover, which slipped back by 3.2% to ¥1.42 trillion over the 12 months. OTC

30 May 2011 OTC bulletin 11 OTC30-05-11p12-13FIN.qxd 25/5/11 11:55 Page 2

OTC GENERAL NEWS

Legal Cases German court rejects Fenistil for cold sores

ovartis Consumer Health cannot apply the under the Fenistil Pencivir bei Lippenherpes Furthermore, the court found, Novartis’ pro- NFenistil umbrella brand to its cold-sore brand name midway through 2005 (OTC bul- posed name contravened paragraph 8 of the cream containing penciclovir,aGerman court letin,29 July 2005, page 15). medicines law, which covers misleading names has decided. However, Novartis has appealed As the legal dispute with BfArM has rum- and claims. This legal restriction was particu- against the ruling. bled on, Novartis has continued to market the larly important for non-prescription medicines, The company stressed that “medicines und- cold-sore cream, and recently extended it with it said, because “regularly no or only a very er the Fenistil brand that are already on the mar- a coloured cream designed to blend with skin limited discussion takes place between the pur- ket can continue to be sold”. tones (OTC bulletin,13 May 2011, page 18). chaser and the pharmacist”. “Medicines with different active ingredients Novartis argued the newcomer was “It cannot be assumed that an averagely in- and for different illnesses cannot be marketed labelled as treating cold sores and there would formed, attentive and sensible consumer would under the same brand name,”stated Germany’s be no confusion among consumers, especially deduce the difference between Fenistil prod- federal institute for drugs and medical devices, as they did not necessarily associate particular ucts containing an antihistamine and those con- BfArM, welcoming the Cologne court’s deci- active ingredients with umbrella brands. taining an antiviral agent,”the court ruled. sion in its favour. But when BfArM stuck to its position, Nov- “The name of a medicine is not a market- artis sought a legal ruling. ing instrument,but rather a legal category in Several similar cases are ongoing In its decision – which does not yet have the its own right for ensuring medicines safety,” Several similar cases in which BfArM has force of law – the Cologne administrative court the court stated. objected to umbrella branding are currently be- said Novartis’ proposed name contravened para- Commenting on the ruling, Novartis said the fore the German courts. graph 25, section 3, of the German medicines dispute “concerned a fudamental legal question Novartis had appealed against BfArM’s de- law, which reads: “Authorisation of a medicine on branding which has not yet been answered”. cision to reject its proposed brand name follow- is to be denied if it differs in the type or amount “Novartis takes the decision of the Cologne ing the switch of topical penciclovir from pre- of active ingredient from a medicine of the administrative court very seriously and is exam- scription-to-non-prescription status at the end same name that has already been authorised ining what consequences can be drawn from of 2004 (OTC bulletin,30 June 2004, page 1). or is on the market.” it,”the company stated. “The safety and trust The regulatory agency said Novartis could The suffixes ‘Pencivir’ and ‘bei Lippenher- of our patients and customers in our medicines not use the Fenistil umbrella brand for penci- pes’ to the Fenistil brand name were “of an add- has absolute priority.” clovir because consumers would expect the cold- itional, but by no means definitive,nature”, the But BfArM also insisted its case had been sore cream to contain the same active ingred- court decided. driven by concerns over consumer safety. “Pat- ient as other products in the Fenistil range – “The change of name was intended to trans- ients must be able to trust that they are getting dimetindene maleate. ferthe trust in different Fenistil products with a medicine that they know and tolerate well,” However, as established practice in Germ- the same active ingredient – that had been built commented the agency’s president, Professor any was to ‘tell and do’, rather than ‘tell and up through years of advertising and market pre- Walter Schwerdtfeger. “Their safety must have wait’, regarding medicines names, Novartis sence – onto a new product with a different act- clear precedence over the marketing interests was able to launch its penciclovir 1% cream ive ingredient,”the court observed. of the .” OTC

Research Research finds dietary supplement can reduce pre-eclampsia

dietary supplement containing L-arginine to L-arginine alone or the combination of L- and a deficiency in the amino acid L-arginine, Aand antioxidant vitamins can reduce the arginine and antioxidant vitamins”. which helps to maintain a healthy blood flow incidence of pre-eclampsia in pregnant women In an accompanying editorial, two UK ex- during pregnancy. Some experts also think that at high-risk of suffering the condition, accord- perts said the trial reported an important find- antioxidant vitamins can help protect against ing to a study published by the British Medi- ing but some crucial questions remained. For the condition. cal Journal’s BMJ.com. instance, how do L-arginine and vitamins work They set out to test the theory that a com- The authors of the study said that a “rela- together,what are the potential harmful effects, bination of L-arginine and antioxidant vitamins tively simple and low-cost intervention may and what are the effects in other settings and would prevent the development of pre-eclamp- have value in reducing the risk of pre-eclamp- populations? sia in high-risk women. sia and associated pre-term birth”. Before more trials were started, they sug- The randomised controlled trial took place gested, a rigorous systematic review was need- at a hospital in City. Pregnant women Further study is needed ed “of the numerous inconsistent strands of evi- at high risk of pre-eclampsia were randomly The team of researchers in Mexico and the dence relating to L-arginine and its possible ef- divided into three groups: 228 received daily US added, however, that further study was need- fects on pre-eclampsia”. food bars containing both L-arginine and anti- ed to “determine whether these results can be The team in Mexico and the US were invest- oxidant vitamins; 222 received bars containing repeated and to identify whether they are due igating a possible link between pre-eclampsia only vitamins; and 222 received placebo bars

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GENERAL NEWS OTC

Regulatory Affairs mittees’ recommendations to give parents and caregivers more accurate and detailed dosing information where it is needed – directly on FDA panel recommends the Drug Facts label,”commented Scott Mel- ville, the CHPA’s president and chief executive officer. “The advisory committees unanimously acetaminophen changes recognised that providing parents and caregivers information on how to dose by weight and how to dose for children six months to two years hildren’s medicines containing acetamino- added the trade association. of age will help reduce dosing confusion.” C phen will soon carry dosing instructions for The FDAcommittees also voted unanimous- At the meeting, the FDA’s advisory com- children under the age of two years in the US, ly for the new labelling for children between mittees focused on the “ways that administra- if the Food and Drug Administration (FDA) the ages of six months and two years to include tion by caregivers can be improved so that medi- acts on a recommendation by two of its advi- the indication of fever reduction. However, they cation errors can be minimised” for acetamin- sory committees. did not want the new labelling to include the ophen (OTC bulletin,15 April 2011, page 14). At a meeting on 17-18 May,the FDA’s Non- indication of pain relief, which is currently in- Ahead of the meeting, the CHPAannounced prescription Drugs Advisory Committee and cluded for children over two years of age. that all liquid acetaminophen medicines for in- its Pediatric Advisory Committee voted in fav- Following the meeting, the CHPA urged the fants and children under 12 years of age would our of adding dosing instructions for children FDA to include relief of pain as an indication have the same concentration in the US, starting between the ages of six months and two years on the OTC label. from mid-2011 (OTC bulletin,13 May 2011, to the labelling of single-ingredient children’s The industry association pointed out that page 15). medicines containing acetaminophen, which is “paediatricians recommend acetaminophen as The CHPAsaid its member companies had known as paracetamol in many other countries. a mainstay for the treatment of pain in children “voluntarily” agreed to convert all single-in- Panel members were unanimous in their view under two years, including pain associated with gredient liquid acetaminophen medicines for that the pharmacokinetic, safety and efficacy ear infections, sore throat, teething, and minor children under 12 years of age to a concentra- data supported the move. traumatic conditions”. “As experts at the FDA tion of 160mg/5ml. The “current concentrated meeting discussed today,” it added, “physicians infant drops will no longer be sold”, added the Parents told to “Ask a doctor” can continue to recommend these medicines industry association. Currently,labelling for such products – in- for pain relief in infants.” Commenting on the move,the CHPA said it cluding McNeil’s Tylenol and Novartis’ Tri- At the meeting, the FDA’s advisory com- would help parents and caregivers “avoid any aminic – instructs parents to “ask a doctor” be- mittees also voted unanimously to add weight- potential dosing confusion”. fore giving the medicine to children under two based dosing information to the labelling of all The CHPA noted that liquid acetaminophen years of age. single-ingredient children’smedicines contain- medicines would have enhancements to their According to the US Consumer Healthcare ing acetaminophen. The dosing regimen is cur- age-appropriate dosing devices. Products for Products Association (CHPA), estimates sug- rently age-based, but leading suppliers of these infants would have syringes for more accurate gest that in any given week approximately 12% products voluntarily include weight-based dos- dosing as well as flow restrictors, the CHPA of children up to 11 years of age have taken ing information on the labelling. added, while any products for children between acetaminophen. “The peak of acetaminophen “The manufacturers of paediatric acetamin- two and 12 years of age would continue to have use is among children six to 23 months of age,” ophen products support the FDA advisory com- dosing cups. OTC

containing no L-arginine or vitamins. Market Research The women started taking the supplements when they were around 20 weeks pregnant and SymphonyIRI offers more Boots data continued until delivery. Blood pressure and L- arginine levels were measured every three to ymphonyIRI Group said that “almost all” The data would be available through the four weeks at the hospital clinic. S sales data on products sold in retailer Boots market-tracking service,InfoScan, and the web- The proportion of women developing pre- was now available through its market-tracking based named account data portal, SalesWeb, eclampsia was 30.2% in the placebo group, services for health and beauty brands in the UK. continued the market researcher. 22.5% in the vitamin only group, and 12.7% The market researcher pointed out that this SymphonyIRI’s retail business unit direc- in the L-arginine plus vitamin group. was the first time that Boots had made available tor,David Ware, commented that the “avail- This means women in the L-arginine plus named account data for in-store sales of brand- ability of more granular in-store sales data of vitamin group were significantly less likely to ed own-label products. branded and private-label products sold in Boots develop pre-eclampsia compared with the pla- Data provided by Boots included sales vol- will give health and beauty brands – that make cebo group. However, the vitamins alone did ume and value, pricing and promotional status, up more than a third of Boots total sales – a not significantly reduce the incidence of pre- said SymphonyIRI, adding it would “release much deeper understanding of their perform- eclampsia. and offer insight on this data to provide health ance in the UK’s health and beauty market”. The team also found that L-arginine plus and beauty brands with key performance indi- “The previous release of named account data vitamins significantly reduced the risk of pre- cators on own, competitor and Boots own-label on a select group of categories has facilitated mature birth compared with placebo. products helping them to optimise their mar- true collaboration,”said Ware. OTC keting campaigns and in-store promotions”. OTC

30 May 2011 OTC bulletin 13 OTC30-05-11p14-15FIN.qxd 25/5/11 12:02 Page 2

OTC GENERAL NEWS

Regulatory Affairs Pack design draft is excessive and negative

■ Continued from front page identification of the medicine name.” can cause confusion with other types of prod- ing to further sources of information which are Similarly,says Cranz, many statements in uct like, for example, confectionery”. helpful for consumers and relevant to the ther- the draft recommendations could be reworded The draft recommendations also prohibit the apeutic indication or product”. with a more positive tone. use of images of leaves or fruit to illustrate the Dr Hubertus Cranz, the AESGP’s director- Cranz insists that “subjective preferences” taste of the medicine. general, warns that the recommendations could of assessors should not be the basis for assess- However, images of the pharmaceutical form, have “major implications for non-prescription ment decisions. “Packaging design is a very special administration aids, such as spoons or medicines”. “The excessive requirements go be- subjective area and opinions about what is and oral syringes, and parts of the body,are allowed. yond what has already been approved through what is not acceptable can vary widely,” he ob- Commenting on additional information com- the centralised procedure and further than some serves. “For this reason, assessment should foc- patible with the SmPC, the draft recommenda- practices in member states,”he points out. “Al- us on whether packaging complies with the tions discourage the use of statements about though the recommendations are only intended legal provisions rather than on personal judge- a lack of side-effects. They also maintain that to apply to non-prescription medicines autho- ments about the design.” statements like “can be used in pregnancy” or rised through the centralised procedure, they He says the draft recommendations should “suitable for diabetics” should not be allow- could be taken into account by regulators in- take into account the AESGP’s ‘Guidance on ed, as pregnant women and diabetics should side and outside of the European Union for pro- package design for non-prescription medicines’, be advised not to take medicines without pro- ducts to be authorised or registered on the nat- which was published in early 2009. fessional advice. ional level.” The AESGP is now finalising its response In addition, statements about the speed and The AESGP highlights that the draft recom- to the draft recommendations, which will be duration of action of the medicine are not allow- mendations are inconsistent with existing non- submitted by the deadline of 30 June 2011. ed, according to the draft recommendations, un- prescription medicines authorised through the When the draft recommendations were re- less they are “deemed to be helpful for the safe centralised procedure. leased in March, the EMA pointed out that they use of the medicine”. Packaging for GlaxoSmithKline Consumer had been developed after consulting European Furthermore, statements related to excipi- Healthcare’s Alli weight-loss medicine, for ex- Union member states on national practices for ents that are not part of the medicine formu- ample, uses four different colours in the brand pack design and labelling for non-prescription lation and, therefore, do not have any known name. However, the draft states that “different medicines. It noted there were differences in action or effect, should not be allowed on the colours in the name of the medicine are dis- national practices, particularly “regarding the packaging. However, the phrase “sugar-free” couraged since they may negatively impact on acceptability of symbols/pictograms, and any can be included, as it “can be considered use- the correct identification of the medicine name”. additional information compatible with the ful information for the patient”. As well as “going beyond what has already Summary of Product Characteristics (SmPC)”. According to the draft recommendations, been accepted on the pack of a centrally-auth- Discussing the use of symbols or pictograms, clear identification and selection of the appro- orised non-prescription medicine”,states the the draft recommendations state that images of priate product is very important for non-pre- AESGP,this statement has a “negative tone”. children should not be included, as they “may scription medicines, especially in cases where The industry association suggests that it could lead to confusion as to the exact age group they there is no intervention by a pharmacist. “Pack be reworded to read: “Different colours in the are representing”. Neither should images of toys design and labelling are considered key ele- name of the medicine are allowed, provided and balloons be placed on the packaging, ac- ments to ensure the safe use of this type of they do not negatively impact on the correct cording to the draft recommendations, as “these medicine,”they add. In terms of the general design and layout of packs, the draft recommendations include views on graphic elements, body text, multilingual Research packs, the use of capital letters and italics, the Study links paracetamol with blood cancer use of colour,and the use of contrast. The sec- tion on contrast, for example, states that “highly igh use of paracetamol could almost dou- link and could simply be a result of the meth- glossy,metallic reflective packaging may affect Hble the chances of a person suffering from ods used or a statistical quirk”. the legibility of the information”, and the choice blood cancer,according to research just pub- The researchers looked at 64,839 initially of packaging material should ensure that in- lished in the Journal of Clinical Oncology. healthy older men and women over an average formation is clear and legible. However, the researchers based at the Fred of six years. Of this group, 577 people – or less Interested parties have until 30 June 2011 Hutchinson Cancer Research Center in the US than 1% – developed blood cancer. to comment on the draft recommendations, said that supporting evidence from other pros- Among those who developed blood cancer, which are aimed at companies preparing mock- pective studies was needed before recommenda- 52 were classified as having a high use of parac- ups and specimens of the packaging for non- tions about paracetamol use could be made. etamol. This represented nearly 2% of all people prescription medicines authorised through the Commenting on the findings of the research, with a high use of paracetamol. High use wasde- centralised procedure. The draft recommenda- the Proprietary Association of Great Britain fined as having used the medicine at least four tions were produced by the Working Group on (PAGB) said it was “important to note that a days per week and for at least four years. Quality Review of Documents. numerical association does not prove a causal OTC OTC

14 OTC bulletin 30 May 2011 OTC30-05-11p14-15FIN.qxd 25/5/11 12:02 Page 3

MARKETING NEWS OTC

Launches Bayer puts Biseptinespraid in free-access

“professional antiseptic” and a “first-aid spraid, which sprays out a mist that eradicates A essential” is how Bayer HealthCare is bil- the word. The advertisement closes with an ling a self-selection version of its Biseptine image of the product, accompanied by text stat- brand in France. ing that it is effective,does not sting and does The antiseptic solution has recently been add- not stain. Further text indicates that the prod- ed to the list of products available through the uct is available in pharmacies. country’s ‘free-access’ pharmacy displays under the name Biseptinespraid. Internet and trade-press advertising Bayer said it would support the free-access Bayer is also using internet and pharmacy- launch of Biseptinespraid – which contains 4% press advertising to promote Biseptinespraid. benzyl alcohol, 0.25% chlorhexidine gluconate, The company states that the product uses the and 0.025% benzalkonium chloride – with a same formula as antiseptics recommended for television advertising campaign appearing on hospital use. It does not contain iodine, chlo- five of France’s major channels between May rinated compounds, or ethyl alcohol,the com- and September. pany claims. The television commercial for Biseptine- Biseptinespraid should be used once or twice spraid shows silhouettes of children engaging a day to disinfect superficial wounds. Bayer in- in potentially-harmful activities, including cyc- dicates that the product is suitable for all ages ling, playing with a cat and dropping a glass. and acts as a bactericide and fungicide. The word “bacteries” is then spelled out using It is available in a 125ml bottle with a mea- a variety of dangerous household objects, such suring cup, or a ‘travel-size’ 50ml spray bottle. as a handsaw, a pair of scissors, a penknife and Bayer HealthCare’s television commercial for a razor blade. Biseptinespraid in France features silhouettes of A finger presses on a bottle of Biseptine- children engaging in potentially-harmful activities OTC

30 May 2011 OTC bulletin 15 OTC30-05-11p16-17FIN.qxd 25/5/11 12:11 Page 2

OTC MARKETING NEWS

Line Extensions Wartner pen on mission to write-off verrucas and warts

mega Pharma claims its new Wartner Ver- Oruca & Wart Removal Pen offers Britons a “revolutionary new treatment” that gets vis- ible results up to three times faster than other gels and liquids. The Belgian firm said the medical device’s “innovative pen applicator” ensured that high- ly-concentrated trichloroacetic acid (TCA) gel could be precisely applied on the affected area. A children’s product is the latest addition to Laboratorios Viñas’ Aftum range of mouth-ulcer The TCA gel caused skin to peel and killed treatments in Spain. the virus that produced warts or verrucas, ex- The 15ml tube of paediatric gel joins the existing plained Omega. As this occurred, it added, new Aftum products for adults, which are also based on hyaluronic acid. These include a 15ml tube of gel and healthy skin was formed and the wart or ver- a 150ml bottle of solution, as well as a 20ml bottle of ruca shrank and disappeared without scarring spray sold under the name Aftaspray. surrounding healthy skin. Whilst the adult Aftum products come in red and white packs, the newcomer is supplied in a blue Clinical studies showed that 95% of patients and white pack. reported visible results after one week, Omega Omega Pharma’s latest addition to the Wartner range Pharmacy-press advertising for the Aftum range pointed out, and 65% of warts and verrucas were shows a smiling mother and child accompanied by in the UK is based on an “innovative pen applicator” the slogan “di adiós a las aftas y úlceras bucales” or gone within four weeks of treatment. “say goodbye to sores and mouth ulcers”. By contrast, continued Omega,the efficacy relations activity and an updated “Pharmacy OTC of a treatment with salicylic acid applied every Detail Aid” to help pharmacists become more day over 13 weeks was only 24%. familiar with the wart and verruca problem and Recalls The Wartner Verruca & Wart Removal Pen get a better understanding of how Wartner pro- is available in pharmacies with a recommended ducts work. GSK recalls batch retail selling price of £7.49 (C8.59). A strapline Wartner Verruca & Wart Removal Pen joins on the pack front points out that it is “Effective the established Wartner freeze product, which of new Sensodyne from the first week”. Omega revealed had been reformulated to treat Omega is backing the launch with dedicated both warts and verrucas. ne batch of GlaxoSmithKline Consumer television advertising running until July during Wartner Wart & Verruca Remover now fea- OHealthcare’s Sensodyne Repair & Protect prime-time on various channels including ITV1. tured an improved method that lowered the wart toothpaste has been recalled in the UK. It is part of a £1.5 million launch support pack- or verruca freezing temperature on the skin even The company said the “precautionary mea- age, Omega noted, which also includes public further,Omega pointed out. sure” had been taken because larger particles OTC of one ingredient “may cause gums to bleed”. Launching Sensodyne Repair & Protect in Reckitt Benckiser has extended its E45 Endless Moisture range of skincare products in the UK with Greece and the UK earlier this year,Glaxo- a formulation “Enriched for mature skin”. SmithKline described the toothpaste as “a sci- The company is backing the launch of E45 entific breakthrough in dental care”. The com- Endless Moisture Derma-Restore with a £1 million (C1.2 million) communications campaign pany said at the time that it would introduce targeting “women with mature skin across the product in more than 50 European and in- relevant beauty touch points”. The campaign ternational markets this year (OTC bulletin, encompasses public relations activity, sampling, press advertising and online support. 17 March 2011, page 15). “Over half of female consumers in the adult body Commenting on the reasons for the recall, moisturiser market are 45 plus,” said Reckitt GlaxoSmithKline said it was normal for some Benckiser, “but there are currently few dedicated products for this group.” users to have a slight feeling of grittiness when Eight out of 10 consumers in trials agreed using the toothpaste. However, the company that E45 Endless Moisture Derma-Restore left added, larger particles of one ingredient in the their skin “velvety soft, smooth and supple”, according to the company, and 77% had softer recalled batch “may scratch the gums when skin in just three weeks. brushing the teeth which may cause the gums E45 Endless Moisture Derma-Restore comes to bleed”. in a 200ml pack with a recommended retail selling price of £4.59. A strapline on the front of the pack “Only a very small number of such cases points out that the product is “Enriched for mature have been reported,”added GlaxoSmithKline. skin with vitamin B3”. OTC OTC

16 OTC bulletin 30 May 2011 OTC30-05-11p16-17FIN.qxd 25/5/11 12:11 Page 3

MARKETING NEWS OTC

Line Extensions Twice as fast Aspirin makes a worldwide debut in the US

he greatest innovation in aspirin since average 10% of the particle size of previous “Tthe discovery of aspirin,”is how Bayer Bayer Aspirin tablets”. Consumer Care is positioning new Bayer Ad- “The technology combines a smaller par- vanced Aspirin, which has just made its world- ticle size with a rapidly-disintegrating tablet wide debut in the US. that results in Bayer Advanced Aspirin being Describing Bayer Advanced Aspirin as the quickly available in the stomach and readily “next generation of aspirin for pain relief”, the absorbed,”continued the company. “This com- company said the medicine was “clinically pro- bination helps Bayer Advanced Aspirin dissolve ven to relieve tough pain twice as fast as previ- six times more quickly,enter the bloodstream ous Bayer Aspirin tablets”. four times as fast, and rush relief right to the Although Bayer Aspirin was “primarily syn- site of pain, providing pain relief twice as fast onymous with cardiovascular use” in the US, as before.” commented the company, Bayer Advanced Asp- “The Pro-Release technology helps to speed irin was “a new standard in aspirin for tough up disintegration of the tablet, absorption into pain relief”. the bloodstream and, most importantly,time “A major force in OTC” is how Reckitt Benckiser is positioning itself in a pharmacy-press advertising The company pointed out that Bayer Ad- to pain relief,”said Dr Wes Cetnarowski, senior campaign in the UK. vanced Aspirin was based on “breakthrough” vice-president of global research and develop- Reckitt Benckiser operates in all the main Pro-Release technology,which “reduces the ment at Bayer HealthCare. OTC categories – except weight-loss, allergy and anti-smoking – points out the advertising (pictured aspirin particles into micro-particles that are on Bayer Advanced Aspirin comes in a choice above), adding that the company has an overall of Regular or Extra Strength doses containing market share in the UK “in excess of 20%”. The 325mg or 500mg of aspirin respectively. company is the “biggest television advertiser in the UK for OTC products”, adds the advertising, and is a The newcomer joins the existing Bayer Asp- “market innovator in OTC”. irin range, which is split into three groups: asp- “Central to Reckitt Benckiser’s success is the irin products for cardiovascular use, most of importance the company places on working in partnership with pharmacy teams, which Reckitt which contain 81mg aspirin; pain-relief prod- Benckiser sees as key business partners,” states the ucts based on 325mg or 500mg aspirin; and the advertising. “Additionally Reckitt Benckiser supports Heart Health Advantage formulation, which con- the pharmacist’s unique and important role through educational initiatives, product information and tains phytosterols but no aspirin. expert advice, on merchandising to maximise sales.” According to Bayer,anational survey of over Describing Reckitt Benckiser and pharmacy as a thousand Americans carried out in 2005 had “a winning combination”, the advertising points out “Every UK household will have one or more Reckitt found that 44% of respondents had suffered Benckiser products in the home or medicine cabinet”. from acute pain in the previous two weeks. OTC Aspirin is Bayer Consumer Care’s best-sell- ing brand worldwide, recording sales up by 4.5% to C418 million in 2010. Total Aspirin IN BRIEF sales – including Aspirin Cardio, which is part of ■ PRINCIPLE HEALTHCARE has extend-

Packs of Bayer Advanced Aspirin highlight the the Pharmaceuticals division – were C776 mil- ed its Vitarenew range of “beauty from with- product’s “patent-pending” Pro-Release technology lion (OTC bulletin,17 March 2011, page 5). in” products in the UK with effervescent slim- OTC ming tablets containing L-carnitine and chro- mium. Vitarenew Modèle is supplied in a pack of 20 tablets with a recommended retail selling Launches price of £5.00 (C5.75). The company said it was Perrigo set to launch Ranitidine 150 in US available from supermarket chain Morrisons, selected independent pharmacies and the brand errigo is set to launch a generic version of next financial year,which begins at the end of website at www.vitarenew.com. PBoehringer Ingelheim’s Zantac 150 heart- June 2011, said Perrigo. burn remedy in the US. Quoting data from Information Resources, ■ NELSONS – the UK-based homoeopathy The store-brand specialist said it had obtain- Perrigo pointed out that Zantac 150 had an- specialist – has launched a website providing ed final approval from the Food and Drug Ad- nual sales of approximately US$110 million generic information on homoeopathy and its ministration (FDA) for its Abbreviated New (C78 million). principles. Located at www.healthroughhome- Drug Application (ANDA) for Ranitidine 150 in Dr Reddy’s and Wockhardt already offer opathy, it features a question and answer sec- regular and cool mint versions. The launch was generic OTC versions of Zantac 150. tion by a registered homoeopath. expected to take place early in the company’s OTC OTC

30 May 2011 OTC bulletin 17 OTC30-05-11p18FIN.qxd 25/5/11 12:22 Page 2

OTC MARKETING NEWS

Line Extensions Alcon grows Systane with two for dry eye

lcon has extended its Systane portfolio of ventional tear products on the market. Adry-eye products in the UK with two new According to Alcon, Systane Ultra provided formulations. immediate comfort, enhanced lubrication, ex- Chris Miller,Alcon business unit manager, tended protection, and minimal blur after add- said Systane Ultra Lubricant Eye Drops deliv- ition to the eye. It was suitable for use with con- ered “extended protection from dry eye so eyes tact lenses, added the company, and the 10ml feel comfortable for longer”, while Systane Bal- bottle could be used for up to six months after ance Lubricant Eye Drops was specially for- it had been opened. mulated for dry eye patients with Meibomian Systane Ultra, which is available in a 10ml Gland Dysfunction. bottle or a pack of 30 x 0.7ml preservative-free The two newcomers join the existing Sys- vials, has a recommended retail selling price tane Lubricating Eye Drops, which are avail- of £9.59 (C10.99). Straplines on the packaging able in a bottle or single-dose vials. point out that the “high performance” lubri- Alcon said Systane Ultra’s formulation con- cant eye drops are “long lasting” and provide tained the “same unique polymer system found “extended protection”. “Restorative” and “high performance” formulations in Systane Lubricating Eye Drops, which con- Commenting on Systane Balance, Alcon have been added to Alcon’s Systane brand for dry-eye relief in the UK verts the liquid drop into a thin gel upon con- said it contained the LipiTech system, which tact with the ocular surface, but with special- “restores the lipid layer and stabilises the nat- Systane Balance is supplied in a 10ml bot- ised ingredients which manage the gelling pro- ural tear film for long-lasting protection from tle priced £9.89. Straplines on the packaging cess to reduce blurring”. evaporative dry eye”. “Research shows Mei- state that the “restorative formula” is “for the Systane Ultra’s delivery system of HP-Guar, bomian Gland Dysfunction patients managed temporary relief of burning and irritation due borate and sorbitol, added the company, re-built with Systane Balance showed a significant re- to dryness of the eye”. the tear film for long-term lubrication and ex- duction in the number of drops needed per day,” The lubricant eye drops can be used for up tended protection of dry eye beyond many con- added the company. to six months after the bottle has been opened. OTC

18 OTC bulletin 30 May 2011 OTC30-05-11p19FIN.qxd 25/5/11 12:25 Page 3

EVENTS OTC

JUNE 27-28 June ■ Regulatory Affairs 27-28 October 19-23 June in Africa – Including ■ 17th WSMI General Assembly Puerto Vallarta, Mexico ■ 47th DIA Annual South Africa ‘Achieving the self-care future’ is the theme of the 17th World Self- Meeting London, UK Medication Industry (WSMI) General Assembly. Chicago, Illinois, US Countries that will be covered at Day one of this two-day meeting will include a session on ‘Self-care ‘Convergence of science, medi- this two-day meeting include Al- and self-medication contributions to public health’, while day two will cine and health’ is the theme of geria, Ghana, Morocco, Nigeria, look at Latin America. the annual meeting of the Drug Tanzania and Uganda. Contact:Sophie Durand-Stamatiadis, World Self-Medication Industry (WSMI). Information Association (DIA). Contact: Management Forum. Tel: +33 450 28 47 28. Fax: +33 450 28 40 24. Contact: Vicki Adkinson, DIA. Tel: +44 1483 730071. E-mail: [email protected]. Website: www.wsmi.org. Tel: +1 215 442 6162. Fax: +44 1483 730008. Fax: +1 215 442 6199. E-mail: registrations@management- E-mail: [email protected]. forum.co.uk. Website: www.diahome.org. Website: www.management-forum.co.uk. 5 July ulatory Affairs (TOPRA). ■ POM-to-P Critical Contact:TOPRA. 21 June 27-29 June Success Factors Tel: +44 20 7510 2560. ■ Marketing Authorisation ■ Stepping It Up London, UK Fax: +44 20 7537 2003. in South Africa, Basel, Switzerland A one-day seminar – hosted by E-mail: [email protected]. Australia and A three-day pharmaceutical mar- Mediapharm – analysing factors Website: www.topra.org. New Zealand ket research conference. affecting switches of medicines Frankfurt, Germany Contact: EphMRA. from prescription-only to pharm- SEPTEMBER This one-day conference will look Tel: +41 22 33 99 596. acy (POM-to-P) status. 12-13 September Fax: +41 22 33 99 631. at the pharmaceutical markets and Contact: Zain Philbey, SMi Group. ■ 8th Forum Conference on E-mail: ephmra.reghot@mci- authorisation procedures. Tel: +44 870 9090 711. Marketing Authorisation group.com. Fax: +44 870 9090 712. Contact:Dr Henriette Wolf-Klein, Cologne, Germany Website: www.ephmra.org. E-mail: [email protected]. Forum Institut für Management. Each day of this two-day meeting Website: www.smi-online.co.uk. Tel: +49 6221 500 680. can be booked separately. Fax: +49 6221 500 555. JULY 5-6 July Contact:Dr Henriette Wolf-Klein, E-mail: [email protected]. 4 July Forum Institut für Management. Website: www.forum-institut.com. ■ Marketing Authorisation ■ Pharmaceutical in the Middle East Tel: +49 6221 500 680. Fax: +49 6221 500 555. 27 June Regulatory Affairs Frankfurt, Germany E-mail: [email protected]. ■ Basics of in Turkey Day one of this two-day meeting Website: www.forum-institut.com. Regulatory Affairs London, UK will focus on the regulatory en- Milan, Italy Turkey’s regulatory environment vironment within the Middle East, 21-22 September and application process will be dis- A one-day course from The Org- while day two will cover different ■ Distribution of anisation for Professionals in Reg- cussed at this one-day meeting. products including OTC drugs. Medicines Contact: Management Forum. ulatory Affairs (TOPRA). Contact: Dr Henriette Wolf-Klein, London, UK Tel: +44 1483 730071. Contact:TOPRA. Forum Institut für Management. European Union guidelines on Fax: +44 1483 730008. Tel: +44 20 7510 2560. Tel: +49 6221 500 680. good distribution practice will be E-mail: registrations@management- Fax: +44 20 7537 2003. Fax: +49 6221 500 555. discussed at this two-day event. forum.co.uk. E-mail: [email protected]. E-mail: [email protected]. Contact: Management Forum. Website: www.management-forum.co.uk. Website: www.topra.org. Website: www.forum-institut.com. Tel: +44 1483 730071. 8 July Fax: +44 1483 730008. E-mail: registrations@management- ■ Essential Overview of 8-10 June forum.co.uk. the Pharmaceutical ■ 47th AESGP Annual Meeting Website: www.management-forum.co.uk. Rome, Italy Industry ‘A new treaty for self-care’ will be the theme of the 47th Annual Meeting London, UK OCTOBER of the Association of the European Self-Medication Industry,the AESGP. A one-day seminar for those new The three-day meeting will include a session entitled ‘Self-medication to the pharmaceutical industry. 18-19 October industry quo vadis?’ with Cavan Redmond, group president of Pfizer’s Contact: Management Forum. ■ AESGP Conference animal health, consumer healthcare and nutrition businesses. Tel: +44 1483 730071. London, UK Speakers at the meeting will also include: John Dalli, European com- Fax: +44 1483 730008. This two-day conference – organ- missioner for health and consumer policy; Ferruccio Fazio, Italian min- E-mail: registrations@management- ised by the Association of the Eur- ister of health; Dagmar Roth-Behrendt, vice-president of the European forum.co.uk. opean Self-Medication Industry, Parliament; Noël Wathion of the European Medicines Agency (EMA); Website: www.management- the AESGP – is held in conjunc- Vittorio Silano of the European Food Safety Authority (EFSA); Basil forum.co.uk. tion with the Committee for Med- Mathioudakis of the European Commission; June Raine from the UK’s icinal Products for Human Use Medicines and Healthcare products Regulatory Agency (MHRA); Andy AUGUST and the Co-ordination Group for Tisman, senior principal for Consumer Health at IMS Health; Marta the Mutual Recognition and De- Marchionni of Google Italy; Warren Teichner of McKinsey; and Jul- 11 August centralised Procedures - Human. iane Kleiner of EFSA. ■ Basics of Contact:AESGP. Contact:Association of the European Self-Medication Industry,the AESGP. Regulatory Affairs Tel: +32 2 735 51 30. Tel: +32 2 735 51 30. Fax: +32 2 735 52 22. London, UK Fax: +32 2 735 52 22. E-mail: [email protected]. Website: www.aesgp.be. A one-day course run by The Org- E-mail: [email protected]. anisation for Professionals in Reg- Website: www.aesgp.be.

30 May 2011 OTC bulletin 19 OTC30-05-11p20-26FIN.qxd 25/5/11 12:44 Page 2

OTC STRATEGIES OTCfirms focus on new directions

Procter & Gamble is teaming up with Teva, GlaxoSmithKline is putting itself over. “The other 10% is essentially a selection of about 100 or so fragmented brands, often on a par with the best fast-moving consumer goods firms, and Merck & Co and OTC brands sold in pharmacy, and often only Pfizer are considering their options. Meanwhile, Meda, Reckitt Benckiser sold in one or two countries,”he said, com- and Sanofi have made a string of acquisitions. Deborah Wilkes reports. plaining that “frankly they are a drag on the growth of this business”. GlaxoSmithKline’s Consumer Healthcare elentless is a good way to describe able in the healthcare industry”. division reported sales up by 7% to £5.01 bil- merger and acquisition activity in the Yanai’s counterpart at Procter & Gamble, lion in 2010. The nutritional healthcare and oral consumer healthcare industry over Bob McDonald, pointed out that Teva’s exten- healthcare businesses led the way with sales Rthe past 12 months. Reckitt Benck- sive portfolio in categories such as allergy,gas- rises of 12% and 8% respectively,while OTC iser led the way by acquiring UK-based SSL trointestinal and respiratory would provide a medicines lagged behind with sales growth of International, ’s Paras and a portfolio of pipeline of potential prescription-to-non-pre- 5%. In terms of geographic regions, the Rest of brands from Combe. Moreover, Sanofi snapped scription switches that could become either new the World raced ahead of Europe and the US, as up China’s BMP Sunstone, Poland’s Nepentes lines or extensions to Procter & Gamble brands sales climbed by a fifth to £2.02 billion (OTC and Canada’s Canderm, while Meda completed such as Metamucil, Pepto-Bismol and Vicks. bulletin,11 February 2011, page 7). six purchases including Alaven and Antula. When finalised, the deal will see Procter & When the divestment list of more than 100 Important OTCacquisitions were also made Gamble retain full control of its North Ameri- non-core OTCbrands was released in April, by – amongst others – Adcock Ingram, Atrium can OTC operations, while a joint venture – in many people from both inside and outside of Innovations, GlaxoSmithKline, Hypermarcas, which Procter & Gamble will hold 51% and GlaxoSmithKline were surprised to see the flag- Johnson & Johnson, Omega Pharma, Pfizer, Teva 49% – will combine the two companies’ ship Alli weight-loss medicine (OTC bulletin, Prestige, Taisho and Valeant (see Figure 1). non-prescription operations in all markets out- 29 April 2011, page 1). Procter & Gamble,meanwhile, has taken a side of North America. The joint venture will Alli’s inclusion is seen as GlaxoSmithKline different direction to develop its OTC business. have annual sales of more than US$1 billion finally admitting defeat with the orlistat-based The US-based consumer-goods giant announc- (C700 million) on formation, and Teva believes medicine, which was launched in the US four ed recently that it had signed a “master agree- it could become a US$4 billion business within years ago (OTC bulletin,31 May 2007, page ment” with the world’s largest generics comp- a few years. 16) and in Europe two years ago (OTC bul- any, Israel’s Teva Pharmaceutical Industries, to letin,30 April 2009, page 22). In the US, Alli create a consumer healthcare partnership (OTC Teva will handle manufacturing generated sales of nearly £350 million in the bulletin,31 March 2011, page 1). Teva will also assume global manufactur- period from its launch until the end of the first Shlomo Yanai, Teva’s president and chief ex- ing responsibility for both the joint venture and quarter of 2010, but the brand’s financial per- ecutive officer,insisted the tie-up had the “pot- Procter & Gamble’s North American business. formance has been erratic. In Europe, Alli ach- ential to reshape the entire global OTC market”. As OTC bulletin went to press, details of ieved total sales of £139 million in the year be- He explained that the partnership would enable the collaboration were still being finalised. The tween its launch and the end of the first quarter “two global leaders” not only to combine their two companies expect to close the deal this aut- of 2010. The company did not reveal Alli’s sales businesses and research and development port- umn, subject to regulatory approval. for the whole of 2010, saying simply that they folios,but also to bring together a set of “com- GlaxoSmithKline is another company that were lower in both Europe and the US com- plementary capabilities” that were “unmatch- has unveiled a new direction for its consumer pared with 2009. healthcare operation within the past few months. Alli may be the biggest brand in the basket Chief executive officer Andrew Witty said put up for sale by GlaxoSmithKline, but it is not in February that the UK-based pharmaceutical necessarily the most attractive. After all, if one company intended to get rid of non-core OTC of the top five global OTC players (see Figure brands with combined annual sales of around 2) does not have the marketing and regulatory £500 million (C565 million), representing about clout to succeed with Alli, then who does? a tenth of the Consumer Healthcare division’s From GlaxoSmithKline’s perspective,divest- turnover. The move,he remarked, would enable ing the non-core OTC brands would put the com- GlaxoSmithKline’s Consumer Healthcare divi- pany on a par with fast-moving consumer goods sion – comprising its nutritional healthcare, oral (FMCG) firms, commented Witty. Furthermore, healthcare and OTCmedicines businesses – to he added, reshaping the Consumer Healthcare focus more effectively on “priority or global” division around three priority categories – Nutri- brands as well as its operations in emerging mar- tion, Oral Health and Wellness/OTC – would kets (OTC bulletin,11 February 2011, page 1). give a “tremendous opportunity” to change the Witty pointed out that Consumer Healthcare’s way the division was run. Andy Tisman, IMS Health’s senior principal for priority or global brands – including Lucozade, Bringing in Emma Walmsley from L’Oréal Consumer Health, says GlaxoSmithKline’s new Panadol and Sensodyne – combined with the as the worldwide president designate of Con- direction may be a sign of what lies ahead, as the global OTC industry increasingly polarises around two division’s operations in emerging markets, such sumer Healthcare has underlined Witty’s thirst key business models as India and China, represented 90% of its turn- for change. His moves would enable the divi-

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STRATEGIES OTC

MERGER & ACQUISITION NEWS OTC bulletin Issue Johnson & Johnson’s Cilag to pay US$260 million for OTC assets of JB This issue Takeda Pharmaceutical to pay C9.6 billion for Nycomed excluding This issue its US dermatology business Valeant Pharmaceuticals to acquire Lithuania’s Sanitas for C314 million This issue Akorn to buy US-based Advanced Vision Research for US$26.0 million 13 May 2011 Dabur India to pay undisclosed fee to India’s Ajanta for 30-Plus brand 13 May 2011 Teva Pharmaceutical Industries to pay US$6.8 billion for Cephalon 13 May 2011 Atrium Innovations to gain Canada’s Robert & Fils for undisclosed sum 29 April 2011 Adcock Ingram to acquire NutriLida Healthcare for undisclosed sum 15 April 2011 Kohlberg Kravis Roberts to pay Pfizer US$2.38 billion for Capsugel 15 April 2011 Taisho to buy Malaysia’s Hoe for around MYR370 million 15 April 2011 Alliance Pharma to buy Anbesol and Ashton & Parsons for £2.55 million 31 March 2011 Insight Pharmaceuticals snaps up e.p.t brand for undisclosed sum 17 March 2011 The L’Oréal background of Emma Walmsley, Meda to acquire Antula for SEK1.8 billion 28 February 2011 GlaxoSmithKline Consumer Healthcare’s worldwide president designate, is helping transform the business Pfizer to snap up Ferrosan Consumer Healthcare for undisclosed sum 11 February 2011 Recordati buys Procto-Glyvenol brand for an undisclosed sum 11 February 2011 sion to “operate on a very competitive basis” Valeant Pharmaceuticals to pay C350 million for PharmaSwiss 11 February 2011 against “any FMCG firm”, he said. Atrium Innovations pays C5.5 million plus earn-out for Belgium’s Minami 21 January 2011 Walmsley joined GlaxoSmithKline just over ayear ago. She had previously been leader of Atrium Innovations pays US$110 million for Canada’s Seroyal 21 January 2011 L’Oréal’s Consumer Products business in China. HIG Capital to pay US$75.2 million for Matrixx Initiatives 21 January 2011 Before that, she was based in the US with glo- Hypermarcas to gain Brazil’s Mantecorp for BRL2.52 billion 21 January 2011 bal responsibility for the Maybelline cosmetics Ilex snaps up St Joseph brand in US for an undisclosed sum 21 January 2011 unit (OTC bulletin,31 March 2010, page 1). Omega Pharma buys five brands from Goldshield in UK and Ireland 21 January 2011 Once the divestments had been completed, and French company Terre Santé for a total of C14 million pointed out Witty,Consumer Healthcare would Meda buys five brands from GlaxoSmithKline in two deals 21 January 2011 have “15 strategic brands and a very heavy ex- worth SEK415 million posure to emerging markets”. This profile was Prestige to acquire Dramamine brand for US$76 million 21 January 2011 “very exciting”, he enthused. Reckitt Benckiser grabs Combe brands for undisclosed sum 21 January 2011 Andy Tisman, IMS Health’s senior principal Vemedia acquires Podosan in Spain and Portugal for undisclosed sum 21 January 2011 for Consumer Health, says GlaxoSmithKline’s GlaxoSmithKline to acquire Maxinutrition for £162 million 16 December 2010 new direction may be a sign of what lies ahead, Reckitt Benckiser to buy India’s Paras Pharmaceuticals for INR32.6 billion 16 December 2010 as the global OTC industry increasingly polar- ises around two key business models. Omega Pharma to pay C9.0 million for OTCactivities of Spain’s Inibsa 30 November 2010 On the one hand, companies such as Glaxo- Meda buys three OTC brands from Norgine for SEK540 million 16 November 2010 SmithKline, Procter & Gamble and Reckitt Ben- Sanofi to pay around US$520 million for China’s BMP Sunstone 16 November 2010 ckiser have a “very rigorous focus on a small Omega Pharma pays C3.1 million for ACO food supplement brand 29 October 2010 number of big brands”, says Tisman, noting that Omega Pharma pays C69.0 million for France’s Laboratoire de la Mer 29 October 2010 Reckitt Benckiser calls them powerbrands. On Prestige Brands agrees to pay US$190 million for Blacksmith Brands 29 September 2010 the other hand, he continues, companies like Meda pays SEK190 million for BioPhausia’s Nordic OTC brands 29 September 2010 Bayer,Johnson & Johnson, Novartis and Sanofi Elder Pharmaceuticals to buy NeutraHealth in a deal valuing the 29 September 2010 have “big and diverse portfolios encompassing UK-based company at £12.2 million a range of big, medium and small brands sold Meda to pay US$350 million for Alaven 10 September 2010 through pharmacy and mass-market channels, as well as global, regional and local brands”. Aspen Pharmacare bids A$900 million for the Pharmaceuticals 10 September 2010 division of Sigma Pharmaceuticals More changes of direction? Novartis takes majority stake in Alcon 10 September 2010 Tisman points out that GlaxoSmithKline Vemedia Pharma acquires Sleepzz brand from Liberty Healthcare 10 September 2010 Consumer Healthcare’s new direction coincides Thornton & Ross acquires the Allens brand from Allen & Co 10 September 2010 with the arrival of Walmsley from FMCG giant Teva Pharmaceutical Industries pays C3.63 billion for Ratiopharm 13 August 2010 L’Oréal. He suggests that Sanofi’s appointment Reckitt Benckiser to pay £2.54 billion for SSL International 30 July 2010 of Vincent Warnery as vice-president Consumer The Carlyle Group to pay US$3.80 billion for NBTY 30 July 2010 Healthcare Europe and global development – Sanofi to buy Canada’s Canderm Pharma for an undisclosed sum 30 June 2010 together with the recruitment of senior execu- Valeant Pharmaceuticals to merge with Biovail 30 June 2010 tives with a consumer background at a number Sanofi to pay PLN420 million for Poland’s Nepentes 31 May 2010 of other leading players – might lead to more changes of direction within the OTC industry. Church & Dwight to acquire Simply Saline brand for undisclosed sum 31 May 2010 “A more consumerist approach may become Figure 1: Some mergers and acquisitions involving OTC businesses in the past 12 months (Source – OTC bulletin)

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more widespread,”he says. Despite the relentless merger and acquisi- and the bio-science part of crop science” (OTC Warnery has worked for L’Oréal, Procter & tion activity,several of the leading OTCplay- bulletin,13 May 2011, page 13). Gamble and rum manufacturer Bacardi & Com- ers have not recently found the right deal at Another German company, Stada Arzneimit- pany (OTC bulletin,15 April 2011, page 23). the right price. tel, is also ready to step up its spending on ac- Tisman maintains that neither business mod- Novartis, for example, has made no secret of quisitions this year,as it looks to expand the el is right or wrong in itself. “Each company the fact that it is seeking bolt-on acquisitions to group’s footprint in Eastern Europe and its port- should choose the model that fits best with its expand its OTCbusiness. Joseph Jimenez, Nov- folio of branded products. “The cautious acqui- capabilities, objectives and strategy,” he says. artis’ chief executive officer,said last Novem- sitions policy that we have pursued over the past “The important thing is how companies exe- ber that the Swiss company was prepared to two years will be replaced by an accelerated ac- cute their chosen business model.” spend between US$1 billion and US$2 billion quisitions approach,”promised Hartmut Ret- Another pointer to GlaxoSmithKline’s dir- on such purchases (OTC bulletin,30 Novem- zlaff, chairman of the executive board (OTC ection for Consumer Healthcare is the recent ber 2010, page 5). bulletin,15 April 2011, page 7). acquisition of Maxinutrition from Darwin Pri- A Novartis Consumer Health spokesperson vate Equity for approximately £162 million in- told OTC bulletin that the company was pri- Pursuing three takeover targets cluding repayment of outstanding debt. Glaxo- marily seeking acquisition opportunities in its Retzlaff revealed that the German generic SmithKline noted the UK-based sports-nutrition three core categories – cough/cold/allergy,gas- and OTCgroup was currently pursuing three specialist had generated sales of around £36 trointestinal and pain relief – but would consid- takeover targets, none of which would require million in the year ended April 2010, and had er moving into others. The search would focus Stada to raise additional capital. Among these achieved a compound annual growth rate of ap- on the company’s top 10 OTC markets, added targets were “an Eastern Europe package” and proximately 21% over the previous three years the spokesperson. “an interesting generics target not far from Ger- (OTC bulletin,16 December 2010, page 1). Jimenez pointed out, however, that Novar- many”. Stada had “absolutely no interest” in a The deal added the Maximuscle, Maxifuel tis did not have to make acquisitions to grow rumoured merger with Actavis, he added. and Maxitone brands to GlaxoSmithKline’s nut- its OTC business in the next five years. Retzlaff said the company was looking for ritional healthcare business, which is dominated The business would be boosted by organic brands with “high growth and high margins”. by the Horlicks, Lucozade and Ribena drinks. growth, he insisted, explaining that the comp- Acquiring GlaxoSmithKline’s Eunova vita- John Clarke, worldwide president of Glax- any would focus on growing its existing brands min brand for C12 million was a good example oSmithKline Consumer Healthcare, said the in its three core categories, and expanding its of the type of deal Stada was seeking, Retzlaff deal gave the company a “strong presence in presence in its top 10 markets. Jimenez said the pointed out. Since acquiring the brand in Nov- the fast-developing protein-based sports nutri- aim was for the top 10 markets to account for ember 2009, Stada had been able to increase its tion market” with brands that appealed across around 70% of OTCsales by 2015. They cur- sales from around C6.0 million to slightly over a “broad spectrum of consumers from elite ath- rently generated 60%, he noted. C8.0 million, he said. letes to sports participants and those seeking Meanwhile, Dr Marijn Dekkers, chairman of Stada has since expanded on Retzlaff’s cryp- additional nutritional supplementation”. “Glaxo- Bayer’s management board, recently told ana- tic reference by announcing that it is in exclu- SmithKline will invest behind Maxinutrition’s lysts and the media that the German chemical sive talks to acquire a portfolio of branded pro- science-proven products to extend the growth and pharmaceutical group was “interested in ducts in Central and Eastern Europe and the of Maxinutrition within its UK and European doing acquisitions in healthcare”. He stressed Middle East from fellow German firm Grünen- footprint,” Clarke pointed out, “and expand it to that Bayer’s major focus was on driving org- thal for around C360 million. The portfolio of the global marketplace where GlaxoSmithKline anic growth, but the company was also inter- 14 primarily-prescription products that Stada has existing infrastructure and capabilities.” ested in acquisitions “particularly in healthcare is negotiating to buy includes six of Grünenthal’s own brands and eight licensed products, includ- ing the Flexove/Glucomed glucosamine brand, Johnson & Johnson10 -10.7% the Oekopharm range of nutritional supplements, and a diclofenac patch (see page 3). Nova9rtis +6.0% Stada has also said that it is set to enter nego- Bayer8 +3.2% tiations to acquire Spirig Pharma’s generics busi- ness in Switzerland, and will make a final deci- Sanofi-Aventis7 +8.1% sion on the opportunity within the next three GlaxoSmithKline6 -1.8% months. Spirig’s Swiss generics business includ- ed 15 non-prescription and discretionary pre- Boehringer Ingelheim5 +3.7% scription products, the German company noted, Pfizer4 +3.3% together with 56 prescription products. Annual turnover of the products was estimated to be Taisho3 -1.7% SFr45 million (C36 million). Reckitt Benckiser2 +2.3% Meanwhile, the top man at another German chemical and pharmaceutical company, Merck Merck &1 Co +2.8% KGaA, recently admitted to being frustrated by 01.0 2.0 3.0 01000 2000 3000 the current OTCbusiness environment. Chief Sales (C billions) executive officer Karl-Ludwig Kley said ear- lier this year that Merck KGaA wanted its Con- Figure 2: Top 10 consumer healthcare companies ranked by worldwide sales of non-prescription products in 2010, accompanied by sales growth compared to 2009. Figures are based on value sales at manufacturers’ sumer Health Care business to achieve critical selling prices (Source – Boehringer Ingelheim/IMS Consumer Health’s OTC ReViewPlus) mass on a global scale, but this was “quite a

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difficult exercise” (OTC bulletin,28 Febru- Ingelheim’s Consumer Health Care business. ary 2011, page 2). Speaking exclusively to OTC bulletin,Wright Acquisitions were one way of reaching this said the family-owned German pharmaceutical goal, Kley said, but the company felt that cur- company was prepared to boost Boehringer In- rent prices in the OTC sector were not very at- gelheim’s Consumer Health Care business with tractive. Merck could also look to form part- a big acquisition. “If the right target comes along nerships, seek out individual brand acquisitions, and fulfils our strategic criteria, then Boehringer do product swaps and invest in organic devel- Ingelheim will make an active move,” he prom- opment to grow the division, he ventured. ised (OTC bulletin,29 April 2011, page 18). Kley’s comments came in the wake of an in- However, Wright is a pragmatist. “If you are terview published in the Financial Times news- always looking for the ideal acquisition target, paper. He was quoted as saying that efforts to then you may be disappointed,”he remarked. double the size of the Consumer Health Care In the past, Boehringer Ingelheim has focus- business over the past three years had been hin- ed on supporting Consumer Health Care’s org- dered by high prices of potential acquisitions. anic growth with fill-in acquisitions. The com- Asked whether he would consider selling the pany wanted to “close gaps in specific coun- Consumer Health Care business, Kley was quot- tries and accelerate its presence in core cate- Merck & Co’s chief executive officer, Kenneth Frazier, ed as saying he would “never exclude any op- gories, such as gastrointestinal products and is not ruling out any options for the US-based pharmaceutical company’s Consumer Care business tion” that made “economic sense” (OTC bul- cough/cold remedies”. The aim was to “achieve letin,11 February 2011, page 3). category leadership and obtain a sustainable Enhancing the geographic presence of its A year earlier,Kley had revealed that Merck business in the given country” (OTC bulletin, Consumer Care business is also high on the KGaA’s plan to turn its Consumer Health Care 15 May 2009, page 18). agenda at Merck & Co. Kenneth Frazier,chief business into “one of the top-10 global OTC But Wright said that Consumer Health Care executive officer of the US-based pharmaceu- players by doubling annual sales to C1.0 bil- now had a more flexible approach to acquisi- tical company, said soon after taking up the post lion” by 2012 (OTC bulletin,29 May 2009, tions, particularly when it came to categories in January that the business was “not global page 20) had been dealt a blow during 2009 and brands. “If you restrict yourself to the cat- enough” and did not have the “kind of scale out- when it missed out on two unnamed acquisi- egories you know best and look at the strong side the US” that the firm thought it required tion opportunities (OTC bulletin,17 March brands within those categories,”he observed, (OTC bulletin,21 January 2011, page 3). 2010, page 1). “then you may find they are not up for sale or Speaking at Merck KGaA’s annual results you may have to pick them up along with brands Allows Merck & Co to switch products press conference in February,Kley responded that are not part of your core business.” On a more positive note, however, Frazier to the quotes published in the Financial Times, “We have looked at our core categories and said the Consumer Care business gave Merck insisting that he had never said the Consumer the strong brands within those categories, but & Co the “ability to switch products in the right Health Care business was for sale. The firm “did unfortunately we cannot prise them open,”he context”. Merck & Co had to decide what role not intend to sell” the business, he added. continued. “So we have broadened our sights the business could play in the longer term, he Maintaining a Consumer Health Care busi- to cover other categories. The only way to get remarked, and whether it could be a “signifi- ness “made sense”, Kley insisted, adding that something sizeable is not to restrict yourself cant contributor” to the company. the business was “regionally very strong”, it completely to what you know best.” Frazier added that Merck & Co was evaluat- was profitable and had a positive cash flow. When it comes to enhancing the Consumer ing all options for its Consumer Care business Health Care business’ geographic presence via – including spinning off – but had not set a dead- All the time in the world acquisitions, however, the top priority remains line for deciding the future of the business. Kley refused to put a time line on Consum- unchanged. “Finding the right deal in the US A spokesperson for Merck & Co told OTC er Health Care’s development, saying that as is particularly important,”commented Wright. bulletin that Frazier’s comments did not sig- long as the business maintained a good level “If we want to be a billion-dollar player in the nal a “change in Merck’s strategy” in relation of profitability then it would get “all the time US, then clearly we are not going to achieve that to Consumer Care. The company considered in the world” to become a global player. How- through organic growth and/or switches.” Consumer Care a “valuable business”, added ever,if profits remained at the level seen in Wright said China was second on the list of the spokesperson. 2010, then Consumer Health Care’s develop- acquisition priorities, with Russia close behind. Richard Clark – Frazier’s predecessor and ment would “have to speed up”, Kley warned. In Europe, he added, France and the UK were Merck & Co’s chairman – had continually back- Merck KGaA’s Consumer Health Care busi- important targets. However, he noted that Con- ed Consumer Care after Merck &Co had ob- ness reported an operating profit down by 71% sumer Health Care was “not restricting its tar- tained the business by purchasing Schering- to C14 million in 2010. The company blamed gets” to these countries. Plough for US$41 billion in 2009 (OTC bul- problems in China, impairment losses in Mex- Wright stressed the importance of flexibil- letin,17 March 2009, page 1). ico and a warehouse fire in the UK. These dif- ityin the current business environment, when At the end of April this year,Frazier reiter- ficulties had been compounded by a 28% rise many firms have similar acquisition strategies ated that Merck & Co was considering all op- in research and development expenditure dur- and when buyers can sometimes become sell- tions for the Consumer Care business (OTC bul- ing the 12 months. Sales moved ahead by 1% ers overnight. Outright acquisitions are the fav- letin,13 May 2011, page 5). “We like the fact to C472 million. oured option for Consumer Health Care, he said, that we are seeing 6% growth in Consumer and The frustrations of finding the right deal were but Boehringer Ingelheim might be prepared 7% growth in Animal Health,”Frazier com- also outlined recently by David Wright, senior to consider other ways of enhancing the geo- mented, “and going forward we are just going vice-president and global head of Boehringer graphic presence of the business. to have to look at those businesses to figure out

30 May 2011 OTC bulletin 23 Source OTC F.Pg Col Ad 6/5/11 6/5/11 10:36 Page 1

● Water-based vitamin D3 drops

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STRATEGIES OTC

how they can help us maximise shareholder re- (OTC bulletin,15 April 2011, page 5). turns. I am not ruling anything out.” According to IMS Health’s Tisman, many Pfizer is also considering the options for its parent companies now have a more realistic Consumer Healthcare business, as part of a view of their consumer healthcare offspring wider strategic review of the US-based phar- than they had a couple of years ago. maceutical company. Overseeing this review is Tisman recalls that the OTCor consumer president and chief executive officer Ian Read, healthcare market had been out of favour with who took up the post at the end of last year,fol- some big pharma players up until a few years lowing the abrupt departure of Jeffrey Kindler ago. Some firms, including Pfizer and Roche, (OTC bulletin,16 December 2010, page 1). had even divested their consumer healthcare Read said earlier this month that the results businesses, he notes. of the strategic review of its non-pharmaceu- That changed a couple of years ago, he con- tical businesses – including Consumer Health- tinues, when some pure pharma players decided care – would start to be released during the that they needed to take a broader view of second half of 2011 (OTC bulletin,13 May healthcare beyond human prescription medi- 2011, page 10). cines. “Depending on the company, diversified portfolios now encompass animal health, bio- Pfizer’s president and chief executive officer, Ian Reviewing in a thorough way logics and vaccines, as well as non-prescription Read, says the results of the company’s strategic review of its non-pharmaceutical businesses Asked whether the company had narrowed medicines and food supplements,”he says. – including Consumer Healthcare – will start to be its strategic options with regard to the Animal Companies still clearly see the value of own- released during the second half of 2011 Health, Consumer Healthcare and Nutrition op- ing a consumer healthcare business, insists Tis- erations it gained through its US$68 billion ac- man, but they are more cautious about the level nounced, Takeda said it had accelerated a study quisition of Wyeth in 2009, Read said that the of investment. “Some companies may have de- into whether the company should enter the Chi- company was still reviewing the businesses in tuned compared to two years ago in terms of nese OTCmarket, after forming a new sales and a “thorough way”, and announcements about their focus on the consumer healthcare busi- marketing subsidiary that could import and dis- their futures would begin in the second half of ness,”he believes. “They recognise that while tribute finished goods in the country. In light of the year. “I don’t foresee at some point in the the OTCmarket provides opportunities, it also its new capabilities in China, the firm pointed second half suddenly coming out with a detail- contains challenges.” out that it had prioritised a study into whether ed master plan,”Read cautioned, “but certainly “The OTCmarket continues to thrive,par- its flagship Alinamin brand of vitamin products we’ll lay out decisions we’ve taken and deci- ticularly in the developing world, but compa- would provide a suitable platform for the com- sions we haven’t and the whys and analysis to nies have a more realistic appreciation of its pany to build a presence in the Chinese OTC give a clearer path forward.” potential,”adds Tisman market (OTC bulletin,13 May 2011, page 14). In February of this year,Read challenged Nevertheless, if a major global consumer Fellow Japanese company Taisho Pharma- Pfizer’s Consumer Healthcare unit to prove its healthcare business were to be put up for sale, ceutical is about to complete another OTCdeal worth to the company (OTC bulletin,11 Feb- it would undoubtedly attract a huge amount of outside of its domestic market by acquiring Mal- ruary 2011, page 14), adding that he felt that interest – both from strategic buyers and pri- aysia’s Hoe Pharmaceuticals for approximately both Consumer Healthcare and Nutrition were vate-equity firms – as well as a high price tag. MYR370 million (C85.5 million). Japan’s lead- “strong businesses” with growth potential. Meanwhile, one significant consumer health- ing OTC company said the deal enabled it to Around the same time, Pfizer announced care business is about to change hands, albeit as enter the Malaysian pharmaceutical market “in part of a wider pharmaceutical earnest”, and also to grow its business across Some companies may have detuned deal. Japan’s Takeda Pharma- Asia by using Hoe’s distribution channels to compared to two years ago in terms of their ceutical is set to buy Nycomed sell its existing products (OTC bulletin,15 Ap- for C9.6 billion,after reaching ril 2011, page 1). focus on the consumer healthcare business an agreement with the share- Under the terms of the deal, Taisho is pay- holders of the Swiss company. ing almost five-times Hoe’s annual sales of that it was set to expand its Consumer Health- The deal excludes Nycomed’s US dermatology MYR76 million, which are generated by a care business by acquiring Ferrosan’s Consum- business (see front page). portfolio of consumer and medical dermatol- er Healthcare operation from the private-equity Nycomed’s total OTC sales rose by 3.8% ogy products. Noting that Hoe was the “lead- group Altor 2003 Fund for an undisclosed sum to C433 million in 2010. They accounted for ing local pharmaceutical company in Malay- (OTC bulletin,11 February 2011, page 1). The around 14% of the pharmaceutical company’s sia”, Taisho said that its products were avail- Danish company reported sales of DKr1.14 bil- overall sales, which fell by 1.8% to C3.17 bil- able in more than 40 countries, the majority of lion (C150 million) during 2009, the majority of lion (OTC bulletin,17 March 2011, page 6). which were in Asia. which came from the Consumer Healthcare Takeda has just reported a 3.5% increase in operation. Its brands include the Imedeen oral sales at its Consumer Healthcare business to Expanding its Asian operations skincare products. ¥60.3 billion (C525 million) in the year ended Acquiring Hoe is in line with Taisho’s strat- Read’s evaluation of the Consumer Health- 31 March 2011, driven by better sales of Ali- egy of expanding its Asian operations, which care division is part of an ongoing review of namin vitamin tonics and Benza cold remedies. saw the company buy Bristol-Myers Squibb’s Pfizer’s portfolio, which has already seen the Consumer Healthcare accounted for just 4% of OTC assets in the Asia-Pacific region, exclud- Capsugel drug-delivery business sold to the Takeda’s total group sales, which slipped back ing China and Japan, in 2009 (OTC bulletin, private-equity company Kohlberg Kravis Rob- by 3.2% to ¥1.42 trillion over the 12 months. 30 September 2009, page 1). The US$310 mil- erts (KKR) for approximately US$2.38 billion Shortly before the Nycomed deal was an- lion deal included the rights to the Tempra anti-

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pyretic analgesic and the Counterpain topical lion). The price tag represented more than eight- analgesic, as well as Bristol-Myers Squibb’s times Paras’ sales of INR4.0 billion (OTC bul- Indonesian subsidiary. letin,16 December 2010, page 1). Prior to the Bristol-Myers Squibb deal, the Soon afterwards, Reckitt Benckiser snapped bulk of Taisho’s overseas operation was built up a basket of brands, including the Lanacane around its Lipovitan health drink brand, which skincare line, from privately-owned US firm the company sells through local subsidiaries Combe for an undisclosed sum (OTC bulletin, in China, Hong Kong, Indonesia, Malaysia, the 21 January 2011, page 1). Philippines, Taiwan, Thailand and Vietnam. Reckitt Benckiser’s progress into consumer Releasing its annual results earlier this month, healthcare in recent years has been driven by Taisho said it planned to expand its OTC drug Becht, who will retire as chief executive officer business outside of Japan as it faced up to a in September after 16 years in the role (OTC domestic market defined by a sluggish econ- bulletin, 29 April 2011, page 8). The company omy, greater competition, a changed structure pointed out that ,who will take and the long-term impact of the recent earth- over from Becht, had been one of the architects quake. Establishing Taisho as a leading name of the company’s acquisition of Boots Health- Sanofi is seeking to expand the presence of its Consumer Health Care business in Europe, says in the Asian energy-drinks market was one aim, care International in 2006. That deal transform- Hanspeter Spek, president of global operations at the the company noted, but developing its presence ed Reckitt Benckiser into a global consumer French pharmaceutical company in the entire OTC market across South-East Asia healthcare player. was also a priority (see page 8). Sanofi is another company that has contin- of 2011. Sanofi noted that Allegra Allergy was IMS Health’s Tisman says Japanese com- ued to bolster its Consumer Health Care busi- now its number one OTC brand. panies are keen to develop beyond their home ness over the past year,striking deals in Can- In the run up to the Allegra switch, Chris OTCmarket, which has been flat for several ada, China and Poland. Viehbacher,Sanofi’s chief executive officer, years, and are looking to other countries in the In China, the French pharmaceutical com- noted that Sanofi’s Consumer Health Care busi- Asia-Pacific region. pany acquired BMP Sunstone and its portfolio ness did not have big global brands. Viehbach- of OTC cough/cold and women’s health brands er added that Consumer Health Care was “a Led by Reckitt Benckiser for approximately US$520 million. The pur- local business, so we’ve got very strong posi- Merger and acquisition activity in the con- chase price represented around 3.5-times the tions in Europe, very strong positions in Latin sumer healthcare industry during the past 12 Chinese firm’s 2009 sales of US$147 million America and now we are building good posi- months was led by Reckitt Benckiser,which (OTC bulletin,16 November 2010, page 1). tions in the US and Asia as well”. continued to build its Health & Personal Care Sanofi entered the Chinese OTC market in Meda has just completed its sixth OTC ac- division through high-profile purchases. 2009, when it established a majority-owned joint quisition in eight months (see Figure 1 on page In July of last year,the UK-based consum- venture with Minsheng Pharmaceutical to pro- 21). After three years of investment, the Swe- er-goods company agreed to buy SSL Interna- duce vitamin and mineral supplements (OTC dish company said its OTCbusiness had grown tional for £2.54 billion. The price tag repre- bulletin,30 October 2009, page 15). from a marginal unit into an SEK2.0 billion sented 3.2-times SSL’s turnover of £803 million Over the past 12 months, Sanofi also added (C225 million) sales operation (OTC bulletin, to its Consumer Health Care 13 May 2011, page 10). With so many companies unable to find business in Canada by acquir- Merger and acquisition activity in the OTC the right deal at the right price, more may ing skincare specialist Canderm industry shows no signs of slowing down in the (OTC bulletin,30 June 2010, foreseeable future. Johnson & Johnson’s Cilag follow Procter & Gamble’s lead page 1), and in Eastern Eur- International unit, for example, has just agreed ope, where the company pick- to pay US$260 million for OTC assets, includ- in the year ended 31 March 2010 (OTC bul- ed up Polish OTC firm Nepentes (OTC bul- ing those in Russia, from JB Chemicals & Phar- letin, 30 July 2010, page 1). letin,31 May 2010, page 1). maceuticals (see front page). The deal added the and Scholl brands Earlier this month, Hanspeter Spek, Sanofi’s However, with so many firms unable to find to Reckitt Benckiser’s portfolio, bringing the president of global operations, said the com- the right deal at the right price, more may fol- company’s total number of powerbrands to 19. pany was seeking opportunities to expand its low Procter & Gamble’s lead and take their con- Reckitt Benckiser’s chief executive officer presence in Europe,and mentioned Germany sumer healthcare businesses in new directions. Bart Becht described the deal as a “step change” and the UK as countries where it had little pre- For instance, a surprise bidder for Glaxo- for the company’s global Health & Personal Care sence. A further soft spot was Japan, he said, SmithKline’s basket of non-core OTC brands division. Health & Personal Care’s annual sales adding that Sanofi was keen to switch products could be Perrigo, whose chairman and chief would increase by more than a third to approx- as well as make bolt-on acquisitions (OTC bul- executive officer Joseph Papa recently revealed imately £2.8 billion, he said, adding that the en- letin,13 May 2011, page 7). that the US store-brand specialist was decid- larged division would represent about a third The Allegra (fexofenadine hydrochloride) ing whether to become a fully-fledged brand- of the group’s total turnover. allergy medicine, which has just been switched ed company. Asked whether Perrigo could be The announcement followed years of spec- from prescription-to-OTC status in the US, lies tempted into the branded market, Papa said it ulation that Reckitt Benckiser would bid for at the heart of Sanofi’s switch strategy. The was something the firm was evaluating, but SSL and its Durex and Scholl brands. company said Allegra Allergy had generated he insisted that a “strategic decision to go into At the end of the year,Reckitt Benckiser sales of C80 million in the period between its brands” had not been made (OTC bulletin,13 announced that it planned to buy India’s Paras launch in February (OTC bulletin,17 March May 2011, page 6). Pharmaceuticals for INR32.6 billion (C546 mil- 2011, page 1) and the end of the first quarter OTC

26 OTC bulletin 30 May 2011 OTC30-05-11p27FIN.qxd 25/5/11 12:48 Page 3

PEOPLE OTC

Advertising Agencies Manufacturers TBWA\Paling Walters Regenauer to take helm of gets creative director

BWA\Paling Walters has recruited Dick global unit at Merz Pharma TDunford as executive creative director,fol- lowing the departure of Frank Walters from ans Regenauer will join Merz Pharma Hans Regenauer the agency after 23 years. HGroup on 1 June 2011 as head of a new In a career spanning 20 years, Dunford had global business unit housing the company’s worked at many mainstream consumer agen- Merz Consumer Care, Merz Dental and Merz cies, specialist customer relationship manage- Hygiene operations. He will be a member of ment agencies and digital agencies, TBWA\ the privately-held German company’s manage- Paling Walters noted. ment board. The agency said Dunford would work with In addition to leading the global business managing director Andy Hayley and creative unit, Regenauer will have responsibility for director,copy, Russell Speed to build on its the group’s emerging markets operation, cov- “competency across the whole spectrum of ering all regions outside of Canada, Japan, the health communications”. US and Western Europe. Regenauer is joining Merz from Sanofi’s Dick Dunford OTC business, where he was vice-president past two years. Merz reported Consumer Care Consumer Health Care Europe and global de- sales down by 6.0% to C103 million in the year velopment until 16 May 2011 (OTC bulletin, ended 30 June 2010, (OTC bulletin,16 Dec- 15 April 2011, page 23). ember 2010, page 4). This followed a 4.0% Prior to joining Sanofi in early 2010, Reg- decrease in the previous year (OTC bulletin, enauer was worldwide head of Boehringer In- 30 November 2009, page 8). gelheim’s Consumer Health Care division (OTC Consumer Care’s sales accounted for 15% bulletin,20 January 2010, page 22). of Merz’ turnover in the year ended 30 June At Merz, Regenauer will be in charge of 2010, which improved by 14.2% to C674 mil- the Consumer Care division, which includes lion. The bulk of the company’s sales came the Tetesept range of licensed and unlicensed from its Pharmaceuticals division,which post- medicines and the Merz Spezial health and ed turnover up by 19.4% to C552 million from OTC beauty range. a portfolio of prescription products and non- Sales by the division have declined for the prescription dermatology brands. IN BRIEF OTC ■ BOIRON has announced that Thierry Boi- ron,the French homoeopathy specialist’s gen- eral manager,will become chairman of the board of directors on 1 July. He will switch positions with Christian Boiron,who will become gen- eral manager. The firm has also renewed Phil- ippe Gouret’s mandate as deputy general man- ager and chief pharmacist, while Valérie Poin- sot and Philippe Montant have been named as deputy general managers.

■ RECKITT BENCKISER said that Joanna Speed would step down as the company’s dir- ector of investor relations on 5 October 2011 to pursue other career opportunities.

■ CRN – the US Council for Responsible Nut- rition – has expanded its science team by ap- pointing Dr Taylor Wallace as senior direc- tor,scientific and regulatory affairs. Wallace previously served as scientific communications programme manager at the International Life Sciences Institute, North America. OTC

30 May 2011 OTC bulletin 27