Sanofi to Partner with Digital Health Start-Ups in Europe Track Any More Paras

HEALTH BEAUTY WELLNESS

INSIGHT Pharma intelligence HBWhbw.pharmaintelligence.informa.com 4 February 2019 • No. 06 informa FROM THE EDITORS OF: Rose Sheet Pink Sheet Pharma intelligence Pharma intelligence

“We are excited to partner with Startup Creasphere and their network of start-ups to develop new and innovative healthcare solutions for our consumers, who are looking more and more to the digital space for support that goes beyond the pill,” commented Sanofi Consumer Healthcare’s vice president of strategy, business development and licensing, Oliver Freichel. “As the world becomes more hectic and connected, consumers are demand- ing more personalized healthcare, and we have seen this come to life through concepts such as personalized vitamin re- gimes,” Freichel pointed out. “Within Sanofi, we have strong expertise in bringing over-the-counter healthcare solutions to market,” he noted, “so we look forward to combining these strengths with the ingenuity and innova- Going ‘Beyond The Pill’ – tive mindset of start-ups to help consumers live healthier, fuller lives.” Sanofi To Partner With Digital Plug and Play founder, Saeed Amidi, explained that the partnership with Sanofi would enable Startup Creasphere for Health Start-ups In Europe the first time to explore consumer facing TOM GALLEN [email protected] technologies in the healthcare field. The initiative, Amidi insisted, would provide anofi is taking a leading role in here in association with pharma giant start-ups from all over the world an “un- creating the “ultimate hub of digi- Roche in September 2018. paralleled opportunity for business de- Stal health innovation in Europe” Together, Sanofi and Startup Creasphere velopment and investment activities with through a partnership which will see it will work to create an innovation hub large corporations.” work with start-ups developing new con- “where forward-thinking corporations Sanofi’s tie-up with Startup Creasphere sumer health solutions in categories such and disruptive startups can meet to pilot represents the firm’s latest move into digi- as allergy and nutrition. The France-based solutions and services, drive investments, tal health, which Consumer Healthcare di- manufacturer is partnering with Startup learn and share experiences and facilitate vision head, Alan Main, has identified as a Creasphere, which describes itself as international expansion.” priority for the firm. “Munich’s first digital health focused inno- Startup Creasphere intends to run two vation program.” events annually to evaluate start-ups op- DIGITAL TRANSFORMING Startup Creasphere is backed by Silicon erating in the consumer healthcare field, CONSUMER HEALTH Valley’s Plug and Play, a venture fund with the most promising selected by “Digital is transforming how consumers specializing in the development of early- Sanofi. At the first event, Sanofi will focus manage their own health and, impor- to-growth stage technology start-ups. on working with start-ups in the nutrition- tantly, how they interact with our busi- Plug and Play launched StartUp Creasep- al health and allergy space. CONTINUED ON PAGE 4

HEALTH BEAUTY WELLNESS France And Italy Next For Zur Rose As St. Ives Apricot Scrubbed Of Same Legislative Focus For Sales Exceed $1bn For First Time, p.4 Class Action Alleging Harm From Consumer Health As Its Hill Walnut Shells, p.16 Champions Change, p.19 IN THIS ISSUE In association with Sponsored by Supported by

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20 22 10 inside: COVER / Going ‘Beyond The Pill’ – 21 couple more subheads would take care of this space, can’t Sanofi To Partner With Digital Health Start-ups In Europe track any more paras

22 Implied Health Claims Ruling Indicates Health Tougher Stance By UK Ad Regulator 4 France And Italy Next For Zur Rose As Sales Exceed $1bn For First Time 23 Asking For Trouble – Posing A Question Lands Cranberry Supplement In Hot Water With Italian Ad Regulator 5 Perrigo Helping Pharmacists Get Over Misconceptions About Sleep Aids With UK Nytol Campaign

7 Nestlé Expands Skin Health In Asia As Rumors Swirl Of Impending Sale exclusive online content

8 Dr Kade Enters OTC Dermatology Space With Sirius Acquisition Health And Wellness Launches: Enviromedica, Garden Of Life, Mineralife, Bimble, Chobani, GT, Chomptown, More 9 Colgate Total Remade Without Triclosan, https://bit.ly/2DLDo1u Launch Kicks Off With Super Bowl Ad Chobani introduces first line of non-dairy, plant-based yogurts; Mineralife in CBD market with MG Labs brand; Silk 11 Colgate Guidance Rides Price Increases, dairy-alternative line expands with Oat Yeah milk; Garden Earnings Outlook Dips On Higher Costs of Life extends to keto; Aloha protein powder reformulated; Arthrocen joint supplement in US; Chomptown Cookies from 11 J&J Consumer Health Has Digital And Natural pea protein; GT is Good! on protein bars; Bimble bubbles Drivers For ‘Above Market’ Growth with CBD; Enviromedica innovates in microbiome; and sweet potato and cayenne-infused date nectars from D’Vash.

Beauty Wellness Market News: Nuritas-Pharmavite Peptides, Abbott Nutriton, Brain Armor, Trade Group Notes 12 P&G Raises Forecast On Strong First Half, https://bit.ly/2DMRb7V Notes Price Increases As Potential Drag Pharmavite tests bioactive peptides with Nuritas’ AI platform; NPA questions FDA proposal to share data collected from 14 FTC’s Claimed Authority To Chase Permanent Injunctions, US firms; NFL great Randy White promotes Brain Armor Monetary Relief May Lack Substantiation supplements; Abbott Nutrition sales up 4.4% for 2018; ONHA targets expanding omega-3 testing among consumers; 15 Perfect Cosmetics Misquotes Media Endorsements In UK CRN’s Mister, Sidley’s Bass co-chair regulatory conference; and ‘Hero for the Planet’ Plotkin speaks at AHPA meeting. 16 St. Ives Apricot Scrubbed Of Class Action Alleging Harm From Walnut Shells Health, Beauty And Wellness News: FDA Shutdown, Kemin Marketing VP, More https://bit.ly/2MI6VMl Wellness FDA cosmetics operations likely shuttered with shutdown; 17 Wellness Research Round-up: Probiotics, Vitamin D Supps, Stomp leads Kemin’s global marketing; Unilever delivers Haskap Berry Extract and Caffeine For Combat Sports on fragrance transparency pledge; Lentein protein to Canada through CK Ingredients; and Deciem founder 19 Same Legislative Focus For Consumer Health Truaxe dead at 40. As Its Hill Champions Change

20 Farm Bill Hemp Provision Lights Another Supplement Industry Regulatory Priority HBW-Insight @HBWInsight

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ness,” Main stated at the Viva Technol- ogy conference in Paris, France, in 2018. Main said digital technology – particu- larly the internet – offered a great opportunity for Sanofi to transform how it marketed and sold its products to consumers. (Also see “Digital Key To Sanofi’s Growth Plans” - HBW Insight, 8 Jun, 2018.) Key to Sanofi’s burgeoning digital strategy was utilizing the data trail consumers left behind when searching online, Main explained. “Data is at the heart of all the things we are doing. It’s all about data,” he “Consumers are looking to the digital space for support insisted. “If the consumer is our king, then that goes beyond the pill” - Sanofi’s Oliver Freichel data is our queen.” “By using data to understand our consumer better, we can deliver the personalized content that they expect,” information, and provide an insight on tor appointments, key health deadlines Main claimed. wellness issues.” (Also see “Sanofi Target- and pharmacy home delivery services,” To help Sanofi take a larger slice of the ing Online With Partner Accenture” - HBW Sanofi explained. “A content hub will online consumer healthcare market it has Insight, 8 Jun, 2018.) also provide educational health advice since June been partnering with consul- According to Sanofi, UWell is an “open from experts.” tancy firm Accenture. service and content platform that allows While the UWell platform would The focus of the collaboration is Sano- users to upload their health data in a sin- “initially focus” on Italy, Sanofi said its fi’s Italian UWell online platform, which gle place.” longterm strategy was to “build out the has been developed with Accenture to “The platform enables quick access to platform across a number of markets in “simplify consumers’ approach to manag- doctor and pharmacy services includ- the future.” ing their health, provide easy access to ing the ability to set reminders for doc- Published online 25 January 2019 France And Italy Next For Zur Rose As Sales Exceed $1bn For First Time

DAVID RIDLEY [email protected]

wiss supply chain disruptor Zur Rose is pushing ahead with its goal of be- Scoming the biggest pan-European e-commerce pharmacy, eying up expansion into France and Italy through its new Promofarma retail platform. Speaking to HBW Insight as Zur Rose announced its financial results for the year ended 31 December 2018 – which saw group turnover grow by 22.8% to CHF1.21bn ($1.22bn) – chief executive officer Walter Oberhänsli confirmed that France and Italy would be the “initial focus” for the recently acquired Promofarma vehicle. Snapped up for an undisclosed sum in 2017, Spanish e-commerce platform Pro- mofarma presented Zur Rose with an opportunity to use digitalization to realize its One of Zur Rose’s Swiss goal of becoming the biggest pan-Euro- ‘Shop-in-shop’ retail outlets

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pean e-commerce pharmacy in a “much faster, much easier” way, Oberhänsli said To Ban Or Not To Ban in an interview last year. (Also see “Zur Rose’s European playpen” - HBW Insight, 19 German pharmacists’ association, ABDA, is no longer calling for a ban on mail-order Oct, 2018.) sales of prescription medicines, because it says there is “no longer any prospect” of Rather than having to establish a physi- implementing such a policy change within the current federal parliament. cal presence in a new country and deal The German Minister for Health, Jens Spahn, in December revealed that he was with the complexities of national phar- no longer pursuing a ban as it presented too many legal problems from a local and macy regulations, Promofarma’s platform European point of view. technology allowed Zur Rose to work with ADBA is now throwing its weight behind Spahn’s proposals to introduce e-pre- existing pharmacies in target markets, he scriptions in Germany, pushing for pharmacists in the country to have a say in how explained, connecting them with con- these proposals are implemented. sumers via the platform. This has led to an interesting situation, in which ABDA and Zur Rose – after As to which of the two markets would being arch-enemies for the last few years – now agree on something, albeit for be first to see the platform launch, Ober- opposing reasons. hänsli said that different “country-specific Oberhänsli has also been an enthusiastic supporter of e-prescriptions, arguing factors” would play a role in such a deci- last year that their introduction in Germany would make it easier for patients to sion, with the firm currently examining buy their OTC and prescription drugs online at the same time, making the mail- these factors carefully. order channel more attractive. While Oberhänsli couldn’t comment further on the details of the French and Italian Promofarma expansion, he re- Zur Rose’s lower organic growth of 6.3% proach to digital supply-chain disruption vealed that the platform’s existing busi- for the group, Oberhänsli said this fig- in the country. ness in Southern Europe would also be ure was nevertheless in line with the In cantons where doctors aren’t allowed “driven forward” in 2019. firm’s strategy. to supply drugs to their patients directly, Turning to Zur Rose’s 2018 financial per- Prescription medicines contributed Zur Rose has been pushing forward with formance, in its largest market, Germany, the rest of Zur Rose’s total German turn- its ‘omnichannel’ approach, which in- the firm reported OTC sales up by 79.3% over for the year, which grew by 38.9% volves opening bricks-and-mortar stores to CHF369m, despite intensified price to CHF671m. within Migros-branded supermarkets and competition for OTC products. Meanwhile in Switzerland, Zur Rose’s offering consumers the same prices on This impressive growth was in part driv- retail business grew by 4.3% to CHF133m, OTC and prescription drugs as it offers on- en by Zur Rose’s acquisitions during 2018, with the firm attributing the rise to the line in other countries, such as Germany. which Oberhänsli claimed had made it opening of a third ‘shop-in-shop’ retail The remainder of Zur Rose’s Swiss sales “by far” the leading player in the German outlet in Zürich, in addition to the two al- in 2018 came from supplying self-dispens- online OTC market. (Also see “Zur Rose ready open in Bern and Basel. ing doctors in cantons where this was al- swallows up another German rival” - HBW For regulatory reasons, consumers in lowed. Turnover from these wholesale op- Insight, 2 Nov, 2018.) Switzerland are not able to buy OTC drugs erations increased from 5.5% to CHF389m While acquisitions and a reduced directly from e-pharmacy. Zur Rose has, in the 12 months. spend on marketing activities explained therefore, had to adopt a different ap- Published online 28 January 2019 Perrigo Helping Pharmacists Get Over Misconceptions About Sleep Aids With UK Nytol Campaign

DAVID RIDLEY [email protected]

ound mind, sound sleep,” is the ta- explaining the mental health benefits of them to identify customers with sleep gline for Perrigo Co. PLC’s new UK good sleep and an information leaflet that problems and to have confident conver- “Strade marketing campaign for its debunks myths surrounding the addic- sations with them on the subject of sleep.” leading sleep-aid brand Nytol, which aims tiveness of OTC sleep-aids. “As category champions for sleep, and to drive sales of the range through phar- Speaking as the firm launched its cam- as consumers are increasingly mindful macy by helping pharmacists have better paign, Perrigo’s head of marketing, Laure of their sleeping habits and overall well- conversations with consumers about sleep. de Brauer, told HBW Insight that the strat- ness,” she continued, “we have developed Perrigo’s campaign includes a pharma- egy for Nytol was focused on “supporting educational tools with tips to advise cus- cy training program beginning this month pharmacies with training aids that allow tomers on how to manage, prevent and

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treat poor sleep from a broader lifestyle “Regular daytime exercise – not at perspective.” night as it can raise adrenaline lev- “We are also continuing to focus on els – can also help reduce anxiety and helping to overcome the barriers we re- stress levels,” he adds. Perrigo said that alise pharmacists can face when recom- its pharmacy-focused campaign would mending sleep-aid products,” she added, be supported by a “light-hearted yet “including misconceptions around side empathetic” consumer marketing cam- effects and the fear of addiction.” paign, with television and out-of-home advertising running from mid-January ADDRESSING MISCONCEPTIONS Nytol One-A-Night dipehnhydramine, until March. ABOUT OTC SLEEP AIDS above, and Nytol Herbal, below. Alongside its traditional media pres- One way in which Perrigo is trying to ad- ence, Perrigo said it would be also running dress these misconceptions is via an infor- its existing social media campaign with mation leaflet for pharmacists and phar- the hashtag #SayGoodNytol on digital macy staff entitled ‘Unmask The Benefits channels. Of OTC Sleep Aids.’ “The television, outdoor and digital ad- “Because OTC sleep aids can be effec- vertising campaign is a continuation on tive in helping patients achieve better from the success of our 2017 creative,” de sleep, they are often thought to have the Brauer said, “which is based on our com- same negative effects associated with pre- missioned research that reveals millions scription sedatives,” explains sleep expert of British consumers struggle to sleep as Dr Neil Stanley in the leaflet. or deprivation increases the risk of develop- they lie awake thinking about a plethora “However, this is not the case,” he notes. ing mental health issues and may even di- of different worries.” “While no drug is free from side effects, rectly contribute to their development.” One of Perrigo’s ‘Night Tales’ series of OTC sleep aids, because of their distinct However, by improving sleep, Stanley adverts – which de Brauer noted were pharmacology, are associated with fewer maintains that the symptoms of mental “designed to make this common issue re- serious side effects and have a lower risk health problems can be alleviated. latable to sleep sufferers” – features Cliff, of dependency.” “Good sleep is one of the most effec- who a voice-over explains is “lying awake Prescription sedatives, Perrigo’s leaflet tive ways of dealing with stress,” he insists. worrying about how much time he has points out, contain benzodiazepines like “Therefore, treatment of mental health left to sleep.” diazepam, which are “well-known to carry issues should be aimed at both reduc- Part of the company’s biggest ever mar- the risk of both physical and psychologi- ing the mental health symptoms as well keting spend on the brand – £2.4 million cal dependence.” as employing strategies to improve the in 2017 – Perrigo’s Night Tales series also Perrigo’s Nytol One-A-Night and Nytol quality of sleep.” features a creative for the Nytol Anti-Snor- Original, by contrast, both contain the As well as recommending OTC sleep- ingThroat Spray. non-addictive antihistamine diphenhydr- aids such as Nytol, Perrigo suggests that In this TV spot, Cliff is pictured once amine hydrochloride, while the Nytol pharmacists can encourage consumers to again lying in bed unable to sleep, this Herbal range uses the naturally occurring take a “holistic lifestyle approach” to man- time worried that his snoring is keeping valerian root as its main active ingredient. aging their sleep problems. his neighbors awake. To help pharmacists advise customers “Calming music, mindfulness practices The Nytol range in the UK includes the on how to manage, prevent and treat poor such as meditation and breathing tech- diphenhydramine-based Nytol One-A- sleep from a broader lifestyle perspective, niques, taking a warm shower and reduc- Night and Original products – which con- Perrigo is also educating pharmacists via ing consumption of stimulants such as tain 50mg and 25mg of the active ingredi- a pharmacy training program on the con- alcohol, sugar and caffeine before bed ent respectively – the valerian root-based nection between sleep and mental health. time” are all examples of good advice Nytol Herbal One-A-Night, Herbal Tablets “Sleep and mental health are closely con- pharmacists and pharmacy staff can give and Herbal Elixir, as well as the Nytol Anti- nected,” Stanley explains in the press release consumers looking to improve their ‘sleep Snoring Throat Spray. for the training program. “Sleep disturbance hygiene,’ Stanley continues. Published online 25 January 2019

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Nestlé Expands Skin Health In Asia As Rumors Swirl Of Impending Sale TOM GALLEN [email protected]

estle SA is expanding the reach Nestlé Skin Health in Asia in Asia of its Skin Health business, despite being midway through Nestlé Skin Health has a presence on the ground in 11 markets across Asia, including the nine N highlighted below, plus Singapore and Hong Kong. a wide-ranging strategic review of the unit. The news comes against a backdrop of media reports claiming numerous private-equity suitors are lining up to bid for Skin Health in an impending auction. Announcing the opening of Skin Health’s first office in Malaysia, Nestlé said the move would help it to more effectively tap into the “ever-growing potential” of the market, and accelerate the business’ growth in the wider Asia region. This potential was evidenced by “par- ticularly favorable category growth” for sensitive skin-care products in Malay- sia, Nestlé pointed out, buoyed by an upward trend in consumer spending among the country’s 30 million-strong population. “The decision to further expand in South-East Asia and open a dedicated affiliate was a logical step in our busi- China India Indonesia Japan Korea Malaysia Philippines Taiwan ness growth strategy,” commented Fra- Thailand ser Halscheid, Nestlé Skin Health’s head Data source - Nestlé of Asiana. “We believe it is important to establish to acquire the business for around Skin Health would be sold. However, the an on-the-ground presence given how ac- CHF7.0bn ($7.0bn), citing sources fa- analysts noted that were the rumored tive we are in the market,” Halschied insist- miliar with the matter. $7bn price tag reached, the cash could be ed. “Our dedicated local team will allow used by Nestlé to fund its recent licensing us to establish even closer ties with our SKIN HEALTH ENTICING deal with Starbucks. customers here and better understand PRIVATE-EQUITY While Nestlé has declined to comment the nuances and needs of skin health con- Cinven and Advent – who in 2017 went on these rumors, a disposal of Skin Health sumers in the country.” head-to-head to snap up Germany’s Sta- seems likely, with the company admit- Skin Health already operates in several da Arzneimittel AG – were said by Reuters ting as it launched the review that the markets across South-East Asia, including to have teamed up for a joint bid, with business’ future growth opportunities “lie Indonesia, Singapore and Thailand. Blackstone, KKR and Carlyle also expected increasingly outside the group’s strategic With Nestle now on the ground in to make an offer. Industry players such as scope.” (Also see “Nestlé Puts Skin Health Kuala Lumpur, consumers and health- Johnson & Johnson, L’Oreal SA and Bei- On The Chopping Block” - HBW Insight, 5 care professionals in Malaysia could now ersdorf AG “might” also take part, accord- Oct, 2018.) expect an “even broader range of inno- ing to the report. Skin Health markets a portfolio of OTC vative skin health solutions developed to Information memorandums on the sale and prescription skin-care products, in- protect, serve and enhance skin health,” would be sent out by the end of January, cluding the Cetaphil, Differin and Proactiv Nestlé said. Reuters claimed, with the sale process ex- consumer healthcare brands, and gener- The Swiss food and drinks giant an- pected to kick off in March. ated sales of CHF2.7 billion (€2.4 billion) nounced its move into Malaysia one Reacting to the Reuters report, Mor- in 2017. Headquartered in Lausanne, Swit- day after Reuters reported private- gan Stanley analysts said in a research zerland, the business employs more than equity firms were “circling” Skin Health note they were not currently assuming 5,000 people across 40 countries.

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Skin Health’s financial performance in 2017 was “materially below the initial Nestlé Skin Health's Global Sales business plans,” Nestlé noted in its annual Nestlé Skin Health's global sales split by business segment and by region report, adding that it had recorded a good- Sales By Business Segment will impairment charge at the unit “to reflect the current prospects of the business.” Previously, Nestlé revealed it was working to “aggressively right-size” Skin Health Prescription 25.00% as the business was suffering from a host of “self-inflicted issues.” Between 2012 and 2016, Skin Health had been “over reliant” Consumer 43.00% on the earnings stream generated by its patent protected prescription products, on the back of which the business had begun to “expand very aggressively into consumer skin-care products.” Aesthetics 32.00% EXPANSION ‘OVERLY AGGRESSIVE’ The expansion had been overly aggressive, Sales By Region the firm noted, and when the patents on a number of prescription lines expired, the business’ main source of income “fell away.” While Skin Health’s future remains un- certain, Nestlé has made clear that its Health Science business – which focus- es on medical nutrition and consumer North America 49.00% health products – forms an integral part International 51.00% of its strategy. Nestle Health Science recently struck a deal with US-based nutraceutical player ChromaDex Corp. to tap into the growing healthy aging market globally as it looks to increase its presence in consumer healthcare. Published online 25 January 2019 Based on 2017 sales of CHF2.7bn. Source - Nestlé Dr Kade Enters OTC Dermatology Space With Sirius Acquisition

DAVID RIDLEY [email protected]

erman firmDr Kade has acquired 100% of the share capi- maintaining, producing and promoting their quality of life – and tal of skin-care specialist Sirius Gmbh in a move that it that’s exactly what we can do for people with skin problems.” Gsaid would open up opportunities in the “high-growth” By combining their relative strengths, the deal would “create global market for OTC dermatology products. synergies” that would benefit both firms, Dr Kade said. According to the terms of the all-share acquisition, Dr Kade ex- Dr Kade’s “strong partnership” with proctologists and gynecolo- plained that Sirius – which owns and markets the Siriderma Med gists would complement Sirius’ dermatology expertise, the firm range of OTC neurodermatitis and psoriasis treatments in Ger- noted, while Sirius’ strong online sales presence in “selected phar- many – would remain a legally independent company operating macies and health-food stores” would “open up new sales poten- from Monheim am Rhein. tial” for Dr Kade. “For Dr. Kade, the acquisition of Sirius is another strategic mile- Sirius offers German consumers three main product lines de- stone,” argued Dr Kade’s managing director, Felix König. “Our pending on their skin type: Siriderma Med, for problematic, irri- stated goal is to make people’s everyday lives better and easier by tated, extremely dry and allergy-prone skin; Siriderma Pure, for de-

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Sirius’ Siriderma Med Range

Dr Kade’s KadeFungin Women’s Health Product

manding, dry or older skin; and Siriderma Care, its “basic” skin-care disclosed sum, including the Femikliman menopause treatment, range suitable for any skin type. Luvased sleep aid, Silicur liver-health line and Vitaferro iron defi- All Siriderma products are alcohol-, preservative- and paraffin- ciency product. (OTC bulletin, 3 February 2017, page 3) free, and also vegan. According to Sirius, its products have been Noting the move was an indication the company was “invest- awarded a “seal of approval” from the UK-based Vegan Society. ing in future growth,” Berlin-based Dr Kade said that following Marketing its products in more than 20 countries, spanning the deal herbal medicines would account for around 10% of its from Eastern Europe to Asia, Dr Kade’s OTC portfolio includes the annual OTC sales. Riopan and Pantozol Control gastrointestinal remedies, Kade- Previously, Dr Kade had acquired Takeda Pharmaceutical Co. Fungin women’s health brand, Posterisan and Faktu Lind hemor- Ltd.’s range of OTC brands in Germany for an undisclosed sum rhoid creams, and Buer and Sanostol dietary supplement ranges. (OTC bulletin, 12 April 2013, page 14). The deal included the Buer, Dr Kade expanded its OTC portfolio in 2017 by snapping up Riopan and Faktu brands. six herbal medicines from fellow German firm Hexal for an un- Published online 24 January 2019 Colgate Total Remade Without Triclosan, Launch Kicks Off With Super Bowl Ad

EILEEN FRANCIS [email protected]

olgate-Palmolive Co. reformulated its Colgate Total toothpaste without triclosan and is supporting the product’s Claunch with a 30-second spot during the Super Bowl and heavy in-store advertising. With Colgate Total SF, “we are reinventing the multi-benefit category that Colgate created, reinvigorating an anchor brand and driving consumer engagement, trial and market share,” said Chief Operating Officer Noel Wallace during the firm’s earnings briefing on Jan. 25. Colgate, which launched Colgate Total after receiving approval for a new drug application in 1997 for an indications of prevent- ing gingivitis, plaque and cavities and fighting tartar, added “SF” to Colgate Total SF contains active ingredient stannous fluoride 0.454%, the brand name for stannous fluoride 0.454% replacing triclosan replacing triclosan. as the active ingredient. Clinical studies on the formula demonstrated the product reduces plaque 21.9% over non-antibacterial In consumer testing, consumers have responded “very good” to fluoride toothpaste over a period of six months and 30.3% over six the higher pricing of the product, said CEO Ian Cook. months, the firm says. Although Cook, asked why the firm replaced triclosan, said the The formula “improves upon the previous version, pro- formula is simply better than the one with triclosan, it is more likely viding several new benefits, including a sensitivity benefit Colgate felt pressure as triclosan safety has been scrutinized in re- across all variants, instant neutralization of odors associated cent years. with bad breath, the ability to seek and fight bacteria for FDA has questioned triclosan’s links to cancer, its impact on thy- enamel protection and a new cooling agent for lasting fresh- roid function and its contribution to antimicrobial resistance. In a ness,” Wallace said. The formula also strengthens enamel and 2016 final rule, FDA designated triclosan, triclocarban and 16 other whitens teeth. antimicrobial substances as not generally recognized as safe and

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A Colgate Total SF 30-second spot airing during the s Super Bowl LIII features actor Luke Wilson, above on left, getting close to other that, we are getting extraordinary support from our retail partners coworkers and to the camera, right, to show the toothpaste’s oral in terms of shelving and in terms of off-shelf display to generate health benefits. the trial of the product.” Advertising for all products in its portfolio will be up “meaning- effective in consumer antibacterial soaps, though its use in other fully” in 2019, both on an absolute basis and as a percent of sales types of personal care products including toothpaste is allowed. versus 2018. Though the firm did reveal its full year advertising Some of Colgate’s competitors had already reformulated triclo- spending, its fourth quarter investment in marketing was $376m. san-containing items years before FDA’s rule. Procter & Gamble “We will continue our efforts to drive greater effectiveness and -ef Co. pledged in 2013 to reformulate all its personal care products ficiency in our advertising spending by improving the impact of our containing triclosan, including swapping it out as the active in- advertising, shipping advertising dollars into higher ROI media and gredient in its Crest toothpaste and replacing it with stannous reducing nonworking media expenditures.” Cook said the firm is fluoride. The firm touts its Crest Pro-Health toothpaste (stannous placing incremental advertising spending on top of line extensions. fluoride) as being “triclosan-free.” Johnson & Johnson committed “We’re maintaining advertising support on the equity and we’re to removing triclosan from all its personal care products in 2011. adding advertising to drive awareness and trial, which gets repeat Colgate as recently as 2014 released public statements sticking and then builds into a virtuous cycle of continuous growth,” he said. by its toothpaste safety and arguing triclosan works better than the Colgate will initiate a “substantive acceleration” in digital mar- active ingredients in competitor toothpastes in reducing germs. keting moving into 2019, similar to 2018, which should have an However, as consumer advocacy groups such as the National Re- impact on the firm’s ecommerce shares, Wallace noted. sources Defense Council advised consumers to avoid all products The firm has said its ongoing cost savings program, aiming for containing triclosan, Colgate likely felt pressure to reformulate. $500m to $575m by the end of 2019, will help fuel its increased marketing spend. Morningstar analyst Erin Lash estimates Col- SUPER BOWL ‘CLOSE TALKER’ AD gate will direct about 12% of sales (more than $2bn annually) to Colgate will promote Colgate Total SF with a “meaningful increase research, development and marketing, “a modest bump relative in brand-building activity,” Wallace said. That effort will include a to the past decade but not too dissimilar from peers.” “record number” of in-store displays and a 30-second spot that In a Jan. 25 research note, Lash viewed favorably the com- will run during the third quarter of the National Football League’s pany’s strategy of enhancing spending on product innovation Super Bowl LIII on Feb. 3. The spot, called “Close Talker,” will feature and advertising as a way to withstand competition longer term. actor Luke Wilson following coworkers around an office and an- “This spending appears to us even more prudent presently, given noying them by getting very close to talk about the oral health that Colgate is opting to raise prices across its portfolio,” she said. benefits of Colgate Total SF. “When higher prices accompany new products aligned with con- “We have advertising that we know is persuasive and motivat- sumer trends, volume degradation has historically persisted.” ing and cutting through with consumers,” Cook said. “Op top of Published online 27 January 2019

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10 | HBW Insight | 4 February 2019 © Informa UK Ltd 2019 HEALTH (OTC DRUGS)

Colgate Guidance Rides Price Increases, Earnings Outlook Dips On Higher Costs EILEEN FRANCIS [email protected]

rice increases Colgate-Palmolive Co. plans during 2019 are 2018 NORTH AMERICAN SALES UP 7.4% behind its 2%-4% organic revenue growth estimate, but Colgate’s 2018 net sales were flat, up 0.6%, at $15.54bn. Its total Phigher commodity costs also prompted the firm to lower its operating profit for the quarter fell 7.1% to $891m and was flat for full-year earnings-per-share guidance, which analysts worry will the year, off 0.4%, at $3.69bn. hammer its share price. North American sales, excluding pet foods, increased 5% to During Colgate’s 2018 full-year and fourth-quarter earnings brief- $839m, with volume increasing 3%. The business benefited from ing Jan. 25, CEO Ian Cook noted the firm also estimates net revenues professional skin care acquisitions, which contributed 5% to sales would be down 2% to $3.81bn due to losses to foreign exchange. and volume growth. Operating profit in the region, which ac- Two-thirds of price increases coming in 2019 are either addi- counts for 22% of the firm’s total sales, fell 7% in the quarter to tional hikes for products the firm began in 2018 or planned in the $257m due to an increase in selling, general and administrative relaunches of the Colgate Total and the Hill’s Science Diet dog food expenses. Colgate Optic White Stain Fighter, Colgate Optic White lines, Cook said. “The net result,” he said, is Colgate forecasts gross Stain-Less White and Tom’s of Maine toothpastes all performed profit to increase between 30 and 50 basis points. well, Colgate said. For full-year 2018, Colgate’s net sales in North The firm is relaunching Colgate Total toothpaste in 2019 with America increased 7.4% to $3.35bn. Colgate Total SF, formulated with stannous fluoride instead of Latin American market sales – 23% of Colgate’s business – in the controversial ingredient triclosan. quarter slipped 9% to $887m as foreign exchange had a 10% neg- The planned relaunch of its Hill’s pet food line will further ex- ative impact. The firm reported market share gains in Guatemala, pand Colgate’s “naturals” lines outside the US under brands in- Dominican Republic, Panama, Chile, El Salvador and Nicaragua cluding its Colgate and Palmolive namesakes. Cook said through although full-year sales declined 7.2% to $3.6bn. December, the firm offered natural toothpastes in 79 countries. Net sales in Europe, which accounts for 16% of sales, fell 2.5% in “We continue to expand our natural offerings in toothpaste the quarter to $594m, slowed by a 3.5% loss to foreign exchange; based on local insights, with the launch of charcoal variants for the year, net sales in the region increased 4.5% to $2.5bn. across many countries with encouraging early results,” he said. In Asia Pacific, where Colgate reports 16% of its sales, net In the UK, Colgate launched the Sanex Zero% line formulated sales decreased 6.5% to $628m, with foreign exchange having without parabens, colorants or soap; it is expanding its Palmolive Na- a 5.5% drag. Full-year sales slipped 1.7% to $2.73bn. tureza Secreta personal care line across Latin America, the CEO said. Published online 27 January 2019 J&J Consumer Health Has Digital And Natural Drivers For ‘Above Market’ Growth

EILEEN FRANCIS [email protected]

n emphasis Johnson & Johnson made at the start of 2018 across all consumer channels and strong performance of J&J’s on growing digital sales and a mid-year move into the most popular brands. Anatural supplements category were key drivers for its 3.2% Worldwide, OTC drug sales grew 4.4% on an operational basis consumer health sales growth for the year. to $4.34bn, with the US segment driving the increase. US OTC OTC drugs including Tylenol and Motrin analgesics, the Neu- sales jumped 7.8% to reach $1.85bn and international sales grew trogena and OGX beauty lines and the Listerine oral care brand 2.1% to $2.48bn. drove J&J’s consumer health sales were $13.9bn, a 1.8% increase accounting for the impact of currency exchange and acquisitions ZARBEES RESULTS COULD SPUR NATURAL and divestitures, the firm reported Jan. 22. EXPANSION The US division grew 3.5% to $5.76bn for the full year and the J&J’s consumer segment got a lift from the mid-year addition of international segment was up 1.4% on an operational basis – Zarbees Inc., bringing its first line of vitamins, minerals and sup- excluding the impact of foreign exchange and transactions – to plements as a platform for growing a portfolio that caters to con- $8.09bn, J&J said. sumer self-care trends and their demand for natural health care During a same-day earnings briefing, CEO Alex Gorsky said key products. The line is part of J&J’s OTC drug business even though drivers were product launches, continued geographic expansion the products are not pharmaceuticals.

hbw.pharmaintelligence.informa.com 4 February 2019 | HBW Insight | 11 HEALTH (OTC DRUGS)

“The early signs around Zarbee’s in markets cosmetic brands Dr. Ci:Labo, our OTC group are very positive,” Gorsky Labo and Genomer.(Also see “J&J seeks said, adding that J&J will look for oppor- control of Japan’s Ci:z” - HBW Insight, 2 tunities to expand farther into the natu- Nov, 2018.) ral segment. The deal was completed through a “se- J&J’s consumer health business con- ries of transactions” including an all-cash tinues to grow rapidly in e-commerce, tender offer to acquire Ci:z’s publicly held outpacing category growth rates with shares at $54 per share (¥5,900). J&J plans double-digit growth across all regions, the to acquire the remaining shares not ten- firm says. dered through a share consolidation un- “I am confident that we have the strat- der Japanese law during the first half of egies in place to allow us to move with 2019, the firm says. the agility needed to address new market For the full year, J&J’s oral care sales needs with an omni-channel approach were up 1.7% to reach $1.55bn; the seg- from the large box retailers to the e-comment’s US sales advanced 3.4% to $637m merce channels to better serve our con- while international sales were flat, up sumers,” Gorsky said. 0.5%, at $918m. Gorsky announced during following the In the quarter, oral care sales grew 4.4% Early signs from sales of Zarbees Naturals, firm’s 2017 fourth quarter that it is making globally to $399m, with strong growth in including Cough & Throat Relief, has J&J “aggressive” moves in e-commerce in a the US driven by launches including Lister- looking to expand in the naturals space. market swinging increasingly toward digi- ine Ready! Tabs. tal rather than conventional retail sales. J&J’s total worldwide sales for the full In the 2018 fourth quarter, J&J’s OTC jumped 6.2% operationally to $1.97bn. year grew 6.7% to $81.6m and net earn- sales worldwide grew 6.4% on an opera- The biggest drivers were the Neutrogena ings reached $15.3bn. tional basis to $1.15bn and US OTC market skin and hair care brand and the OGX hair The firm anticipates its 2019 rev- share grew with 13 brands gaining share. care brand. enue will be in the range of $80.4bn to Tylenol achieved “solid” growth, driven by During the October-December period, $81.2bn; consensus analysts’ estimates are strong consumption and benefiting from worldwide beauty sales advanced 2.5% $82.69bn. It forecasts earnings will reach seasonal and other restocking “dynamics,” operationally to $1.11bn; in the US, sales $8.50 to $8.65 per share, while analysts es- the firm said. were driven by the Neutrogena and Avee- timate $8.60 per share. no brands and in Asia, the beauty division J&J’s share price dropped slightly from DOMESTIC AND is fueled by products including the Hydro its Jan. 18 close of $130.68 to $128.24 in INTERNATIONAL DRIVE BEAUTY Boost skin care platform. early trading on Jan. 22 after the release Worldwide beauty sales grew 4.4% on an The company announced Jan. 17 that of its earnings report before closing at operational basis to $4.38bn for the year. it completed its $2.1bn (¥230bn) acqui- $128.93. Little change in the price followed In the US, the division’s sales increased sition announced in November of Japa- on Jan. 23 as it closed sat $128.81. 2.9% to $2.4bn and international sales nese firm Ci:z Holdings Co. Ltd., which Published online 23 January 2019 � BEAUTY� P&G Raises Forecast On Strong First Half, Notes Price Increases As Potential Drag

EILEEN FRANCIS [email protected]

rocter & Gamble Co. is betting that 2019 second-quarter earnings briefing on dragged down 4% by the impact of for- pricing increases and other potential Jan. 23. eign exchange. Pdrags won’t stop organic sales from In response to 4% organic sales growth, The firm maintains its core earnings per growing at the rate it estimates, which it or $17.4bn, during the October-Decem- share guidance of 3%-8%, with 5% de- raised following its latest quarter’s results ber period – its fiscal 2019 second quar- livered so far in its fiscal 2019, said Chief and based on launches and promotions ter – P&G raised its full-year organic sales Financial Officer Jon Moeller during the planned through June. projection to 2%-4%, up from its 2%-3% firm’s earnings briefing. The global marketer of consumer earlier estimate. Wall Street’s consensus Better-than-expected organic sales health, personal care, beauty and house- estimate for organic growth in the firm’s were driven by volume growth, increased hold care products could be onto some- fiscal 2019, which ends June 30, is 2.6%. pricing and product mix, which led organ- thing, analysts said following its fiscal P&G’s net sales for the quarter were flat, ic growth in eight of 10 product catego-

ries. P&G’s second quarter builds off double-digit organic growth in its first quarter, also on innovation, marketing investments and price increases. Line extensions, other launches and promotions planned through the end of P&G’s fiscal year are expected to fuel growth, including Gillette SkinGuard razor for men with sensitive skin that recently launched in the US and Europe. Additionally, Oral B “gum detoxified” toothpaste launching in Latin America, formula and packaging upgrades to Head & Shoul- ders hair care and continued promotional support of Vicks products throughout the cough and cold season should drive sales in P&G’s third and fourth quarters, it said.

PRICE INCREASES HAVE CONSEQUENCES Moeller warned macroeconomic factors and competitive dynamics – consumers’ response to pricing increases and market volatility from competitors’ moves – in P&G’s third and fourth quarters could derail its estimates. While P&G expects pricing to continue increasing through June, uncertainty about sales volumes and market volatility also could grow. “We face highly capable competitors with strong plans of their own, macro uncertainty stemming from issues like Brexit, a crisis in consumer confidence in France and trade and other policy impacts that can impact both the top and bottom line,” the CFO said. Moeller said P&G will raise product prices due to commodity costs and foreign exchange rates as well as “competitive realities” and expects top-line volatility with price changes. Competitors could try to hold or lower their prices for an ad- vantage over P&G’s expected hikes, which could slow P&G product sales. “Please take the increase in the top line guidance as indicative The recent launch of Gillette SkinGuard razor in the US and Europe of confidence, not fear but wanting to be very realistic with you for men with sensitive skin are among the launches and promotions about the environment that we see and we operate in,” Moeller planned through the end of P&G’s fiscal 2019 in June expected to fuel said. He added the firm’s remarks reflect “an open-eyed reality to grooming business growth. the volatility of the world that we live in and with the belief that it is too early to declare victory.” creased pricing, the firm reported. Hair care organic sales were HEALTH CARE SALES FLAT, BEAUTY UP 4% up low single-digits largely due to pricing, the firm reported. P&G’s health care sales were flat, dragged down 3% by foreign Volume was flat. exchange, at $2.22bn. However, organic sales grew 5% as its per- Grooming business sales declined 9%, or 3% organically, to sonal hygiene lineup, including Vicks cough and cold products, $1.62bn. Volume declined 4%, following devaluation-driven price Prilosec OTC heartburn remedy and Align probiotics, and its Crest increases, volatility in quarter-to-quarter merchandising events and Oral B oral care brands increased mid-single digits on promo- and heightened competitive activity, P&G said. tions and price hikes, according to P&G. Baby, feminine and family care sales slipped 1% to $4.59bn, P&G announced late in 2018 that following its purchase of though volume grew 1%. The firm said higher prices and dispro- Merck KGAA’s consumer health brands, which are folded into its portionate growth of premium products were offset by competi- health care division, it will implement the biggest changes to its tive activity and volume slump, P&G said. organizational structure in 20 years. It plans to combine its per- Overall, P&G gained aggregate market share in 34 of its top 50 sonal care and health care into personal health and forming six country-category combinations in the October-December pe- global units, each headed by a CEO. (Also see “P&G’s Personal riod, compared to 26 in the prior-year period, 23 in 2017 and 17 Health Sector Has Merck Consumer Chief As International Head” - in 2016, Moeller said. HBW Insight, 3 Dec, 2018.) Net earnings grew 26% to $3.22bn and diluted net earnings per Beauty sales increased 4%, or 8% organically, to $3.36bn. share were $1.22, an increase of 31%, due to income tax changes Skin and personal care product organic sales increased dou- established in the US tax code changes Congress passed at the ble-digits partly due to positive product mix from the “dispro- end of 2017. portionate growth” of SK-II and Olay skin care brands and in- Published online 24 January 2019

hbw.pharmaintelligence.informa.com 4 February 2019 | HBW Insight | 13 BEAUTY (COSMETICS)

FTC’s Claimed Authority To Chase Permanent Injunctions, Monetary Relief May Lack Substantiation RYAN NELSON [email protected]

ttorneys are watching federal court developments where tion of the clause “well established.” However, not everyone agrees pending appeals could chip away at the Federal Trade that the matter is so clear-cut. ACommission’s authority to permanently enjoin and ob- According to Michael Blume, a partner in Venable’s New York tain monetary relief from alleged wrongdoers under the FTC office, FTC’s claim to the expansive authority at issue under Sec- Act’s Section 13(b). tion 13(b) is “somewhat creative … and has always rested on a According to FTC, the courts have “uniformly accepted” its con- shaky foundation.” struction of Section 13(b), which the agency began employing In a late 2018 blog post, Blume and other Venable partners widely in its consumer protection program in the 1980s. note that while Section 13(b) empowers FTC to seek preliminary It’s become such an effective tool for the agency, in fact, that injunctions while civil or administrative adjudications are pend- today the bulk of FTC’s consumer protection enforcement is ing, the statutory provision limits the agency’s authority to obtain conducted directly in court under that mechanism rather than permanent injunctions to “proper” cases where “proper proof” has through administrative adjudication, the Commission says. been demonstrated. In December 2018, for example, FTC announced an order of Meanwhile, Section 13(b) “says nothing of monetary relief, let summary judgment in Florida’s Middle District that permanently alone of penalties,” the attorneys say. bars Kevin Guice from the telemarketing and debt-relief indus- tries, following the agency’s complaint that fingered Guice as the EYES ON NINTH CIRCUIT ringleader of a massive scam that defrauded more than 10,000 Gibson, Dunn & Crutcher attorneys M. Sean Royall, et al., also note student debtors and other consumers. the absence of any mention of monetary relief from the provision in question, discussing the issue in a Jan. 15 contribution to Wash- According to Blume, FTC’s claim to ington Legal Foundation’s WLF Legal Pulse. Despite the omission, “the Ninth Circuit and multiple other cir- the expansive authority at issue cuit courts have held that the word ‘injunction’ invokes a broad under Section 13(b) is “somewhat panoply of equitable remedies, including restitution, rescission, and disgorgement, all of which involve the defendant making creative … and has always rested on monetary payments,” they explain. FTC provides an overview of its investigative and law enforce- a shaky foundation.” ment authorities on its website, including an account of how its reliance on Section 13(b) has expanded under broader interpreta- The defendant also must pay $23m to the Commission for resti- tions accepted by the courts since the provision was added to the tution to those he allegedly conned. FTC Act via the Trans-Alaska Pipeline Act of 1973. Also in December, dietary supplement marketer Nobetes Corp. The Commission notes that at the time, the amendment was settled with FTC over allegations that it lured consumers into de- expected to serve FTC primarily as a means of halting corpo- ceptive “free trial” programs with bogus diabetes-treatment claims. rate acquisitions while administrative hearings were in pro- The agreement in California’s Central District prohibits Nobetes cess. In the decades that followed, however, the agency made and its officers from undertaking future deceptive practices and increasingly liberal use of the device, including in challenges requires a payment of $182,000, which FTC said may be used to to cases of basic consumer fraud and deception, with backing refund consumers. received from the courts. The Nobetes news closely followed FTC’s November announce- Now some courts are reexamining the case law and evolving ment that checks totaling more than $750,000 were being issued logic (or lack thereof) that has made the prevailing legal standard to consumers duped by Health Research Laboratories LLC’s what it is today. advertising for NeuroPlus and BioTherapex dietary supplements, The US Court of Appeals for the Ninth Circuit, which has juris- promoted as having Alzheimer’s prevention and arthritis treat- diction over district courts in nine western states, including Cali- ment benefits, respectively. fornia, recently broached the issue in the context of a decision on The firm forked over $800,000 in total under a Maine District FTC v. AMG Capital Management, LLC. Court order settling FTC’s charges, which also permanently re- The Ninth Circuit panel assigned to the appeal affirmed Ne- strained the company from making false representations going vada District Court’s 2016 summary judgment in FTC’s favor, as forward regarding joint-related disease and cognitive perfor- well as its injunction and relief orders, the latter a record $1.3bn mance claims, among others. judgment against AMG, which FTC caught operating a payday In each case, FTC cited Section 13(b) as the basis for its injunc- lending scheme. However, in what the Gibson Dunn attorneys tive and monetary relief requests. The agency calls its interpreta- call “an extraordinary procedural move,” the panel’s Circuit

Judges Diarmuid O’Scannlain and Carlos Bea called for the case to be reheard en banc – i.e., by all Ninth Circuit judges – to re- Perfect Cosmetics consider the controlling precedent and predecessors on which their AMG opinion was based. “We have implausibly construed the word ‘injunction’ in § 13(b) Misquotes Media to authorize the extensive power to order defendants to repay ill- gotten gains,” the judges assert in their special concurrence. They Endorsements In UK go on to submit that “our interpretation of § 13(b) is thus an im- EILEEN FRANCIS [email protected] permissible exercise of judicial creativity, and it contravenes the basic separation-of-powers principle that leaves to Congress the month after the UK advertising regulator reprimanded power to authorize (or to withhold) rights and remedies.” Perfect Cosmetics Company Ltd. for using its advertis- The Ninth Circuit should indicate whether it plans to revisit the is- Aing review findings as an endorsement for an eye cream, sue en banc by late spring 2019, according to Royall and colleagues. it said the firm didn’t support a claim that beauty magazine Marie Claire gave a “No. 1” designation to the product. CONTROVERSY HEADED FOR SUPREME COURT? In a review published Jan. 23, the Advertising Standards Au- Blume pointed out in an interview that if the Ninth Circuit thority said the Warwickshire, England, firm should discontinue a does take on the matter en banc, it likely will signal a new claim in an advertorial-style print ad it published in August stating precedent in the making that would clip FTC’s Section 13(b) beauty magazine Marie Claire described its My Perfect Eyes cream wings going forward. as the “No. 1 eye cream to banish dark circles and fine lines!” ASA, He told HBW Insight that other challenges around the US are however, said the firm’s separate claims in the advertorial about similar aim at FTC’s authority to permanently enjoin defendants the product quoted from newspapers The Sun and The Daily Mail when evidence is lacking regarding any threat of ongoing or re- were substantiated. peat violations. The advertorial included the statement “as voted by Maire He highlighted one case in particular – FTC v. Shire ViroPharma Claire” and quoted the Sun as identifying the firm’s eye cream as – which is undergoing appeal in the Third Circuit following its dis- “the miracle eye cream that has become a global best seller” and missal by Delaware District Court in March 2018. the Daily Mail as stating the cream “really does smooth out wrin- In its complaint, FTC sought injunctive and monetary relief un- kles around thee eyes.” der Section 13(b) based on Shire’s alleged abuse of the Commis- sion’s citizen petition process, which FTC claims was an anticom- petitive ploy to hold back generics. However, US District Judge Richard Andrews determined that the alleged misconduct ceased almost five years before FTC’s filing and thus did not constitute a Perfect Cosmetics’ advertorial danger warranting injunctive action. stating beauty magazine Marie Other cases are examining the Securities and Exchange Com- Claire described My Perfect Eyes mission’s authority to obtain injunctions under the 1934 law that as “No. 1 eye cream to banish created that agency, with similar arguments being made and en- dark circles and fine lines” tertained by the courts about regulatory overreach. wasn’t substantiated. “I think this ultimately will be decided by the Supreme Court,” Blume said. “Several Supreme Court justices have voiced some skepticism in certain contexts that courts have gone a little far afield from the original statutory language. So to me it’s all but certain that there will be a decision in this area. It may not be the FTC Act, it may be the [Securities Exchange Act] or something else. In a review published Dec. 19, ASA found Perfect Cosmet- But that seems to be where this is headed.” ics breached UK advertising codes with claims in two adverto- Blume noted that the FTC Act does contain another provision rial print ads published in December 2017 that suggested the that allows it to collect monetary relief. “It’s just that there’s a agency endorsed the firm’s products by using the statements different process that the FTC has to go through [with] more “even advert watchdog says will banish wrinkles” and the “ad- protections for defendants, making it a little bit harder for the vert watchdog approved cream.” ASA said its rulings finding FTC,” he said. ad claims as substantiated or not misleading are not endorse- According to FTC’s website, the statute’s Section 19 authorizes ments that can be used in ads. (Also see “Perfect Cosmetics Im- the agency to seek consumer redress in district court only after perfect In Claiming UK Regulator Endorses Its Products” - HBW an administrative review has been carried out to completion with Insight, 20 Dec, 2018.) an order against the alleged violator. The agency must then dem- Perfect Cosmetics had based those claims on ASA’s 2016 re- onstrate to the court’s satisfaction that the defendant’s conduct view of a TV ad for My Perfect Eyes in which it determined be- was of the sort “a reasonable man would have known under the fore and after photos demonstrating temporary reductions in circumstances was dishonest or fraudulent.” wrinkles around the eye associated with use of the product were Published online 28 January 2019 not misleading.

hbw.pharmaintelligence.informa.com 4 February 2019 | HBW Insight | 15 BEAUTY (COSMETICS)

NO RANKING BY MARIE CLAIRE no indication that My Perfect Eyes position in the list “conferred To support its latest advertorial claims, the firm provided the reg- any particular ranking over and above the other products or that ulator with a Marie Claire article headlined, “Thee best cream to consumers or Marie Claire had voted for My Perfect Eyes over banish dark circles and fine lines.” The magazine article provided other products.” Instead, the article appeared to be a list of rec- details on 10 products including the firm’s cream. ommended products, ASA said.. Perfect Cosmetics also provided a copy of emails between it Despite Marie Claire’s permission to use the claim, “the advertis- and Marie Claire to show the firm obtained permission to use the ing implied a level and type of endorsement of the product by contested claim. It also provided a copy of the Sun and the Daily Marie Claire which was not in line with the content of the article,” Mail articles to ASA. ASA said. ASA said consumers would understand the “No. 1” claim in the Reviewing the content in the Sun and Daily Mail newspapers, ad next to “As voted by – Marie Claire” to mean that My Perfect ASA determined the testimonials provided in the company’s ad Eyes had been voted the best product from a selection of mul- were genuine and did not breach advertising code by referring to tiple items and the magazine endorsed the product over oth- the two newspapers’ statements. ers. However, in reviewing the original Marie Claire article, ASA Published online 24 January 2019 St. Ives Apricot Scrubbed Of Class Action Alleging Harm From Walnut Shells

LAUREN NARDELLA [email protected]

federal judge in California dis- able safety hazards),” Guilford said in the missed claims in a putative class summary judgement. Aaction against St. Ives Apricot That same line of thinking came into Scrub, granting Unilever PLC’s motion play as the court assessed the plaintiffs’ for summary judgement and quashing expert study, which included 14 partici- an attempt to link the product to poten- pants tracked over a two-week period. tial skin injuries. While the study concluded that the St. Ives Judge Andrew Guilford in the US Dis- scrub disrupted the stratum corneum and trict Court for the Central District of Cali- resulted in trans-epidermal water loss, the fornia granted summary judgement in a short-term research was not enough to Dec. 17 order in Kaylee Browning et al v. convince the court that the scrub caused Unilever, affirming that the plaintiffs failed acne, infection or wrinkles – all of which to demonstrate the scrub caused harm could have been linked to other factors. and that Unilever mislead consumers. “Plaintiff’s short-term clinical study does The plaintiffs offered evidence of the Walnut shells in St. Ives Apricot Scrub little to advance Plaintiffs’ causation theo- product’s abrasive nature, including testi- products, including Blemish Control, weren’t ry or prove their allegations of longer- mony from experts, published articles and shown by plaintiffs in a class action term skin conditions,” Guilford stated. a study alleging that micro-tears caused complaint to cause skin micro-tears. He also dismissed the plaintiffs’ argu- by jagged edges of walnut shells, which ment that Unilever has a duty to disclose are used in the product for its exfoliating ford wrote in his order. “So the real injuries a safety hazard or defects for the product. properties, can increase acne, infections, asserted appear to be the alleged effects “Plaintiffs haven’t shown that micro- wrinkles and signs of aging in the long of microtears – the ‘acne, infection and tears themselves (as distinct from poten- run. Although they had not suffered vis- wrinkles’ and ‘inflammation and irritation tial resulting symptoms, such as wrinkles ible injuries from use of the product, the … [that] can accelerate the aging process.’” or acne) are counter to the product’s plaintiffs alleged Unilever should have dis- However, the plaintiffs were unable to central function,” the judge explained. closed the potential for those side effects. prove causation and that the scrub and “Indeed, the Scrub was marketed as an Judge Guilford wasn’t impressed by potential resulting microtears are a true exfoliant, which implies some intended the plaintiffs’ argument or evidence. He safety hazard, instead of “conjectural and resurfacing or abrasion.” said the plaintiffs “have at best shown hypothetical” injuries. In its April 2018 motion for summary that St. Ives Scrub could, in theory, alter “Evidence is lacking that St. Ives, and judgement, Unilever argued the plaintiffs the skin’s surface.” not other products or lifestyle or sun “invented a fake medical condition to suit “Indeed, Plaintiffs agree microtears are damage or any other factor, produced their theory,” namely, that use of the prod- undetectable, and no consumers have acne, wrinkles, inflammation, or loss uct could cause “micro-tears” in the skin – complained about microtears per se,” Guil- of moisture (even if these were action- a condition for which the firm could find

no mention in dermatology journals and medical dictionaries – gist Tested.” The plaintiffs suggested the statement indicates the and maintained the scrub is tested by dermatologists, despite the product is recommended or approved by dermatologists. plaintiffs’ allegations to the contrary. (Also see “Unilever Seeks End Additionally, Guilford concluded that the named plaintiffs To Litigation Over St. Ives Scrub, Plaintiffs’ ‘Fake Medical Condition’” were not adversely affected by using St. Ives Apricot Scrub and - HBW Insight, 24 Oct, 2018.) would not have been proper class representatives had the case St. Ives Apricot Scrub is available in Fresh Skin, Acne Control and advanced. Exfoliate & Nourish Oil formulations; the brand also offers Apricot In a Jan. 16 filing, the plaintiffs, who filed their complaint against & Manuka Honey Cleansing Stick and Glowing Apricot Sheet Mask. Unilever in 2017, announced they are appealing the decision to the US Court of Appeals for the Ninth Circuit. ‘COMMON SENSE’ RULING The plaintiffs’ complaint alleged that walnut shell powder was a Eric Alexander, a partner in Reed Smith LLP’s Washington office, skin-damaging culprit and characterized the scrub as “completely wrote in a Jan. 11 post on the firm’s Drug & Device Law blog that worthless.” (Also see “St. Ives Suit Signals Potential Risk In Using the court applied “a healthy dose of common sense” in the case. Natural Microbead Alternatives” - HBW Insight, 6 Jan, 2017.) “People who might want to use a scrub – any scrub, pre-pack- Unilever was unsuccessful in arguing to dismiss the case in aged or homemade – might consider in advance whether scrub- early 2017, arguing that the plaintiffs suffered no injuries; ques- bing the skin on their face with something with sufficient gritti- tioning the credibility of dermatologists they held up as experts; ness to accomplish a scrubbing is what they want,” Alexander said, and maintaining consumers were not mislead about the scrub’s adding: “That is not really a labeling issue.” exfoliation characteristics. (Also see “Unilever Files Snarky Motion The court also dismissed the plaintiffs’ argument that St. Ives To Shred St. Ives Class Action” - HBW Insight, 14 Mar, 2017.) Apricot Scrub’s label was misleading for stating it was “Dermatolo- Published online 24 January 2019 � WELLNESS� Wellness Research Round-up: Probiotics, Vitamin D Supps, Haskap Berry Extract and Caffeine For Combat Sports

DAVID RIDLEY [email protected]

PROBIOTICS SHOULD BE TREATED WITH CAUTIO