Apple Watch Series 4 “first ECG product offered OTC”

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At its autumn keynote event last week, Apple announced upgrades to several of its products, including the Apple Watch Series 4. The smartwatch’s potential as an essential healthcare device is now being more fully realised, with Apple receiving Class II “de novo” FDA clearance for the Apple Watch’s innovative ECG and atrial fibrillation (AFib) features. COO Jeff Williams called Apple Watch Series 4 “the first ECG product offered over-the-counter directly to consumers”, though AliveCor has contested this claim.

One of the announcements that drew the greatest applause at the event was the unveiling of the new ECG app, which can take a reading and provide results in around 30 seconds. Results are derived not just from the second-generation electrical heart sensor in the back crystal of the watch, but also electrodes in the Digital Crown, which must be pressed down by fingertip during the reading. Users are then given a heart rhythm classification, with a normal rhythm classified as “Sinus Rhythm”.

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A new operating system (watchOS 5) also ensures that the new electrical heart sensor intermittently works in the background, notifying users if their heart rate appears to be too high or low, or if there are signs of an irregular heart rhythm, such as those suggestive of AFib. If detected, the new Apple Watch prompts users to “talk to your doctor”, while also ensuring that all recordings, along with associated classifications and any noted symptoms, are stored in the Health app in a PDF that can be shared with health professionals.

Another innovative healthcare feature is Apple Watch Series 4’s ability to detect falls, thanks to it new gyroscope and accelerometer. This hardware allows for analysis of wrist trajectory and impact acceleration – after a fall, an alert is sent to the user, which can be dismissed or used to initiate a call to emergency services. If no movement is sensed for 60 seconds after the alert, the new Apple Watch will automatically call emergency services and send a message along with location to emergency contacts. Such features are likely to broaden the appeal of the Apple Watch among an older demographic, and more importantly have the potential to save lives.

Nicholas Hall will visit the stunning city of Vienna on 2-4 April 2019 to lead our 30th European CHC Conference & Action Workshop! Focusing on the central theme of Keeping Up with the Digital Consumer, this meeting will also feature a workshop from The CHC Training Academy, enabling you to Embrace Digital Transformation. To find out more about this pivotal meeting, early bird booking rates, and sponsorship opportunities, please contact Elizabeth.Bernos@nicholashall.com

 

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Bangladesh: Amazon eyeing 2020 entry

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As today’s OTC DASHBOARD hot topic report shows, the e-commerce market in Asia-Pacific is undergoing rapid change, with China passing new e-commerce laws that will take effect in January 2019, while India has also just released draft rules for the online sale of medicines. Amazon also last week unveiled a new Hindi version of its website.

Yet all this upheaval is not isolated to the major markets of India and China. Amazon announced over the weekend that it is planning to begin operations in Bangladesh within the next couple of years, to compete with its arch e-commerce rival Alibaba, which is already present in the country via Daraz. With a population of just over 166mn, Bangladesh is an attractive and fast-developing market.

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According to local reports, however, resistance from local e-commerce players in Bangladesh is likely to be strong. Many are opposed to the government’s new Digital Commerce Policy, which allows foreign companies to have 100% shares in local e-commerce ventures (previously it was capped at 49%).

Key areas of sensitivity will be pricing and investment in the local economy. The e-Commerce Association of Bangladesh (e-Cab) is in favour of protection for local e-commerce companies and is reportedly working on a list of policy recommendations, including foreign firms having to host their websites locally, as well as ensuring 90% of staff are locals and that companies have a logistical presence in the country.

Explore the digital landscape at Nicholas Hall’s upcoming OTC.NewDirections Executive Conference. Other topics on the agenda include Medical Device Regulations, Medical Cannabis, Switch and Smart Probiotics. This will be an inspiring day on 12 September in London, focusing on Where Innovation Meets Regulation. For details of the full agenda or to reserve your place contact elizabeth.bernos@NicholasHall.com

Alibaba buys in to “digital silk road” vision

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According to a report in the FT over the weekend, Chinese e-commerce retailer Alibaba is close to agreeing a deal with Russian internet company, Mail.ru, and sovereign wealth fund, Russian Direct Investment Fund, to form a joint-venture e-commerce company.

As highlighted in our earlier blog on Chinese investment in Africa, there is a clear vision from China and Chinese companies to invest in the physical infrastructure for a new silk road (Beijing’s Belt & Road Initiative) connecting Asia, the Middle East and Europe, and this latest news on a China-Russia e-commerce tie-up underlines the appetite for a digital silk road too.

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In October 2017, the Russian Government approved a Ministry of Health bill to allow the online purchase and home delivery of OTCs, which came into force in January 2018. As a result, Mail.ru announced the launch of its online pharmacy in April 2018. At present, established western e-commerce giants like Amazon are largely absent from Russia, giving Alibaba the freedom to chart new territory in a market of 147mn consumers at an opportune time.

As the FT article points out, Alibaba is also fighting back against Amazon in certain markets, like Indonesia, where the US retail giant has stolen a march. For example, Alibaba has invested heavily in two e-commerce companies, Tokopedia and Lazada, both of which market goods, including healthcare products, across southeast Asia.

Explore the digital landscape at Nicholas Hall’s upcoming OTC.NewDirections Executive Conference. Other topics on the agenda include Medical Device Regulations, Medical Cannabis, Switch and Smart Probiotics. This will be an inspiring day on 12 September in London, focusing on Where Innovation Meets Regulation. For details of the full agenda or to reserve your place contact elizabeth.bernos@NicholasHall.com

Apple and Google make new healthcare moves

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Two stories emerged last week that underlined the importance of healthcare to tech giants Apple and Google. First, CNBC reported that Apple was hiring engineers tasked with developing new health sensors, while later in the week it was reported that Google is working on a new healthcare and fitness AI assistant called Google Coach.

As both companies well know, healthcare is a notoriously tough market to crack, given the need for precision technology and the regulatory hurdles. In Apple’s case, some of the disappointment that accompanied the launch of the Apple Watch was related to the lack of healthcare features – the device’s optical sensor only tracks heart rate – so the beefing up of its health sensor team could mean new features further down the line, such as heart rhythm monitoring or even non-invasive blood sugar monitoring.

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As for Google, despite the failure or lukewarm reception of previous ventures like Google Health and Google Fit, the company remains committed to the healthcare market. Reports indicate that the company is working on a new venture, Google Coach, which will leverage AI technology to offer not just fitness tracking, but also workout routines, medication reminders, meal plans, etc.

Like Apple, Google is planning to integrate these new features with its wearable devices, known as the Wear OS range, with support for other Android devices likely to follow. Google is also reportedly working on “conversational notifications”, which group several alerts into one larger notification to avoid turning off users with information overload. Perhaps the AI performing these conversations may one day recommend OTCs.

Nicholas Hall will visit the stunning city of Vienna on 2-4 April 2019 to lead our 30th European CHC Conference & Action Workshop! Focusing on the central theme of Keeping Up with the Digital Consumer, this meeting will also feature a workshop from The CHC Training Academy, enabling you to Embrace Digital Transformation. To find out more about this pivotal meeting, early bird booking rates, and sponsorship opportunities, please contact Elizabeth.Bernos@nicholashall.com

Perrigo to revive flagging OTC allergy sales?

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According to the latest MAT Q1 2018 data, global growth of OTC allergy remedies has slowed to just +0.2%, compared with a rate of +3.7% in the year-ago MAT Q1 2017 period, and +10.3% in the MAT Q1 2016 period. A drop-off in Rx-to-OTC switch activity has been a key factor, so last week’s news that Perrigo has signed an agreement with Merck & Co for exclusive rights to market, sell and distribute a non-prescription version of Nasonex (mometasone furoate monohydrate) in the US will be a welcome boost for the category.

Financial terms were not disclosed and the deal is subject to receipt of all necessary regulatory approvals. Nasonex is currently available on prescription only in USA, where it is marketed by Merck & Co. The corticosteroid anti-inflammatory nasal spray is indicated for the treatment of the symptoms of seasonal allergic or perennial allergic rhinitis in people aged 18+ years. In those markets where the product is available OTC, such as Australia, it is marketed by Bayer.

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Perrigo has often been first to launch private label equivalents of recently switched OTC brands – generic versions of Flonase and Zegerid OTC were launched in 2016, while a copy of Nexium 24HR was launched by the company last summer – but this deal marks a new phase for Perrigo into switching brands.

As Perrigo Executive VP & President, Consumer Healthcare Americas, Jeff Needham, commented: “This product in-licence is the first of its kind for Perrigo. As other similar products that have previously switched from prescription to OTC status, we are working diligently to bring this important product to consumers and customers more quickly than the average 5-year OTC switch timeframe. This strategic investment into the OTC category creates an innovative product offering for Perrigo. We expect to execute the Rx-OTC-switch, fully penetrate this market with a branded offering and provide a future store brand alternative.” 

Comment from Ian Crook, Managing Editor, Nicholas Hall’s Reports: Nasonex enjoys dynamic growth in the handful of markets where it has been switched to OTC by Bayer and generated sales of US$23mn in 2017 (+28% CAGR 2013-17). In the brand’s largest market, Australia (where it switched in 2014), award-winning advertising helped it build a strong presence among consumers; it ranked 4th with sales of US$10mn (+5%) in 2017, comfortably the No.1 in the nasal sprays segment. How the brand will fare in the USA — if and when Perrigo successfully navigates the switch process — remains to be seen. Nasal steroid switches in the USA have historically driven high growth among allergy remedies, but later arrivals like Nasonex are unlikely to make as big a splash as previous INS switches.

Perrigo is one of the Top 20 OTC players profiled in the 2018 version of our bestselling OTC YearBook. This essential annual report also gives an extensive, up-to-date overview of the OTC industry across the globe, including reviews of M&A activity, Top 15 markets and major OTC categories, plus much more. For more information or to order your copy, please contact melissa.lee@NicholasHall.com.

 

J&J to buy Zarbee’s

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J&J Consumer has entered into a definitive agreement to acquire natural healthcare products company Zarbee’s Naturals for an undisclosed sum. With a 50% CAGR, the Zarbee’s Naturals business racked up sales of US$68mn in 2017, according to Nicholas Hall’s global OTC sales database DB6, and there is lots of room for growth ahead.

J&J’s VMS portfolio accounts for just 0.1% of its total consumer healthcare business, so the Zarbee’s deal will provide a significant boost (see the table from OTC DASHBOARD below showing J&J’s current OTC sales split by major category). There will also be scope to build the brand internationally – at present, Zarbee’s focus is almost exclusively on the US market, so J&J will likely use its considerable marketing muscle to roll out the brand in other key regions where it has a strong presence, like Europe and Asia-Pacific.

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Founded in 2008, Zarbee’s Naturals is majority owned by the Growth Fund of L Catterton in partnership with various minority owners, including Sorenson Capital. The deal, which is expected to complete in Q3 2018, will include the full line of Zarbee’s Naturals products for children and adults.

Product innovation has been one of the main drivers behind exceptional growth for Zarbee’s Naturals. In April 2018, the company introduced three Children’s Complete Multivitamins in a gummy format, including Complete Multivitamin + Iron, Complete Multivitamin + Probiotic and Complete Multivitamin + Immune. In partnership with Amazon, Zarbee’s also released a Baby Bee Essentials Gift Set complete with a bee romper and products such as Gripe Water and petroleum-free Baby Soothing Chest Rub. Paediatric products like these will fit well with J&J’s family-friendly image.

As Health and Wellness climbs up the list of consumer priorities, the market for herbal and natural options is booming. Take a look at what the future holds for this market with Nicholas Hall’s upcoming report Herbals & Naturals: Opportunities in a Vast & Dynamic Area of Consumer Health. Scheduled for publication in August, this report will include coverage of 9 leading global markets, analysis into a wide range of categories including Herbal & Natural Supplements, Topical Analgesics, Cough Remedies, Laxatives and more, plus forecast sales. Benefit from early bird rates when you pre-order today! For more information, or to pre-order your copy, please contact melissa.lee@nicholashall.com.

Medical cannabis products legal in UK

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Three hot topics we focus on at OTC DASHBOARD, in our blogs and infographics, are OTC adjacencies, e-commerce and new technology. Medical cannabis falls within the sphere of OTC adjacencies, and here at Nicholas Hall & Company we believe that this category will progressively become part of the consumer healthcare market.

Recent legislative moves show that government attitudes to cannabis use are becoming more and more liberal. Just last week, the UK Home Secretary made the decision to allow the legal prescription of cannabis-derived medicinal products by specialist doctors. The UK’s regulatory agency, MHRA, is now working on a clear definition of what constitutes a cannabis-derived medicinal product.

The UK has also been one of several markets that have seen the launch of innovative cannabidiol (CBD) products, such as CannaQIX (Precision Healthcare / Creso). Launched in April 2018, CannaQIX is formulated with CBD organic hemp extract, as well as vitamins and minerals. Available as lozenges, the product is positioned as a cognitive booster that maintains mental and nervous function, reduces fatigue and releases energy. The product is also available in Switzerland and being rolled out across Europe.

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Other key countries for CBD products include Germany, Israel, Australia and the USA, with 45 products in the latter market already listed in our OTC New Products Tracker archive, in a variety of innovative formats including pens, vaporisers and gummy bears.

Canada is another country becoming more liberal in its approach to cannabis. In June 2018, legislation permitting Canadians to consume cannabis for recreational purposes was finalised, the final step that will pave the way for official legalisation in October 2018. The regulatory package is 390 pages long and provides details about how cannabis may be grown, harvested, processed and sold.

Looking ahead, Europe and North America are likely to be at the forefront of market development. According to a report from Prohibition Partners, the European cannabis market will be worth €115.7bn (US$135bn) by 2028, with the majority of European states expected to pass legislation to legalise medical cannabis programmes and recreational cannabis in that time. For more details, see the full report here.

Nicholas Hall’s upcoming OTC.NewDirections Executive Conference will reflect rising interest in the fast-developing cannabis market worldwide with two presentations on this key topic, from Canada and Israel. Being held on 12 September in London, this one-day meeting will explore Where Innovation Meets Regulation. For details of the full agenda or to reserve your place contact lianne.hill@NicholasHall.com