Stada to rise up OTC rankings

otcinaction

Two major M&A deals agreed in the past week look set to elevate Stada into the consumer healthcare global Top 20. In this week’s blog, we look closer at the details of each deal and, based on the calculations of our DB6 data division, where Stada may end up in the rankings once both deals are closed.

As part of Takeda’s goal to divest around US$10bn in non-core assets, the company has agreed to sell to Stada around 20 selected OTC and Rx products marketed in Russia, Georgia & CIS countries, for US$660mn. The portfolio comprises cardiovascular, diabetes, general medicine, respiratory and OTC supplement entries, and includes Russia’s leading systemic cardiovascular, Cardiomagnyl (aspirin + magnesium hydroxide).

Stada will acquire the rights, title and interest to the products in Russia, Georgia, Armenia, Azerbaijan, Belarus, Kazakhstan and Uzbekistan, while under a manufacturing & supply agreement, Takeda will continue to manufacture the products on Stada’s behalf. The deal is expected to complete in Q1 2020 and, based on current assumptions, could elevate Stada into the No.7 position in Europe.

Screen Shot 2019-11-11 at 10.47.17.png

Stada already takes the No.9 position among Europe’s Top 10 OTC marketers

Stada has also entered into an agreement to acquire Walmark from Mid Europa Partners for an undisclosed sum. Based in Czech Republic, Walmark is a leading consumer healthcare company in CEE with a direct presence in nine markets, while its products are available in 40+ markets globally. The company’s portfolio spans multiple categories, and key brands include Proenzi joint health range, Urinal urinary health brand, Biopron probiotics for gut health and Martians paediatric supplements. 

Stada’s Head of European Markets, Steffen Wagner, commented: “We are significantly strengthening our presence in Central Europe — especially in Czech Republic, Slovakia, Romania, Bulgaria and Hungary — as a result of this acquisition. We are also looking at ways in which we can market the Walmark brands outside of the current core geographies.” Again, the deal is expected to complete in Q1 2020, and the combined impact of these two acquisitions may raise Stada up as high as the No.14 position in the global OTC rankings.

You can now take a first look at the speaker line-up of industry experts who will be joining Nicholas Hall in Athens next year for our 31st European CHC Conference, taking place from 28th to 30th April! To reserve your seat at the early-bird discounted rate, or to find out more, including information on sponsorship opportunities, please contact Jennifer.ODonnell@NicholasHall.com or Lianne.Hill@NicholasHall.com

Fish oils again under the spotlight

otcinaction

As reported in our newly published Q2 2019 update, herbal & natural supplements are performing well, up 4.4% globally, thanks to a revival in sales in North America that is partly powered by a return to growth for fish oils & omega-3. This well-developed OTC subcategory generates close to US$2bn in global sales, and after two years of decline in 2015 and 2016, turnover has been rising slowly but surely in recent years. An article that appeared in the New York Times over the weekend, however, entitled Should I Take Fish Oil?, has the potential to halt these gains.

Describing the results of omega-3 studies so far as “inconclusive and inconsistent”, the article calls for further large-scale scientific trials, such as the recent VITAL study, which found that omega-3 supplements didn’t reduce the risk of major cardiac events in a usual-risk population, but did reduce the risk in a subset of people with low fish intake by 19%. The article also pointed to environmental concerns about the fish reduction industry, advocating for vegan and algae-based omega-3 supplements instead.

FISH OILS.png

The Council for Responsible Nutrition (CRN) and other industry bodies, like the Global Organization for EPA and DHA Omega-3 (GOED), are obviously concerned about this article and its ramifications for the fish oils market. One thing worth emphasising about the article is that it doesn’t discount the importance of omega-3 fatty acids as essential nutrients and it doesn’t change the current recommendations by authoritative sources who support intake of omega-3 fatty acids for maintaining overall health.

According to the 2015–2020 Dietary Guidelines for Americans, people should aim to consume eight or more ounces of seafood per week, especially fatty fish, however the reality is that the majority of people don’t manage to achieve this through their diet. For many consumers, especially those with a low fish intake, taking omega-3 fatty acid supplements remains the most prudent choice to ensure the adequate levels needed for good health.

Only two weeks to go until Nicholas Hall’s OTC.NewDirections Executive Conferencetaking place in London on 14 November 2019! Nicholas will be joined by experts from companies including Bayer, Mundipharma and J&J to review key issues impacting our industry and ensure that you are Keeping Consumers in the Spotlight. Unable to join us? Watch Nicholas’ opening address live on the day here at 09:05 on 14 November. To experience the event in full, you can book your place or find out more by contacting jennifer.odonnell@NicholasHall.com without delay.

Focus on China: Trade agreement with USA imminent?

otcinaction

Some welcome news for the global economy which broke over the weekend, as announced by the US trade representative, is that the US and China are “close to finalising some sections” of an interim agreement to ease trade tensions between the two countries. This is also a welcome development for OTC marketers, including RB, whose newly-appointed CEO Laxman Narasimhan recently stated that the company’s disappointing Q3 performance was primarily due to issues in USA and China.

Growth in China’s OTC market slowed to 5.3% in the MAT Q2 2019 period, owing to a low key cough & cold season and a weakening economy. Nicholas Hall was a speaker at the Global Self-Care Federation (GCSF) conference – a joint meeting of the Chinese, Asian and global CHC associations, held in Beijing last week – and wrote: “It is always valuable to come to the second-largest CHC market, which in just a few years will be the world’s biggest economy. There are major opportunities here, but increasing challenges too as the Government takes a tougher line on pricing and distribution, without easing the regulatory barriers.”

EHm40p0UcAUKho_.jpg

Judy Stenmark kicked off proceedings at the GSCF 2019 conference

Nicholas Hall also wrote that: “Among the many presentations during the 2 days, some of which lasted for as little as 15 minutes – this was truly a conveyor belt conference, with only one panel discussion and no questions from the floor – a presentation that stood out for me was from Conba, a company about which I knew very little. Hu Jiqiang, Chairman of Conba Group, made the startling claim that Conba will become the biggest producer of medical cannabis in China and possibly the world … And, of course, the presentation by Alibaba Health was one to sit up and listen to at the end of an exhausting two days. This really is a game-changing company as I discuss in my New Paradigms report.

The rise of Chinese marketers within the global OTC rankings has been a notable trend in 2019. Our latest MAT Q2 2019 data shows that China Resources 999 now takes 9th position globally, and grew by 7.3% in the year to end-June 2019. Additionally, as explored in one of our recent blog posts, By-Health has broken into the global Top 20 and now claims 15th spot. This company has bucked the trend of decelerating growth in China, with sales growing by 31% in MAT Q2 2019. China accounts for over 90% of By-Health’s OTC portfolio turnover, with Australia accounting for the remainder.

Some of the latest innovations and technologies impacting CHC will be at the forefront of the agenda at next month’s OTC.NewDirections Executive Conference, which will take place in London on 14 November, with speakers from key players including Mundipharma, J&J and Bayer. Please contact jennifer.odonnell@NicholasHall.com to book your place or find out more. If you are unable to join us, you can always view Nicholas’ opening address live at 09:05 GMT here

Highlights from OTC DASHBOARD’s Q2 update

otcinaction

The latest quarterly report on the global OTC market is now available on the OTC DASHBOARD website, including data & trends on the market’s performance at a global, regional and Top 20 country level in the year to end-June 2019. Here we highlight some of the key topline trends from this Q2 update, selecting one major global development from each of our company, category and brand watch sections.

Company Watch

M&A activity completed in 2019 has seen a reshuffle in the rankings of the top global OTC marketers; most notably, GSK is now by far the No.1 consumer healthcare marketer globally, following the closure of its OTC merger with Pfizer in August 2019, giving it a 6.8% share. This consolidation has led to the emergence of new competitors, most notably By-Health, which has broken into the global Top 20 and now claims 15th spot.

While decelerating growth in Emerging Markets, especially China, has been a key macroeconomic trend affecting the wider economy and the consumer healthcare industry, one company that has bucked the trend with accelerating growth (+31%) is By-Health. China accounts for over 90% of By-Health’s OTC portfolio turnover, with Australia accounting for the remainder. In China, the company fields brands including dynamic longline range By-Health and glucosamine supplement Keylid, backed by an intensive A+P strategy.

by-health.png

Category Watch

Analysing the performance of the major OTC categories at a global level, gastrointestinals enjoyed the fastest growth in the MAT Q2 2019 period, with sales up 4.9%. Antinauseants (+15.9%) performed especially well, recorded a strong performance in Asia-Pacific, the largest regional market for GIs, owing to increasing levels of travel and changing diets.

Antidiarrhoeals, antispasmodics & IBS remedies and liver & bile remedies were the other best-performing categories, powered by new product innovation, as explored more fully in our Q2 update. One cloud on the horizon for GIs are the global concerns and recalls affecting antacids containing ranitidine, after some medicines were recently found to contain a nitrosamine impurity called N-nitrosodimethylamine (NDMA) at low levels — see our previous blog for more details.

Brand Watch

Two OTC brands have global sales of over US$1bn — Vicks (P&G) and Tylenol (J&J) — and both continue to outperform the global OTC market. No.1 Vicks produced above-average growth of 5.7%, despite difficult conditions in the global cough, cold & allergy market.

A strong return to growth in North America for Vicks was at the heart of this upturn, allied with continued strong growth in Latin America, helping to offset the moderate continued decline in Europe. A major factor driving faster growth in North America for Vicks is the sedative & sleep aid range Vicks ZzzQuil, which was boosted by the US launch of a new Pure Zzzs line in 2018. This range has been extended further with Pure Zzzs Kidz in Q3 2018 and several beauty and de-stress gummy supplements in 2019.

Whether you are in the office or on the go, you can access reliable CHC data and trends from OTC DASHBOARD, accessible on tablet, smartphone and desktop, and covering 63 markets across the world. Contact Hannah.Burke@NicholasHall.com to find out how you can benefit from OTC DASHBOARD by setting up a free trial today!

France clamps down on OTC painkillers

otcinaction

First came a public consultation launched by French medicines agency, ANSM, in August 2018 on how to increase consumer awareness of the risks of paracetamol misuse or overdose. Then followed the decision in July 2019 that, within 9 months, all paracetamol-based medicines must carry a prominent warning on packaging, to inform consumers about risks associated with paracetamol overdose, particularly hepatotoxicity. Paracetamol is the most commonly prescribed and used medicine in France, and the change affects more than 200 medicines.

Now, the ANSM has decided that, to reinforce the advisory role of the pharmacist and guarantee safe use of medicines containing paracetamol, ibuprofen and / or aspirin (in particular to avoid the risk of overdose), such products should be removed from the OTC self-selection list from January 2020 and kept behind the counter in pharmacies. ANSM has launched a consultation period with marketers, who have one month to comment.

France Painkillers.jpg

According to our estimates, the decision (if implemented) could affect around 90 SKUs on the French market. This includes the trio of leading paracetamol-based brands – Doliprane, Dafalgan and Efferalgan – as well as the top OTC ibuprofen-based (Nurofen, Advil) and aspirin-based (Aspirine Upsa) analgesics. Various OTC generics from the likes of Biogaran, Sandoz and Mylan, as well as systemic cold & flu remedies (Fervex, HumexLib) and topical analgesics, could also be affected.

The true effect that this decision could have on sales of OTC systemic analgesics remains to be seen, but it would clearly not be welcome news for marketers active in a category that remains in persistent decline, in part because of another regulatory decision (reverse-switch of codeine in July 2017). Leading brands such as Doliprane (Sanofi) and Efferalgan (formerly BMS, now Taisho) are available in both semi-ethical (reimbursed) and pure OTC versions, the latter often backed by TV ads, and it’s these latter SKUs which marketers have invested in over recent years that are most at risk.

Rapid regulatory change will be one of the themes at Nicholas Hall’s upcoming OTC.NewDirections Executive ConferenceTaking place in London on 14 November, the meeting will ultimately focus on the latest CHC Innovations and Technologies, with presentations from RB, Mundipharma, J&J and many more experts from CHC and beyond. To book your place or find out more, please contact jennifer.odonnell@NicholasHall.com without delay.

Ranitidine under regulatory spotlight

otcinaction

Two weeks ago, the FDA put out a statement saying it had learned that some ranitidine medicines were found to contain a nitrosamine impurity called N-nitrosodimethylamine (NDMA) at low levels, which it classifies as a probable human carcinogen. In response, the FDA is conducting an ongoing investigation, working with international regulators and industry partners to determine the source of this impurity. Though the FDA made clear it is not calling for individuals to stop taking ranitidine, its advice to people taking OTC ranitidine was to consider using other OTC medicines approved for their condition.

Last week, the FDA alerted healthcare professionals and patients to a voluntary recall of OTC ranitidine tablets (75mg and 150mg) labelled by Walgreens, Walmart and Rite-Aid, and manufactured by Apotex. Sandoz (Novartis) also said it would no longer be distributing generic versions of ranitidine. This was followed by an announcement over the weekend that US retailer CVS is pulling the No.1 ranitidine-based OTC brand, Zantac (Sanofi), from its shelves over the possible links to cancer. CVS’ own generic ranitidine-based OTC products will also not be carried in the stores moving forward.

heartburn-relief-products

Heartburn remedy Zantac is comfortably the No.1 ranitidine-based OTC brand, with global sales of around US$160mn (the vast majority of which are generated in North America). Chattem (Sanofi) markets Zantac in the USA in 75mg and 150mg OTC versions, while Aspen markets the brand in Australia and Perrigo is the UK marketer. In August 2018, Chattem extended its Zantac 150 line-up with two larger, value size 90-count SKUs, boosting sales significantly.

In a statement published in USA Today, Sanofi spokeswoman Ashleigh Koss said the company has no plans to halt shipments in the US market, adding: “The FDA reported that the levels of NDMA in ranitidine in preliminary tests barely exceed amounts found in common foods. We are working closely with the FDA and are conducting our own robust investigations to ensure we continue to meet the highest quality safety and quality standards.”

Take an in-depth exploration of the Lower GIs market in Nicholas Hall’s Lower GIs: Trends & Opportunities in Laxatives, Antidiarrhoeals, Probiotics, Antispasmodics & IBS remedies report. This key title includes dedicated case studies, NPD, innovative line extensions, coverage of 10 major markets, sales data and forecasts, plus much more! To find out more or to order your copy today, please contact melissa.lee@NicholasHall.com.

Global OTC market still subdued in Q2

otcinaction

New figures from Nicholas Hall’s OTC sales database DB6 reveal that, in MAT Q2 2019 (the 12 months to end-June 2019), the global OTC market remained subdued, recording an increase of just 3.6% to total US$137.9bn in turnover. North America generated growth of 2.6%, with USA (+2.7%) improving slightly compared to MAT Q1; however, the market continues to be held back by a lack of switch activity. Canada performed poorly with sales up by just 2.1%.

In Europe (+2.1%), the OTC market also remained sluggish, with most key markets posting low single-digit growth, while Russia (-0.6%), France (-1.4%) and Switzerland recorded declines. Germany (+0.1%), Italy (+2.6%) and the UK (+1.1%) all managed modest increases. Poland was the one bright spot with a rise of 7.9%, driven by high levels of NPD and Rx-to-OTC switch activity. Looking at the Middle East & Africa, Turkey (+15.8%) remained the fastest-growing of the Top 20 markets, driven by high inflation.

MAT Q2 2019 Top 10.jpg

As for Asia-Pacific, growth decelerated to 4.2%, with slowdowns recorded in China (+5.3%), India (+7.5%) and Australia (+1.6%), while sales in Japan (+0.9%) remained flat. Both China and India were impeded by a comparatively low-key cough & cold season and weakening economies. Latin America (+8.3%) continued to be the best performing region, with the two largest OTC markets Brazil (+7.7%) and Mexico (+9.3%) showing resilience in the face of a challenging macroeconomic landscape.

Vitamins, minerals & supplements still generate the largest share (30%) of the global OTC market by major category, but growth slowed in Q2 to 3.7%. Key categories like probiotics and multivitamins reported slowdowns in Q2 2019, especially in the USA, which is struggling this year to replicate the strong performance of its dietary supplements market in 2018.

Nicholas Hall’s Future Opportunities & Growth Drivers in VMS – A Strategic Review of Vitamins, Minerals & Supplements is now available! This all-new report analyses a range of VMS categories including multivitamins, probiotics, OTC tonic drinks, mineral supplements plus many others, alongside looking at the latest trends, brand studies and launch activity. Click here to purchase your copy or to take a look at the full table of contents! To find out more about this key report, or to order your copy, please contact Melissa.Lee@NicholasHall.com