Bidding starts for Nestle Skin Health

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According to a Reuters report, private equity companies Cinven and Advent have teamed up to table a joint bid for Nestle Skin Health, which sources believe values the company at CHF7bn (US$7bn). It is reported that other private equity companies, including Blackstone, KKR and Carlyle, are likewise poised to make bids, while sources also say that Merz Pharma is interested and looking for private equity partners. 

In terms of the timeline, Nestle’s Board of Directors decided to explore strategic options for the skin health business in September 2018, after concluding that future growth opportunities lay increasingly outside the group’s strategic scope. Information memos on the sale, being run by Credit Suisse and Evercore, are expected to be sent by the end of this month and first-round bids are likely to be submitted in early March.

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Nestle Skin Health divides its portfolio into two units – its range of largely Rx “medical solutions” marketed under the Galderma umbrella and its “consumer solutions”.  Differin Gel is one example of a Galderma Rx skin care medicine which has been switched to OTC status, gaining FDA approval in 2016 and launched in the US in early 2017. Despite being the first genuinely new allopathic treatment in the acne category, Differin sales only reached US$17mn in the brand’s first full year since switch, leading Nestle to revamp the brand in late 2017 with line extensions and packaging updates.

Nestle Skin Health’s key consumer brands are Cetaphil, Loceryl and Benzac, as well as the home treatment acne programme Proactiv. Cetaphil is its key OTC brand, according to DB6, thanks to its expansive range and wide skin care positioning, from eczema & psoriasis to acne and anti-itch. Cetaphil Dermacontrol and Cetaphil Restoraderm are both well-established in the US market, while Cetaphil also has a strong presence in Australia, Brazil, Germany and several Middle Eastern countries.

Nicholas Hall’s recent report, Dermatologicals: Trends, Innovations, Opportunities, analyses the Derma market from the global level down to individual category-by-category reviews. This key report also examines medical devices, cosmeceuticals and much, much more. It covers launch activity, innovations and emerging niches, spanning a range of categories, including eczema & psoriasis, cold sore treatments and wound care. To purchase your copy or to find out more, please contact melissa.lee@NicholasHall.com.

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US acne OTC market ready to pop

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It’s amazing that the OTC treatment of acne has been limited to benzoyl peroxide and salicylic acid treatments for more than three decades, but now US teens and adults suffering from the condition have new options in the form of a medical device and the pending launch of an Rx-to-OTC switch topical gel.

J&J has launched Neutrogena Light Therapy Acne Mask, said to harness the power of clinically proven technology to clear acne and allow skin to heal itself. The mask emits blue light to kill acne-causing bacteria, while its red light goes deeper to reduce inflammation. Use is simple, with people putting the mask on after cleansing their faces and pushing the button and letting it work for 10 minutes.

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The US$40 mask includes 30 treatments, and subsequent purchases of the Light Mask Activator for US$17 means the mask can be charged for another 30 treatments. Although there are many light devices for acne treatment available on e-commerce sites like Amazon, the cachet of the trusted leading OTC acne brand, Neutrogena, on the label, and the far lower price point compared to other devices makes this product a game-changer.

Meanwhile, Galderma (Nestlé) is getting ready to launch Differin Gel (adapalene), the first retinoid acne treatment to be available as an OTC when the FDA approved its switch from Rx-only status last summer. The topical drug will dramatically change the complexion of retail shelves with a new ingredient for a skin condition that can have a major quality of life impact on millions of consumers. The Differin website promises that the new OTC will be on retail shelves soon.

This month, OTC INSIGHT North America will cover the acne remedies market in more detail as part 2 of its skin care report. To learn more about INA, click below:

Nicholas Hall’s OTC INSIGHT regional periodicals

OTCs in Action Episode 58: Spots on her face

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OTCs are in Action this week in parental thinking: “You don’t need a new iPhone … those shorts are too short … those heels are too high … too much make-up!” Sometimes it seems I say no to everything my teenage daughter wants … but acne products for my lovely girl’s complicated complexion – I’ll buy anything!

So, Galderma’s proposal to launch an OTC gel version of the acne-fighting ingredient, adapalene, caught my attention. The Nestlé-owned company will present its case for switching the ingredient from Rx to OTC at the 15th April meeting of the FDA’s Nonprescription Drugs Advisory Committee. It currently markets adapalene-based OTC, Differin, in Russia and Greece. According to Nicholas Hall’s DB6 global OTC sales database, the brand generated sales of $2mn in Russia in 2014, and $1mn in Greece.

In the US, Galderma’s Rx portfolio currently uses adapalene in Rx acne treatments Epiduo (0.1% and benzoyl peroxide 2.5%), Epiduo Forte (0.3% / 2.5%) and Differin – available in 0.1% and 0.3% strengths.

If anyone needs a touching reminder of those terrible teen troubles, join the 3mn viewers of Charlie McDonnell’s acne song (which sported a pop-up ad for Neutrogena skin care brand from J&J during my last visit to the site).