At this week's J.P. Morgan Healthcare Conference in San Francisco, pharma industry execs repeatedly emphasized to Wall Street analysts the importance of their consumer product businesses. Highlights follow.
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1. Abbott Chief Financial Officer and Executive VP Thomas Freyman touted the performance of Abbott Nutrition, noting that PediaSure sales grew 20% in 2011 and the unit's ex-U.S. revenue has doubled over the past five years. Between now and 2017, Abbott Nutrition plans nearly 40 product launches across 30 countries, worth about $2 billion in incremental sales, Freyman said. The company also expects the operating margin for nutritionals to increase from the low teens today to more than 20% in that same time period.
With Abbott spinning off its research-based branded pharma business this year, nutritionals are expected to increase in importance for the Abbott Park, Ill., firm, as we reported here.
2. Merck & Co. President and CEO Ken Frazier echoed the common refrain that Merck Consumer Care -- rather than being a candidate for divestment, as analysts have suggested -- creates value because it is "complementary and synergistic with our human health business." The consumer business allows Merck a platform for likely Rx-to-OTC switch candidates including the antihistamine Clarinex, corticosteroid Nasonex and cholesterol drug Zetia, as "The Tan Sheet" reported here.
Frazier also touted the 3% increase in consumer business sales in the first nine months of 2011 and noted its "attractive operating margins, as well as strong underlying market trends."
3. Perrigo President and CEO Joseph Papa commented on his firm's potential benefit from the latest major branded OTC recall -- this time from Novartis, which recalled certain Bufferin, Excedrin, Gas-X and NoDoz products, as we reported here this week in "Health News Daily." Papa said Novartis' recall and temporary plant shutdown could represent a $70 million to $100 million opportunity for store brands as a full-year event. "There are some opportunities for us to get some incremental commitments from the retailers for additional product," he added.
4. Sanofi CEO Chris Viehbacher played up the benefits of an international OTC business, which the French firm continued adding to in 2011 with the acquisition of an Indian nutraceutical business from Universal Medicare, as we noted here. "When you look at the economic crisis, you want to be careful about how much business you have in government reimbursement, and the consumer isn't affected by this," he said.
Viehbacher also called Sanofi's U.S. launch of the switched OTC antihistamine Allegra last year "a fantastic success."
- Dan Schiff (d.schiff@elsevier.com)
