About Deborah Wilkes

Transcription

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2 About Deborah Wilkes 25 years of reporting on the global OTC industry Co-founded OTC bulletin newsletter in 1993 Created UK OTC Marketing Awards Co-founded SourceOTC business development website in 2009 Launched OTCToolbox in June 2013 PLG/OTCToolbox

3 About OTCToolbox Website focusing on OTC business development and innovation worldwide Broad definition of OTC Mission is to provide ideas, intelligence and insights Publishes News, Briefings and Reports OTC Innovations review NEW IDEAS BETTER WAYS All can be purchased and downloaded immediately OTC Deals Database containing around 580 deals PLG/OTCToolbox

4 Unprecedented times in consumer healthcare Definition of unprecedented is never done or known before The pace of change in the consumer healthcare industry over the past few years is unprecedented During 25 years, I have never seen so many significant businesses change hands in such a short period of time PLG/OTCToolbox

5 Predatory times Either you eat or you will be eaten Meda s chief executive officer Dr Jörg-Thomas Dierks PLG/OTCToolbox

6 During 2014 Sweden s Meda Predatory times Escaped being eaten by generics company Mylan Gobbled up Italy s Rottapharm Madaus in its largest transaction to date PLG/OTCToolbox

7 However, at the start of 2016 Predatory times Meda could no longer escape Mylan Mylan is set to acquire Meda in a deal worth US$9.9 billion including debt Mylan will gain significant OTC sales PLG/OTCToolbox

8 OTC deal trends Analysis of around 90 deals added to the OTCToolbox Deals Database in 2015 and early 2016 Acquisitions, mergers and joint ventures involving OTC/consumer healthcare companies and/or brands Identified 10 key trends OTC Deal Trends 2016 Briefing PLG/OTCToolbox

9 10 key OTC deal trends 1. Mega OTC deals reshaping the global OTC industry 2. Pharmaceutical firms are including OTC businesses in asset swaps as they seek to optimise their portfolios 3. Generics firms are keen to build an OTC presence 4. Private-equity groups are buying and selling OTC assets 5. Assets in the vitamins, minerals and supplements (VMS) category, including sports nutrition, are attracting a variety of acquirers PLG/OTCToolbox

10 10 key OTC deal trends 6. Skincare assets are changing hands at a rapid pace 7. Deal activity is hotting up in emerging markets 8. Smaller players are keen to purchase OTC assets 9. Portfolio streamlining by leading OTC players is releasing assets 10. OTC consolidation looks set to continue PLG/OTCToolbox

11 1. Mega OTC deals reshaping the global OTC industry Opportunities to acquire leading OTC players generally few and far between over past 20 years But that changed in 2014, when three large businesses came up for grabs Novartis OTC business Merck & Co s Consumer Care business Belgian OTC specialist Omega Pharma Continued in 2015 Boehringer Ingelheim Consumer Health Care PLG/OTCToolbox

12 1. Mega OTC deals reshaping the global OTC industry GlaxoSmithKline and Novartis have joined forces in a global consumer healthcare joint venture Deal completed March 2015 GlaxoSmithKline has a controlling equity interest of 63.5% in the joint venture, with the remaining 36.5% owned by Novartis Expanded GlaxoSmithKline Consumer Healthcare business had pro forma 2014 sales of 6.1 billion Ranked first worldwide PLG/OTCToolbox

13 1. Mega OTC deals reshaping the global OTC industry Bayer has acquired US-based Merck & Co s Consumer Care business Deal completed October 2014 Expanded Bayer Consumer Care business had pro forma 2014 sales of EUR5.6 billion Bayer Consumer Care gained Claritin allergy remedies Coppertone suncare products Dr Scholl s footcare brand Ranked second worldwide PLG/OTCToolbox

14 1. Mega OTC deals reshaping the global OTC industry Perrigo has acquired Omega Pharma Deal completed March 2015 Omega Pharma s sales were approximately US$1.6 billion in the year ended 30 September 2014 Deal brings together store-brand specialist Perrigo s strong OTC presence in the US with Omega Pharma s strong branded OTC presence in Europe Perrigo says combined company is "a top five global OTC company PLG/OTCToolbox

15 1. Mega OTC deals reshaping the global OTC industry Sanofi in exclusive negotiations to acquire Boehringer Ingelheim Consumer Health Care Potential transaction announced December 2015 Asset swap Sanofi will gain Boehringer Ingelheim s Consumer Health Care business Boehringer Ingelheim will gain Sanofi s animal health business Merial Aim to close fourth quarter of 2016 Will be ranked first worldwide PLG/OTCToolbox

16 1. Mega OTC deals reshaping the global OTC industry Fierce competition for prized OTC assets produced some premium purchase prices Bayer paid US$14.2 billion in cash for Merck & Co s Consumer Care business 6.5-times 2013 sales of the acquired business 21-times the 2013 EBITDA of the acquired business Now working to globalise the acquired brands, which had a strong presence in the US PLG/OTCToolbox

17 1. Mega OTC deals reshaping the global OTC industry Highly-contested quest for a crown jewel Werner Baumann, a member of Bayer's Board of Management PLG/OTCToolbox

18 2. Pharmaceutical firms are including OTC businesses in asset swaps Money alone not always enough to secure OTC assets Asset swaps appeal to pharmaceutical companies seeking to reshape their portfolios GlaxoSmithKline and Novartis struck a three-part interconditional deal Formation of global consumer healthcare joint venture GlaxoSmithKline acquired Novartis global Vaccines business, excluding influenza vaccines Novartis gained a portfolio of GlaxoSmithKline s oncology assets PLG/OTCToolbox

19 2. Pharmaceutical firms are including OTC businesses in asset swaps Opportunities to build greater scale and combine high-quality assets in Vaccines and Consumer Healthcare are scarce. With this transaction we will substantially strengthen two of our core businesses GlaxoSmithKline s chief executive officer Sir Andrew Witty PLG/OTCToolbox

20 2. Pharmaceutical firms are including OTC businesses in asset swaps Bayer s acquisition of Merck & Co s Consumer Care business also came with a related transaction in pharmaceuticals The combined package allowed Bayer to secure Merck & Co s Consumer Care business, despite interest from rivals Boehringer Ingelheim and RB PLG/OTCToolbox

21 2. Pharmaceutical firms are including OTC businesses in asset swaps Proposed transaction between Sanofi and Boehringer Ingelheim is another asset swap Sanofi had previously stated that it wanted to strengthen its Consumer Healthcare business Boehringer Ingelheim says it wants to focus on businesses with an established global scale, or where a pathway to global scale can be achieved PLG/OTCToolbox

22 3. Generics firms are keen to build an OTC presence Very big news in 2015 and 2016 Generics giant Teva and Procter & Gamble formed PGT Healthcare consumer healthcare partnership in 2011 Teva is set to acquire Allergan s Actavis generics business, including the international OTC unit Mylan failed in 2015 with hostile takeover bid for Perrigo Mylan is now set to acquire Meda PLG/OTCToolbox

23 3. Generics firms are keen to build an OTC presence Perrigo represents the most attractive entry point for Mylan to apply its global manufacturing and supply chain expertise and broad commercial reach to the OTC category Mylan's chief executive officer Heather Bresch PLG/OTCToolbox

24 3. Generics firms are keen to build an OTC presence Mylan is committed and well-positioned to pursue the OTC segment independently given its global scale and capabilities Mylan's chief executive officer Heather Bresch PLG/OTCToolbox

25 3. Generics firms are keen to build an OTC presence The Meda transaction will give Mylan an approximately US$1 billion OTC business Mylan's chief executive officer Heather Bresch PLG/OTCToolbox

26 3. Generics firms are keen to build an OTC presence Several generics companies interested in OTC Germany s Stada is a good example Stada has made series of OTC acquisitions, including UK-based Thornton & Ross for EUR259 million in August 2013 Aqualor brand in Russia for EUR131 million in February 2014 Flexitol rights in UK and Ireland for 10 million in June 2014 AndroDoz and NeroDoz brands in Russia for EUR7.9 million in February 2015 PLG/OTCToolbox

27 4 Private-equity groups are buying and selling OTC assets Private-equity firms continue to pop up everywhere Acquiring all sorts of OTC assets Divesting existing portfolio businesses Providing financial support for smaller players PLG/OTCToolbox

28 4 Private-equity groups are buying and selling OTC assets Too many deals to mention today but here are a few examples from 2015 and early 2016 Mid Europa increases stake in Czech firm Walmark to 100% Laboratoire Cooper gets a new private-equity owner Cipla gives the go-ahead for a private-equity firm to invest in its recently-launched consumer healthcare subsidiary HRA Pharma gets new private-equity owners Swander Pace Capital acquires Captek Softgel International Swander Pace Capital acquires Swanson Health Products PLG/OTCToolbox

29 4 Private-equity groups are buying and selling OTC assets Swander Pace Capital forms Clarion Brands Deal announced November 2014 US private-equity firm Swander Pace Capital forms Clarion Brands to acquire six OTC brands from DSE Healthcare Solutions in North America Clarion was the third platform investment in the OTC industry for Swander Pace Capital Swander Pace Capital had previously invested in Prestige Brands and Insight Pharmaceuticals. In 2014, the latter was sold to the former for US$750 million in cash PLG/OTCToolbox

30 5. Assets in the VMS category are attracting a variety of acquirers VMS including sports nutrition attractive and fragmented Number of important VMS deals in recent years Variety of VMS acquirers, including Baby care specialists Food firms Generics companies Leading OTC players Private-equity firms Skincare companies VMS specialists PLG/OTCToolbox

31 5. Assets in the VMS category are attracting a variety of acquirers Too many deals to mention today but here are a few examples from 2015 and early 2016 China s Biostime acquires Australia s Swisse Wellness Deal announced in September 2015 Biostime specialises in infant formula and baby care products Paying A$1.39 billion or US$0.98 billion for an 83% stake Swisse Wellness has licensing agreement with PGT Healthcare Pfizer Consumer Healthcare boosts its presence in China by acquiring Treerly brand Vemedia acquires Sanofi s Oenobiol business PLG/OTCToolbox

32 5. Assets in the VMS category are attracting a variety of acquirers Sports-nutrition assets changed hands at a steady pace Food companies continue to step up their presence Growing appeal of category to broad range of consumers rather than just body builders and athletes Purchase prices for sports-nutrition businesses are relatively low Relatively strong growth in sales of sports-nutrition products compared to other consumer healthcare categories PLG/OTCToolbox

33 6. Skincare assets are changing hands at a rapid pace Unilever makes four skincare acquisitions in 2015 Dermalogica Kate Somerville Skincare Murad REN Skincare Walgreens Boots Alliance acquires UK-based Liz Earle Deal completed in July 2015 NBTY acquires UK-based skincare specialist Dr. Organic Deal announced in August 2015 PLG/OTCToolbox

34 6. Skincare assets are changing hands at a rapid pace Daiichi Sankyo acquires mail-order business Im Co, including Rice Force brand Deal announced in October 2015 Perrigo acquires ScarAway OTC scar-management brand Deal announced in August 2015 Weifa acquires Asan and Sana shower and intimate care brands Deal announced in December 2015 PLG/OTCToolbox

35 6. Skincare assets are changing hands at a rapid pace Vemedia acquires Sanofi s Oenobiol VMS business Deal announced in February 2016 Nestlé s dermatology specialist Galderma acquires certain assets of Innéov Deal announced in April 2015 PLG/OTCToolbox

36 6. Skincare assets are changing hands at a rapid pace LEO Pharma acquires Astellas Pharma s global dermatology portfolio Deal announced in November 2015 Almirall boosts dermatology presence by acquiring Poli Group Deal announced in December 2015 Alliance Pharma buys healthcare portfolio from Sinclair IS Pharma Deal announced in November 2015 PLG/OTCToolbox

37 7. Deal activity is hotting up in emerging markets RB Acquiring the condom and lubricants business of Brazil s Hypermarcas Taking up its option to acquire a number of OTC brands covered by its collaboration with Bristol-Myers Squibb in Latin America Pfizer Consumer Healthcare Acquiring the Treerly VMS brand in China Stada Acquiring Argentinian generics specialist Vannier PLG/OTCToolbox

38 7. Deal activity is hotting up in emerging markets Lot of activity involving Indian companies Cipla sets up consumer healthcare business and gives the go-ahead for private-equity investment in the business Emami acquires Kesh King in India Lupin makes acquisitions in Brazil, Germany, Russia, South Africa, and the US Piramal makes acquisitions in India Strides Arcolab makes acquisitions in India PLG/OTCToolbox

39 8. Smaller players are keen to purchase OTC assets Long list of smaller players keen to purchase OTC assets, including Damier Group DDD Lanes Health Moberg Pharma Product Quest Trimb Healthcare Vemedia PLG/OTCToolbox

40 9. Portfolio streamlining by leading OTC players is releasing assets Many of the leading OTC players have pruned their product portfolios in 2015 and early 2016, including Bayer Consumer Health GlaxoSmithKline Consumer Healthcare Johnson & Johnson s Consumer division Procter & Gamble RB Sanofi PLG/OTCToolbox

41 10. OTC consolidation looks set to continue Long list of companies hunting for consumer healthcare acquisitions Pharmaceutical consolidation looks set to continue and deals may include OTC assets Diversified pharmaceutical companies are under pressure to break up their businesses Remains to be seen if another major OTC player changes hands soon PLG/OTCToolbox

42 10. OTC consolidation looks set to continue Consumer healthcare is a highly-fragmented market that is ripe for consolidation Sanofi s chief executive officer Olivier Brandicourt PLG/OTCToolbox

43 10. OTC consolidation looks set to continue According to RB s chief executive officer Rakesh Kapoor, consolidation of the global OTC industry is set to continue He says the industry is very fragmented and fragmented industries eventually head for consolidation He does not believe the largest player in future will only have sales of US$10 billion and a market share of around 5% PLG/OTCToolbox

44 10. OTC consolidation looks set to continue According to RB s chief executive officer Rakesh Kapoor, consolidation of the global OTC industry is set to continue He says consolidation will produce a leading player with sales of between US$25 billion and US$40 billion The timeframe for this consolidation is uncertain PLG/OTCToolbox

45 Opportunistic While we were not actively seeking a buyer for our generics business, Teva presented an offer at a very compelling valuation Allergan's chief executive officer Brent Saunders PLG/OTCToolbox

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