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The Big Picture of Consumer Healthcare
Consumer Healthcare Investment - 15th November 2016
Francine Nieto, Global Offering Director, Consumer Health
QuintilesIMS
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Agenda
Key Market Trends
Routes to Growth
Summary
Global OTC Market Overview
Consumer Healthcare Investment - November 2016
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• MAT sales to end Q2 2016 from QuintilesIMS OTC Global Analysis
• Sales calculated at manufacturer prices
• Growths based on previous MAT to Q2 and use latest exchange rate across all time
periods
• Some qualifications:
– Sales from Pharmacy/Drug Store channels are included, as well as Mass Market in
some countries e.g. Germany, Italy, Japan, Netherlands, Portugal
– Companies include all OTCs from the corporation
– i.e. “J&J” includes Johnson & Johnson, McNeil and Neutrogena
– Bayer includes legacy Merck CH
– GSK-Novartis JV is a QuintilesIMS estimate of the GSK & Novartis CH joint venture
– Sanofi+BI includes all Sanofi and BI OTC business except BI China
The Basis for Figures in this Presentation
Consumer Healthcare Investment - November 2016
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The OTC market reaches $112 bn and remains attractive,
despite slowing growth due to the Cough/Cold season
Consumer Healthcare Investment - November 2016
Source: IMS OTC audits plus estimates (Excluding Venezuela)
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Developing regions continue to drive growth
Source: IMS OTC audits plus estimates (Exc Venezuela)
Developing
Regions
Total
OTC
Share of Sales 49%
Share of Growth 72%
5Consumer Healthcare Investment - November 2016
Categories of high interest are VMS and Digestive,
posting the highest growth rates globally
Source: IMS OTC Global Analysis
Global OTC – Key Categories
Value Share (%) Value Growth (%)VMS & Tonics
growth driven by
Europe (+7.4%)
and APAC (+9.8%)
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Agenda
Key Market Trends
Routes to Growth
Summary
Global OTC Market Overview
Consumer Healthcare Investment - November 2016
7
There is an “irresistible force” moving through society
towards health promotion rather than just treating illness
Awareness
• Media and advertising campaigns promote interest in maintaining health
Adoption
• Consumers around the world are buying into healthy lifestyles – but there is enormous potential for further expansion
Payers
• Many stakeholders recognise the long-term cost-benefits to preventative healthcare and health promotion
Future
• As a result more companies are entering into this expanding Consumer Healthcare space
Source: QuintilesIMS
Consumer Healthcare Investment - November 2016
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As OTC becomes increasingly attractive, players
become more diverse and the competitive set expands
Consumer packagedgoods
• Payer and generic pressure driving diversification
• Rx to OTC asset leverage
Pharma moving into consumer health
FMCG moving into consumer health
Pure play consumer health
• Higher consumer health margin and prices
• Leverage consumer and trade marketing muscle
• Leverage sales and marketing capabilities
• Economies of scale in supply chain
PharmaConsumer
HealthFMCG/CPG
A shift in thinking from: “Pharmaceuticals for the Consumer” towards:
“Consumer products about Health & Wellness”
Source: QuintilesIMS
Consumer Healthcare Investment - November 2016
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As a result, the OTC marketplace is evolving rapidly and
distinct forces are at play regionally and globally
• Wellness and prevention
through treatment and
cure to restoration along
the consumer journey &
OTC / OTX /Rx
continuum
• Online connectivity,
mobile technology,
smart health are
producing a connected
consumer to engage
with
• Increasing
medicalisation of herbal
and natural remedies as
part of diet, lifestyle and
wellbeing regimes
Convergence of Health &
Wellness
Rise of the connected
consumer
Trend towards Herbal &
Natural Remedies
Consumer Healthcare Investment - November 2016
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This shift of focus towards health & wellness leads to
the development new transversal market segments
Pharmaceuticals
NutritionPersonal Care
NutraceuticalsCosmeceuticals
Nutricosmetics
Topically applied
Vitamins, herbs, various oils, and botanical extracts typically added
May not claim drug-like or therapeutic effects
Provides medical or health benefits, includingthe prevention and/or treatment of a disease
Typically sold in the medicinal form of capsule, tablet, powder, solution
Sometimes associated with functional foods
Ingestible. Containing ingredients such as botanical actives, enzymes, proteins, and vitamins.Marketed specifically as beauty aids
Source: QuintilesIMS
Consumer Healthcare Investment - November 2016
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The OTC market place is evolving rapidly and distinct
forces are at play regionally and globally
• Wellness and prevention
through treatment and
cure to restoration along
the consumer journey &
OTC / OTX /Rx
continuum
• Online connectivity,
mobile technology,
smart health are
producing a connected
consumer to engage
with
• Increasing
medicalisation of herbal
and natural remedies as
part of diet, lifestyle and
wellbeing regimes
Convergence of Health &
Wellness
Rise of the connected
consumer
Trend towards Herbal &
Natural Remedies
Consumer Healthcare Investment - November 2016
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This has significant implications for innovation, where
use of social media and technology is commonplace
The most common, but a proven way to extend a brands life.
An ever-present in consumers’ daily life, but care must be taken in Pharma/Consumer Health.
Healthcare apps are growing rapidly with Cardio Diet and Women's health accounting for half the volume.
Devices can improve efficacy and control
Sensors provide the consumer with a direct feedback on their current state of health.
Synchro-TechTM has helped two actives with opposing dissolution profiles to come together
Innovation
Line Extensions
Social Media
Apps
Devices
R&D
Sensors
Source: QuintilesIMS
Consumer Healthcare Investment - November 2016
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And there is clear correlation between internet searches
on health or illness and OTC consumption
Consumer Healthcare Investment - November 2016
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Agenda
Key Market Trends
Routes to Growth
Summary
Global OTC Market Overview
Consumer Healthcare Investment - November 2016
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• There is an increasing leverage of combining science &
consumer insights to drive differentiation & growth
• Switch is increasingly being called out as a growth driver to
create new categories & penetrate existing
• Channel mix and GTM becoming more of a focus for
MNCs and local players
• Innovation is a key for major multinationals and regional
players are becoming more active
• Geo cover becoming a key battle ground as multinationals
and locals fight for new growth in faster growing markets
Routes to Growth
Consumer Healthcare Investment - November 2016
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Agenda
Key Market Trends
Routes to Growth
Summary
Consumer Healthcare Investment - November 2016
Global OTC Market Overview
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Understanding localization
and how to respond are
essential
Establishing strong foothold in faster growing geos will fuel future growth
Being strong in the right
categories will maximize
growth opportunities
As the Consumer Healthcare arena broadens, opportunities for innovation & growth continue to expand
Correct understanding of
opportunities is key to
support future investment
decisions
M&A activity in Consumer Healthcare will continue as key route to growth
Will we see new entrants
enter the market,
intensifying competition?
The OTC market continues to show steady growth and broadens towards CHC
In summary
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QuintilesIMS works with investing companies and private
equity funds throughout the entire investment lifecycle
Target screening
and identification
Helping with:
By employing:
Commercial due
diligence
Portfolio company
strategyExit value
maximization
Dedicated team
with deep sector
expertise
Experienced team
working on 100+
engagements p.a.
Leveraging expertise
and capabilities of the
broader QuintilesIMS
organization
Gold-standard, global
healthcare data and
informational assets
Consumer Healthcare Investment - November 2016
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Please contact us for more information
Consumer Healthcare Investment - November 2016
Francine Nieto
Global Offering Director, Consumer Health
francine.nieto@quintilesims.com
+44 203 075 4102
+44 7802 848288