CINCINNATI — Procter & Gamble on Thursday announced the creation of a new partnership and joint venture with Teva Pharmaceutical Industries to be named PGT Healthcare.
“This unique and transformational partnership creates one of the broadest and deepest [over-the-counter] product portfolios and geographic footprints in the industry,” Teva president and CEO Shlomo Yanai said. “Each company’s leading brands will experience tremendous growth by combining our strengths. We will be better together.”
The joint venture will be headquartered in Geneva, Switzerland, and will operate in essentially all markets outside of North America. The partnership between P&G and Teva also will develop new brands for the North American market.
PGT Healthcare will focus on best-in-class development and commercialization of branded OTC medicines. The JV will bring together each company’s complementary capabilities and existing over-the-counter medicines. As a result, PGT Healthcare expects to accelerate growth for its parent companies and compete for leadership in the fast-growing, $200 billion consumer healthcare industry. The partnership will start from a solid base of approximately $1.3 billion in annual sales with the potential to grow to $4 billion in annual sales towards the end of the decade.
Under the joint venture, P&G will bring best-in-class consumer understanding, branding, design and in-store merchandising to Teva’s leading brands, such as Ratiopharm — one of Europe's best-selling generic brands. Teva will bring deeper, broader pharmacy distribution, including its pharmacy sales force and strong pharmacy relationships, broader regulatory capabilities and new technologies to P&G’s leading brands, which include Vicks, Metamucil and Pepto-Bismol.
The joint venture also plans to expand into new OTC categories. Today, P&G has a strong category presence in cough-cold, digestive wellness and women’s diagnostics. Teva’s portfolio includes many technologies and leading brands in other key OTC categories, such as vitamins, minerals and supplements, analgesics, medicated skin, and potential Rx-to-OTC switches.
In connection with the formation of this JV, P&G has sold its OTC plants in Greensboro, N.C. (Vicks production) and Phoenix (Metamucil production) and transferred the employees of both plants to Teva. As part of the partnership, Teva will be the manufacturer and supplier for the PGT Healthcare business and P&G’s North American OTC business.