Perrigo chief: Store brands big driver behind OTC growth, prepping launch of Mucinex equivalent
ALLEGAN. Mich. — Business for OTC store brands is expected to boom in the coming year, Perrigo chairman and CEO Joseph Papa told analysts discussing the private-label manufacturer’s first-quarter results during a conference call Wednesday, even as the growth rate across the entire OTC category slows. "What we are seeing though, is the continued acceleration of store brand as being the reason why we’re seeing the growth in our OTC category. For us to have a 9.4% growth in our OTC category, we think is a strong indication," Papa said.
Sales of cough-cold products could become a big driver behind improved OTC sales overall, especially as sales comparisons are placed against the significantly slow season last year. "While it is too early in the cough/cold/flu season to make too many comments, it appears to be tracking along a normal trend," Papa said.
Perrigo is currently prepping the launch of the store-brand version of Mucinex 600 mg, which had annual branded sales of approximately $135 million, Papa said. "We are in the process of validating additional batches of Guaifenesin ER 600 mg and continue to expect the launch of this product during our current fiscal year," he said, adding that additional as-yet-to-be-named products within that brand family will be introduced as well.
Perrigo also is gearing for a possible store-brand equivalent of Pfizer’s Nexium proton-pump inhibitor, which is expected to switch from prescription-only to over-the-counter. "We’ve stated that we believe there’s over $10 billion of new product that will move from prescription to OTC over the next five years," Papa said. "Obviously, Nexium is one of the largest of those products." Pfizer recently applied for a three-year OTC exclusivity on the switch, Papa reported. "As to whether or not they will get a three-year exclusivity right now, I would say that the operating assumption is most proton-pump inhibitors have received a three-year exclusivity as they have switched from prescription to OTC status. However, in this case, that product … already has a frequent heartburn indication," he said. "We’ll have to wait and see what the [Food and Drug Administration] decides on that question."
Perrigo is making a big move into the pet care business with its recent acquisition of Sergeant’s Pet Care. "The integration of their broad attractive portfolio of pet care products adds a new category to our consumer healthcare segment," Papa said. "We are pleased to add over 1,000 SKUs that Sergeant’s has in its broad portfolio of products, bringing Perrigo’s total number of SKUs to approximately 15,000 SKUs."
The most attractive new product expected to come out of its Sergeant’s Pet Care facilities is a new store-brand version to the Frontline product family, which has branded sales of more than $500 million in the U.S. market. "These are expensive products that can truly benefit from the addition of a quality, affordable, store-brand offering," Papa said.
Perrigo’s consumer healthcare segment net sales increased 9% to $450 million for the quarter ended Sept. 29 due to an increase in sales of existing products of $36 million (contract, cough-cold and smoking-cessation categories), new product sales of $13 million (gastrointestinal, cough-cold and dermatological categories) and $9 million in incremental sales attributable to the acquisition of CanAm. These combined increases were partially offset by a decline of $17 million in sales of existing products (e.g., analgesics and feminine hygiene categories) and a decline of $4 million due to discontinued products.
The nutritionals segment reported first-quarter net sales of $103 million, compared with $120 million a year ago as existing product sales declined $20 million, partially offset by new product sales of $3 million (infant formula category). The decrease in sales was due primarily to a decline in existing product sales in the vitamin, minerals and dietary supplements category driven by increased competition and increased retail shipments of infant formula placed in the fourth quarter of fiscal 2012 in advance of the planned July 1 shutdown of the Perrigo’s Vermont plant to prepare for the installation of a new packaging line.
Menasha Packaging receives award for Purell packaging
NEENAH, Wis. — Menasha Packaging on Wednesday announced receipt of two awards as part of the 69th annual National Paperboard Packaging Competition.
“Innovation and efficiency are cornerstones of the work we do every day at Menasha Packaging, so it is an honor to win these awards and be recognized by a panel of industry leaders,” stated James Snyder, general manager of Menasha Packaging’s Folding Carton facility, who accepted the award on behalf of Menasha Packaging.
Menasha Packaging received a Gold Award for the development of a 3-pack specialty carton used to visually showcase Purell’s hand sanitizer with Jelly Wrap carriers. The design showcased the product’s features while keeping efficiency in mind for the assembly and fulfillment process. The carton’s die-cut holes ensure the product is securely held in place while also allowing for maximum visibility for today’s hands-on shopper.
The company also received an Innovation Excellence award for its work with Group II Communications in the development of a paperboard novelty cap for McDonald’s. The Innovation Excellence category recognizes new and exciting package designs, designs that solve a problem in a unique way, meet or exceed market demands or take advantage of the benefits of paperboard packaging. Designed to mimic a ball cap, the novelty item is another option for McDonald’s franchisees to help encourage customers to get connected with the Team McDonald’s brand.
Judged by a panel of leading industry professionals, entries must be designed to distribute, market and protect a product, and must consist of 50% paperboard that is visible to the end user.
Absorption Pharmaceuticals launches men’s intimacy health solution
NEWPORT BEACH, Calif. — Absorption Pharmaceuticals recently launched Promescent, an over-the-counter lidocaine-based spray indicated for premature ejaculation. The product is presently available at www.Promescent.com, through doctors’ offices and independent pharmacies.
Created by a urologist, the spray is designed to absorb below the surface of the skin where nerve endings that control ejaculation are located.
Promescent is a fast-acting, on-demand solution that empowers men to take control and last longer for greater intimacy health satisfaction.
The standard size containing 60 applications retails for a suggested $79.95. Trial size retails for $19.95.