Merck consumer slips 4%

A 4% slide to $546 million in consumer health care product sales in its latest earnings period likely is not evidence that would push Merck & Co. Inc. toward deciding to keep the business. The Whitehouse, N.J.-based pharma firm said April 29 that product divestitures and slow allergy product sales in North America during its fiscal 2014 first quarter held back consumer product growth, which also took a 1% hit from foreign currency exchange rates. While Reckitt Benckiser Group PLC and Bayer AG are reported to be bidding for Merck’s consumer business, which includes the Claritin antihistamine, Centrum vitamin and Coppertone sunscreen brands, CEO Kenneth Frazier said during a same-day earnings call that the firm has not decided whether to divest the business its animal product business. Merck noted in its release that sales of OTC Claritin products slipped 4% from the year-ago quarter to $170 million.

Consumer helps make Sanofi diverse

Consumer health product sales growth of 18.6%, helped by the launch of the Nasacort 24HR OTC switch, likely influences Sanofi CEO Chris Viebacher’s statement that the firm is not looking to enter the multi-variety merger and acquisition trend spreading across the pharma industry. Sales of Nasacort 24HR (triamcinolone nasal spray), launched in the U.S. in February by Sanofi’s Chattem Inc. subsidiary, were $60.8 million (£36) and total consumer product sales reached $1.5 million in the firm’s fiscal 2014 first quarter Also see "Martek/Mead Agreement" - Pink Sheet, 22 May, 2006.. According to the French firm’s April 29 earnings statement, other leading consumer products for Sanofi during the January-March period were Allegra Allergy, also marketed by Chattem, up 14.1% to $175.6 million, and the Doliprane acetaminophen line sold outside the U.S., up 7.2% to $148.6 million. Other pharma firms might want to add or trade assets to diversify or might look for merger deals to stoke their pipelines, but Sanofi is not in either of those positions, Viebacher said during a same day earnings call. “We have already much greater degree of diversification than some of our peers,” he said, adding, “There's not an awful lot of reason or not the same motivation to do things.”

Bayer keeps eye on consumer prize

Bayer AG CEO Marijn Dekkers says the firm needs additional assets to reach its goal of being the largest consumer health care product firm, but he defers on saying whether the German firm is bidding for Merck & Co. Inc.’s consumer business. “It’s an important business for us. We want to be number one, so we need significant organic growth and bolt-on acquisitions,” Dekker said during Bayer’s April 29 earnings call. He added Bayer “ambition has not changed because” GlaxoSmithKline PLC’s and Novartis AG’s recently announced consumer product joint venture. Bayer and Reckitt Benckiser Group PLC are reported to be bidding for Merck’s consumer business. Consumer product sales in the firm’s fiscal 2014 first quarter were flat, up 0.6%, at $2.5 billion (€1.78 billion) adjusted for the impact of foreign exchange rates, according to the firm’s same-day earnings statement. Overall sales increased by 8.4% to $14.7 billion on a currency adjusted basis and net income increased 22.7% to just short of $2 billion.

Incentives, China slow USANA growth

USANA Health Sciences Inc.’s fiscal 2014 first-quarter net earnings decrease 7% due partly to higher distributor incentive expenses linked to price discounts and compensation plan enhancements the firm started in 2013. Additionally, with distributors in China adopting a “wait and see mentality” following Chinese regulators’ crackdown in direct sellers, the Salt Lake City-based firm’s sales in the country during the January-March period were “greatly reduced,” said CEO Dave Wentz during an April 30 earnings call. Asia-Pacific region net sales increased 13% to $118.6 million, with China leading the way at 12% growth, but quarterly sequential sales for this region declined 1.1%. “We believe that much of this market softness is due to the increased media and regulatory focus in China on direct sales organizations,” Wentz said. With sales in the U.S. down 6.5% primarily due to price discounts allowed in the firm’s auto-order program, U.S.-Europe region sales were flat at $63.8 million. USANA lowered its full-year guidance for net sales by $20 million to a range of $770 million and $790 million and for earnings per share by 30 cents to between $5.50 and $5.65.

Ukraine changes cost Mannatech

[Mannatech Inc.]’s fiscal 2014 first-quarter net income dips substantially to $200 million, 8 cents per diluted share, as the multilevel marketer of nutritional supplements suspended operations in Ukraine and as its active North American distributor ranks fell 12.1%. The Coppell, Texas-based firm’s net sales for the January-March period increased 3.1% to $43 million and income from operations jumped 113.7% from the year-ago period to $1.4 million, or 3.2% of net sales, according to the firm’s April 30 earnings statement. The halt in Ukrainian operations generated charges to earnings of $200,000 related to operations and $300,000 in inventory reserves due to the reduction in projected demand for Ukraine and European countries, Mannatech said ([A#05140331001]). Operations outside of North America accounted for approximately 52.8% of consolidated net sales, up from 50.8%. North American net sales were flat at $20.3 million, down 1%, million, or 1.0%. Worldwide, Mannatech recruited 25,600 new distributors and ended the quarter with approximately 246,000.

Vitamins strengthen Church & Dwight

Church & Dwight Co. Inc. expects more sales growth from its L’il Critters children and Vitafusion adult gummy vitamin lines as it boosts advertising and distribution and launches line extensions. While competitors’ coupon discounts and other promotions slowed Church & Dwight’s sales in household product categories, sales of the firm’s personal care products, including vitamins and oral care products, during the firm’s fiscal 2014 first quarter period grew 3.7% to $240.8 million, according to its April 29 earnings release. The Ewing, N.J.-based firm’s total sales were flat at $782 million, prompting a tightening in its full-year guidance from 6-10% growth to 7-9%, and for organic sales growth to be at the low end of its 3- 4% range. But Church & Dwight is not tempering its outlook for L’il Critters and Vitafusion sales. In a same day earnings call, CEO James Craigie said the firm expects double-digit growth for the products again this year, “driven by the launch of new vitamins for kids and adults, increased retail distribution across the full line of products and increased marketing spending.”

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