DUBLIN — Even though Perrigo's consumer healthcare sales for the first quarter ended April 1 reflected a 9% decline in sales to $583 million, Perrigo CEO John Hendrickson was bullish on the store brand OTC business in the American market.
"We expect to launch more than 100 new products in 2017," Hendrickson told analysts Wednesday morning. "Total new product sales are expected to be greater than $200 million in 2017."
"The ability to launch new products in various dosage forms, package configurations and sizes across the broad range of customers is a key core strength of Perrigo. ”That includes a store brand version of Pfizer's Nexium 24HR, which Perrigo expects to launch in the fall. Nexium 24HR generated $298.6 million in sales for the 52 weeks ended April 16 across total U.S. multi-outlets, according to IRI. Own brand versions of market leaders like Prilosec OTC and Zantac 150 dominate the antacid tablet market with a 39.2% dollar share of the overall $2.2 billion market. That means store brand versions of Nexium 24HR could add more than $100 million in annualized sales to the private label column.
"The ability to launch new products in various dosage forms, package configurations and sizes across the broad range of customers is a key core strength of Perrigo," Hendrickson said.
That 9% drop in business in the most recent quarter is primarily attributed to the sale of Perrigo's U.S. vitamin business, Perrigo noted in its earnings release. Indeed, Hendrickson noted that Perrigo's remaining OTC own brand sales growth outpaced both branded product growth and category growth. "[For example], looking at the cough/cold category, store brand growth outpaced the national brand during the first quarter's more severe cough and cold season as consumers acceptance of private label remained strong," Hendrickson told analysts Wednesday morning. "Additionally, the store brand category outpaced national brands in the smoking cessation category," he said, noting that Perrigo recently introduced a "White Ice" nicotine replacement gum to the category.
For Perrigo's most recent first quarter, new product sales of $25 million were driven by continued strong net sales of the store brand version of Flonase, Hendrickson added. "Overall, the [market dynamics] are encouraging, and exemplify the fact that consumers and healthcare systems in general, continue to search for more affordable alternatives to their healthcare needs [by buying private label].