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Sanofi’s new Consumer Healthcare head Julie Van Ongevalle has only been in post for two months but the former Estée Lauder executive says she has already identified “major opportunities” to drive the business’ top and bottom line.

Addressing investors on Sanofi’s third-quarter earnings call, Van Ongevalle – who joined the French firm on 1 September – said the Consumer Healthcare operation had “untapped potential” when it came to leveraging consumer insights and maximizing the digital and e-commerce channel.

“We have the opportunity to reach our consumers through cutting edge digital platforms,” Van Ongevalle insisted. “I also think we need to focus to build true hero products and leverage strong consumer innovation.”

Addressing how Sanofi could achieve this, Van Ongevalle highlighted her previous experience of digital and brand-building gained from the cosmetics industry. At Lauder she was responsible for overhauling the digital strategy of the firm’s natural skin-care products division Origins to engage the next generations of consumers, from Millennials to Gen Z.

When Van Ongevalle’s appointment was announced back in May, Sanofi CEO Paul Hudson said her “deep knowledge of consumers and digital will be essential as Sanofi builds a standalone, agile and multi-local brands Consumer Healthcare business.” (Also see "Sanofi Names Estée Lauder Exec As Global Consumer Healthcare Head" - HBW Insight, 29 May, 2020.)

Making Inroads Into Digital

While Van Ongevalle will bring a new perspective to Sanofi, former Consumer Healthcare head, Alan Main, made a number of key inroads into the digital space.

Under his tenure, Sanofi took a leading role in creating the “ultimate hub of digital health innovation in Europe” through a partnership with start-ups developing new consumer health solutions in categories such as allergy and nutrition. 

The company also began experimenting with digital apps to enhance the consumer experience with its OTC products. In Germany – and since expanded to the UK – Sanofi launched its Buscomint irritable bowel syndrome line in combination with a food and symptom diary digital app, to help patients to better recognize individual triggers for their condition. (Also see "Sanofi Personalizing IBS Treatment With Digital Therapy" - HBW Insight, 9 Dec, 2019.)

Also in the UK, Sanofi ran a trial whereby visitors to the Buscopan and Dulcolax brand websites were directed to try an artificial intelligence-powered symptom checker for the “most appropriate health information and where to get treatment.” 

And most recently, Sanofi teamed up with Silicon Valley's Luminostics to develop a smartphone-based OTC test which can detect the virus which causes COVID-19.

Built On Strong Foundations

While Van Ongevalle used the earnings call to hint at some of her plans to drive growth, she highlighted that the Consumer Healthcare business was built on strong foundations, with three core strengths in particular: its global footprint, brand portfolio and future Rx-to-OTC switch opportunities.

“First, we already are a leading global player in CHC with strong positions in key markets, an existing footprint in China, and our exposure to emerging markets is a particular strength,” she said. “Second, we have an attractive portfolio of brands with strong brand equity across all categories we play in, and we clearly have a number of leading brands with still significant sales potential.”

“And third, you have, of course, heard that we have two major switch opportunities in Tamiflu and Cialis, which could lift our performance significantly above market growth in the coming years.”

Sanofi has expectations for Consumer Healthcare to launch OTC switches of erectile dysfunction treatment Cialis and flu remedy Tamiflu by 2026 and add around $1bn to the business’ top line.

The switch opportunity goes hand in hand with Sanofi’s move to operate Consumer Healthcare as a standalone business, giving it a nimbler structure, unshackled from Sanofi's Rx division.  

CHC Sales Slip Back

Van Ongevalle outlined her plans as Sanofi reported third-quarter sales at Consumer Healthcare down 1.1% at constant exchange rates to €1.04bn ($1.2bn).

A host of factors lay behind the dip in sales, Sanofi explained, including lower consumer footfall in pharmacy due to the COVID-19 pandemic, weaker demand for cough and cold products, particularly outside the US, and in the ongoing impact of the Zantac recall in the US.

Looking at the regional performance, Consumer Healthcare sales fell in both Rest of World and Europe, but advanced in the US.

 

Rest of World sales decreased by 2.8% to €467m, with lower in-person pharmacy traffic, especially in Japan, offsetting a strong performance in China, Sanofi said. In Europe, Consumer Healthcare turnover fell back by 1.5% to €324m, reflecting a lower demand for cough and cold products.

On a more positive note, US sales increased 2.7% to €250, which Sanofi attributed to growth in the Allergy portfolio, specifically for the Allegra and Xyzal brands. These gains had largely offset the impact of the Zantac recall, launched in October 2019 in response to the US Food and Drug Administration identifying low levels of potential carcinogen NDMA in ranitidine drugs, including some of Sanofi’s products.

Looking at Consumer Healthcare’s global performance by product category, Pain posted the biggest rise, with sales up by 5.0% to €291m. The Buscopan antispasmodic led the charge as its sales grew by 30.0% to €45m.

 

Nutritionals – which houses the firm’s dietary supplement brands – also enjoyed a strong quarter, with sales up by 4.2% to €159m.

Unsurprisingly, given the weak start to the season in Europe, Allergy Cough & Cold was the worst performing category, posting sales down by 13.4% to €236m.

Consumer Healthcare accounted for 11% of Sanofi’s total third-quarter sales, which advanced by 5.7% to €9.48bn.

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