5 March 2020 - Deborah Wilkes
Stada says it is now the “clear market leader in Russia’s consumer healthcare sector” following recent acquisitions. The German company has just recruited Sandoz’ Stephan Eder as executive vice president of its business in Russia and the Commonwealth of Independent States (CIS).
Quoting market researcher IQVIA, Stada said it had a 6.4% share of the consumer healthcare market in Russia.
Stada’s comments came as the company completed the previously-announced acquisition of a portfolio of around 20 OTC and prescription brands in Russia and the CIS from Japan’s Takeda for USD660 million. The deal was announced in November 2019 (click here to read the News story).
Peter Goldschmidt, Stada’s chief executive officer, said the transaction reflected the company’s “commitment to its operations in Russia”.
“This is an important strategic step for Stada,” commented Goldschmidt, adding that it positioned the company as the “leading player in a large and expanding Russian consumer healthcare market”.
The Takeda deal has lifted Stada from third to first place in the Russian consumer healthcare market, taking the German company ahead of OTCPharm and Bayer.
Stada has gained the Cardiomagnyl, Artra and Vitrum brands in Russia. They join the company’s existing consumer healthcare portfolio in the country which includes the Aqualor, Snup and Vitaprost brands. The combined consumer healthcare business in Russia has annual gross sales of around EUR278 million.
The deal also covers the Takeda products in Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Moldova and Uzbekistan.
Appointment of Stephan Eder
Commenting on the appointment of Stephan Eder, Goldschmidt said he was an “inspiring growth leader” with a “proven success record in Russia, Germany and the UK”.
Eder joins Stada from Sandoz where his most recent position was chief executive officer of Hexal and country head Sandoz Germany.
During a decade at Sandoz, Eder’s jobs also included head of the Russian OTC operation from mid-2010 to the end of 2013. Under his leadership, said Stada, the business had “almost doubled in size and strongly outgrew the Russian OTC market”.
Before joining Sandoz’ parent company Novartis, Eder was co-founder and chief financial officer of the startup drug discovery company 55pharma. He started his career at McKinsey.
Stada said Eder would join “mid-year”. He will be a member of the company’s global executive committee.
The company pointed out that it had invested more than EUR1 billion in Russia in recent years, making it the largest foreign investor in the Russian pharmaceutical industry.
Announcing the Takeda deal in November 2019, Goldschmidt said it was Stada’s “largest acquisition to date and will position us as a major player in a large and structurally growing market”.
He added that the transaction also “reflects the ambitions of Stada as we continue expanding the business internationally – both organically and through acquisitions – and continue generating significant operating efficiencies worldwide”.
Series of acquisitions
Stada has announced a series of recent transactions involving consumer healthcare assets.
In February 2020, Stada said it was strengthening its consumer healthcare presence in Europe by acquiring 15 brands – including Venoruton, Coldrex and Cetebe – from GlaxoSmithKline (GSK). The brands have significant sales in Russia (click here to read the News story).
Stada also recently announced that it was strengthening its consumer healthcare presence in the Asia-Pacific region by acquiring the FERN C product portfolio in the Philippines for an undisclosed sum (click here to read the News story).
In December 2019, Stada revealed that it was acquiring the pharmaceutical and consumer healthcare business of Ukrainian company Biopharma, including its Biosporin and Subalin probiotic products, for an undisclosed sum (click here to read the News story).
Goldschmidt said the acquisition would make the company an “important player in the Ukrainian pharma market with a strong local production footprint”.
In November 2019, Stada announced the purchase of Czech consumer healthcare firm Walmark for an undisclosed sum (click here to read the News story).
A few months earlier, in June 2019, Stada said it was acquiring a portfolio of OTC brands from GSK Consumer Healthcare for an undisclosed sum. The deal gave Stada five skincare products and a paediatric cough remedy. The company gained Oilatum and Savlon Antiseptic Cream as well as the Ceridal, Eurax, Polytar and Tixylix brands (click here to read the News story).
A year earlier, Stada boosted its consumer healthcare portfolio by acquiring the rights to Johnson & Johnson's Nizoral (ketoconazole) anti-dandruff shampoo in Europe, the Middle East and Africa (EMEA) for an undisclosed sum (click here to read the News story).
The acquisition spree follows the takeover of Stada by private-equity firms Bain Capital and Cinven in 2017.
Stada's financial performance
Stada’s consumer healthcare products are housed in its Branded Products division, which reported sales of EUR518 million (USD578 million) in the first half of 2019. This represented a rise of 11% compared to the same period a year earlier (click here to read the News story).
After adjusting for portfolio and currency changes, Branded Products reported sales up by 9%.
Operating profit at the Branded Products division increased by 12% to EUR95.2 million. Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) were up by 12% to EUR135 million, giving an EBITDA margin of 26.0%. Adjusted EBITDA increased by 12% to EUR134 million, giving an adjusted EBITDA margin of 25.9%.
Branded Products accounted for 41.0% of Stada's total sales in the first half of 2019, which were up by 11% as reported to EUR1.26 billion. Adjusted for portfolio and currency changes, sales were up by 8%.
The remaining 59.0% of Stada's sales were generated by the Generics business, which reported sales up by 11% to EUR745 million.