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Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and Procter & Gamble Company (NYSE: PG) today launched PGT Healthcare, their joint venture in consumer health care and over-the-counter (OTC) medicines. The Geneva-based joint venture will operate worldwide, except for North America, for which the partnership will develop new brands.
The companies said that PGT Healthcare, a new model in the industry, will focus on best-in-class development and state-of-the-art commercialization of branded OTC medicines, by combining each company’s complementary capabilities in the OTC medicines market.
Procter & Gamble executive Briain de Buitleir will be CEO of PGT Healthcare, and will be joined by Teva COO Eli Shani. Procter & Gamble president of Global Health Care Tom Finn will serve as the chairman of the venture's supervisory board.
Teva and Procter & Gamble plan for PGT Healthcare to become a leader in the fast-growing, $200 billion consumer healthcare industry, by expanding into new countries and product categories. The joint venture will start with a base of $1.3 billion in annual sales, and the companies expect to achieve double-digit annual growth to reach $4 billion in annual sales towards the end of the decade.
Teva president and CEO Shlomo Yanai said, "This unique and transformational partnership creates one of the broadest and deepest OTC product portfolios and geographic footprints in the industry. Each company’s leading brands will experience tremendous growth by combining our strengths. We will be better together."
Procter & Gamble chairman, president and CEO Bob McDonald said, "P&G’s partnership with Teva creates a combined set of capabilities that is unmatched in the industry. Starting today our combined consumer health care business will now offer more branded OTC products to more consumers in more parts of the world."
PGT Healthcare will combine P&G's consumer understanding, branding, design, and in-store merchandising to Teva’s leading brands, such as Ratiopharm. Teva will bring deeper, broader pharmacy distribution, including its pharmacy sales force and strong pharmacy relationships, broader regulatory capabilities and new technologies to P&G brands, which include Vicks, Metamucil and Pepto-Bismol.
Teva and P&G’s combined operations will now cover most key markets. Among the largest, fastest growing OTC markets in the world, P&G has a strong presence in the US, Canada, Brazil, Mexico, India, Indonesia, Australia, Italy, France, and the UK. Teva is strong in Russia, Poland, Ukraine, Germany, the Scandinavian countries, Venezuela, Chile, Peru, Japan, and Israel. PGT Healthcare will expand to countries not currently covered by either company, such as China.
Teva and Procter & Gamble will use PGT Healthcare to expand into new OTC categories, on the basis of each company's current products. Today, P&G has a strong category presence in cough/cold, digestive wellness, and women’s diagnostics, while Teva’s portfolio includes many technologies and leading brands in vitamins, minerals and supplements, analgesics, and medicated skin products. Teva also has potential prescription-to-OTC switches.
Several current Teva brands are local leaders and offer global or regional expansion potential. Some of Teva’s technologies can also be used almost immediately to expand P&G’s portfolio into new sub-categories worldwide, including in the US. For example, Teva’s portfolio includes most of the world’s leading allergy compounds, which could enable the expansion of Vicks into allergy treatment.
Teva's share price rose 1.7% on Nasdaq yesterday to $39.76, giving a market cap of $35.4 billion, and rose 4% by mid-afternoon on the TASE today to NIS 147.30.
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