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TUMS U.S. SALES RISE 18% IN SECOND QUARTER

This article was originally published in The Tan Sheet

Executive Summary

TUMS U.S. SALES RISE 18% IN SECOND QUARTER and market share for the antacid increased to 48.2%, up four share points since SmithKline Beecham reported first quarter results in April and more than double the share held by the number two brand, according to the company. SmithKline attributed the continued growth of the Tums line to effective advertising and the recent launch of the Tums 500 chewable calcium supplement product.

TUMS U.S. SALES RISE 18% IN SECOND QUARTER and market share for the antacid increased to 48.2%, up four share points since SmithKline Beecham reported first quarter results in April and more than double the share held by the number two brand, according to the company. SmithKline attributed the continued growth of the Tums line to effective advertising and the recent launch of the Tums 500 chewable calcium supplement product.

The increase for Tums was achieved despite a generally "sluggish" market for OTC products in the U.S. where ex-factory sales of some brands were down for the quarter, SmithKline noted. However, SmithKline reported that its Oxy acne treatment and Aquafresh toothpaste brands "continued to gain market share as consumer purchases remained strong."

Boosted by strong results in Europe, worldwide OTC sales rose 17% to (British Pound)155 mil., or approximately $234 mil. (based on an exchange rate of (British Pound)1 = $1.51). With the "successful" launch of the Tagamet 100 OTC switch product in the U.K. in March, European OTC sales advanced 19.5% for the period, SmithKline Beecham said.

Worldwide oral care sales rose 1% in the second quarter to (British Pound)93 (or approximately $140.4 mil.). The firm noted that the new Aquafresh "floating head" toothbrush "increased sales as much as 50% across Europe" during the period. Nutritional health care products grew 4% to (British Pound)98, or approximately $148 mil., due primarily to expansion in international markets, the company said.

Overall consumer health care sales in the U.S. were up by only 2% as volume was "dramatically affected by continued destocking," SmithKline Beecham reported. U.S. sales for the period included the first time sales for prescription Nicorette gum, which is being marketed by SmithKline Beecham Consumer under an agreement with Marion Merrell Dow in anticipation of the product's Rx-to-OTC switch. In Europe, sales for consumer healthcare products rose 13% and profits were helped by "efficiency gains" following the disposal of the company's hair care business in 1993, SmithKline said.

Worldwide consumer healthcare sales increased 9% on a constant dollar basis to (British Pound)346, or $522.5 mil. Operating profit was up 6% to (British Pound)42, or $63.4 mil., the company said, noting that a slight decline in margins was due to increased R&D spending and advertising and promotional support for "key" brands. At comparable rates of exchange, operating profit for the consumer health care group increased 17%.

Helped by a 12.2% sales gain in international markets, Johnson & Johnson's consumer product sales increased 7.3% worldwide in the second quarter to $1.27 bil.

International sales for the period reached $646 mil., as the company recorded strong performances in the Asia/Pacific and Latin America regions. The gain also reflects the addition of RoC, the French skin care business acquired in December 1992.

Led by McNeil Consumer Products, domestic consumer product sales grew 2.6% to $624 mil., despite a decline in Monistat sales, J&J reported. The company cited "the intense competition in the over-the-counter market for vaginal yeast infection remedies" for the drop in Monistat sales. J&J's consolidated sales grew 10.6% in the second quarter to $3.92 bil., as the company's pharmaceutical and professional segments showed healthy increases. Consolidated net earnings rose 12.9% in the quarter to $559 mil.

Also citing lower volume for its vaginal antifungal products, Schering-Plough reported that second quarter sales for its health care products segment declined 9% compared with the previous year.

The company said in a July 20 release that "sales of over-the- counter products were lower, largely due to increasingly competitive markets for vaginal antifungal and cough/cold products." The firm noted that sales comparisons of foot care products also were lower due to the relaunch of the Dr. Scholl's insole line during the 1993 second quarter when the company recorded "heavy" trade purchases. Sun care products showed "solid" growth led by the Coppertone Kids line as well as the company's high SPF products, Schering-Plough said.

Schering-Plough's consolidated sales increased 6% to $1.19 bil. in the second quarter, led by the company's worldwide pharmaceutical business. Sales for worldwide pharmaceuticals grew 9%, including the impact of currency exchange and 10% excluding the effect of currency exchange. U.S. prescription pharmaceutical sales were "significantly higher," driven by "strong" sales of respiratory products including Claritin, which topped the $100 mil. mark in quarterly sales for the first time. The company's consolidated net income rose nearly 13% to $240.7 mil. for the quarter.

American Home Products worldwide consumer health care sales declined 3% to $344.2 mil. in the second quarter, pulled down by a 2% decrease in U.S. health care sales.

AHP attributed the U.S. sales decline to "decreases in the cough/cold and family planning product lines which were offset, in part, by increases in the lip care, analgesics and hemorrhoidal relief categories." International consumer health care sales declined 4% in the quarter due to lower sales of sleep-aid and analgesic products in Germany and declines by oral health care products in Brazil.

Excluding the effects of foreign exchange rates, international consumer health care sales would have decreased 2% for the second quarter, according to the company.

AHF's U.S. pharmaceutical sales increased 4% for the second quarter due to higher sales of Premarin, anti-inflammatory products, and veterinary products. Offsetting the increases, in part, were lower sales of infant nutritionals, oral contraceptives, the Norplant implantable contraceptive and cardiovascular products. Worldwide pharmaceutical sales rose 5% to $1.17 bil. for the quarter. The company's consolidated sales rose 4% to $1.98 bil. and net income also gained 4%, to approximately $300 mil.

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