McKesson’s drug-distribution business aids Q2 growth
SAN FRANCISCO Healthcare and distribution company McKesson reported Wednesday that the Distribution Solutions segment of its business drove second-quarter growth.
Revenues for McKesson rose nearly 1.5% to $27.5 billion for the quarter ended Sept. 30, compared with the year-ago period. Similarly, the company’s second-quarter earnings rose from $1.11 per share in second quarter 2009 to $1.25 per share.
For its Distribution Solutions business, McKesson said revenues were up 2% in the second quarter, with gross profit rising to $1.09 billion from $960 million in second quarter 2009. The company attributed the increased gross profit margin to an improved mix of higher-margin products and services, including sales of OneStop Generics.
“I’m pleased with the outstanding performance in our Distribution Solutions and the ability of our team to consistently provide higher-value products and services to our customers,” said John Hammergren, McKesson chairman and CEO. “In particular, the market-leading generics programs that we have across all of our distribution businesses continue to play a significant role in our margin expansion.”
McKesson also saw additional increases across its U.S. pharmaceutical distribution, where revenues were up 1% for the quarter, as well as its medical-surgical distribution revenues, which rose 5%. The company also noted, however, that revenues were down 3% for its Technology Solutions segment.
Hammergren said that the company continues to expect to earn between $4.72 and $4.92 per diluted share for its fiscal guidance.
Matrixx reports Q2 decline but hopes new campaign will boost business
SCOTTSDALE, Ariz. Matrixx Initiatives on Monday reported a decline of 17% in net sales to $21.3 million for the company’s second quarter ended Sept. 30. The decline, Matrixx president and CEO Bill Hemelt explained to analysts Tuesday morning, represented a course correction of sorts. The sales decline was “due to lower upfront buys by retailers,” Hemelt said. Last year, all of the hype around H1N1 drove retailers to heavily stock in cough-and-cold supplies. This year, that industry level has dropped to more historical levels, Hemelt suggested, particularly across the drug channel.
Hemelt shared with analysts the company’s new advertising campaign, which begins airing in earnest a week following the November elections. The new campaign features three iconic TV moms — "The Brady Bunch’s" Florence Henderson, "Family Ties’" Meredith Baxter and "Seinfeld’s" Estelle Harris — who make up the “Mom Squad” and save cold sufferers from various treatment myths, such as “freezing out” a cold or consuming onions to help relieve the cold.
“We believe our new creative will continue to differentiate our products from general symptom relief products and help increase consumer awareness,” Hemelt said. “All of these [initiatives] will be supported by strong retail marketing support that has already begun,” Hemelt added during his conference call with analysts.
Last week, Matrixx released a new national survey of U.S. adults that found the majority of Americans are misinformed about what causes the common cold, and how and when they should treat it. Nearly three-quarters of consumers (72%) believed there was not much they could do about a cold except mask the symptoms and wait it out. The top five myths about colds that pharmacists reported were most difficult to debunk:
- Antibiotics can kill the germs that cause colds;
- Changes in the weather can cause colds;
- Getting wet and chilled can cause colds;
- Sitting in a draft can cause colds; and
- Avoiding changes in temperatures will help prevent colds.
Prilosec OTC taps two football stars for Living Proof campaign
CINCINNATI Procter & Gamble on Tuesday announced the signing of two NFL offensive linemen — New York Giants’ David Diehl and Minnesota Vikings’ Anthony Herrera — as spokesmen of the frequent-heartburn remedy Prilosec OTC. The two NFL players will be part of the Prilosec OTC Living Proof campaign to share their heartburn protection stories over the course of the 2010-2011 NFL season.
The Prilosec OTC Living Proof campaign will feature Diehl and Herrera’s stories about the importance of powerful protection on PrilosecOTC.com, and will be supported by television and digital advertising also featuring the players.
"David Diehl and Anthony Herrera are living proof that heartburn can happen to even the toughest people," stated Phil McWaters, Prilosec OTC brand manager. "These players will help people understand that frequent heartburn doesn’t have to get in the way of their daily activities and that Prilosec OTC can them help manage and protect against it."