Mead Enfamil Sales Buoy Bristol-Myers Nutritionals In Q2

Increased spending on consumer ads and promos for Enfamil infant formula helped the brand post worldwide sales gains of roughly 8% to $172 mil. for the second quarter, Bristol-Myers Squibb's Mead Johnson division said July 25.

To maintain the line's growth, Mead said it will continue its consumer ad spending, especially for "routine starter" formulas, as opposed to specialty formulas. Enfamil sales for the first six months were $383 mil., up approximately 5%.

The infant formula growth rates were particularly notable since they were not tied to contracts negotiated under the federally funded Special Supplemental Nutritional Program for Women, Infants & Children (WIC), the company noted. The WIC program is slated to receive about $4.14 bil. in FY 2002 (¹ (Also see "FDA funding" - Pink Sheet, 16 Jul, 2001.)).

Commenting on the possible addition of docosahexaenoic and arachidonic acid oils to its infant formulas, Mead said it has yet to submit a food additive petition to FDA requesting the agency permit their inclusion.

Martek Biosciences, which manufactures the DHA and ARA, has a licensing agreement with Mead and received Generally Recognized As Safe status for the oils in May (² (Also see "Martek Nutritional Oils Addition To U.S. Infant Formulas Forthcoming" - Pink Sheet, 21 May, 2001.)).

Mead Johnson could be reviewing sales trends in Asia, where it already has incorporated the oils into some of its formulas, before committing to adding them to Enfamil products in the U.S. The company said the market for the nutritional oils has been growing in locales such as Japan.

The Boost line of nutritional beverages complemented Enfamil's growth, with revenues rising 7% versus the year-ago period.

The Viactiv nutritionals also fared well, the company said. BMS just announced the sale of Viactiv calcium chews to Johnson & Johnson's new McNeil Nutritionals division and has decided to discontinue the rest of the line (³ (Also see "McNeil Supplements Nutritionals Portfolio With Viactiv" - Pink Sheet, 23 Jul, 2001.)).

Worldwide Mead Johnson sales, including foreign exchange, were flat at $442 mil. for the quarter and $944 mil. for the first half, the company said. Domestic sales for the three and six month periods were flat at $244 mil. and down 4% to $546 mil., respectively.

Consumer product revenues - consisting primarily of OTC analgesics - fell, however, which BMS attributed to increasing competition and a more crowded overseas market. Including foreign exchange, Q2 sales dropped 10.3% to $122 mil. and six-month sales slipped 12.9% to $236 mil.

Contributing to the loss was declining sales abroad; the brand had seen double-digit revenue gains this time last year (⁴ (Also see "McNeil Partnership With Takeda Leads To Tylenol Japan Launch" - Pink Sheet, 24 Jul, 2000.)).

The introduction of McNeil Consumer Healthcare's Tylenol to the Japanese market last fall could have affected Bufferin's overseas sales for the six months as they dropped 9.7% to $65 mil. Worldwide sales for the quarter and first half fell 11.1% to $40 mil. and 10.3% to $70 mil., respectively.

Domestic Excedrin sales slid 3.8% to $58 mil. for the quarter and 9.9% to $118 mil. for the six months, Bristol reported.

While sales of Excedrin Migraine appear to have slowed, BMS could regain share for the franchise with its recently introduced Excedrin Tension Headache Cooling Pads. The self-adhesive pads launched in the spring (⁵ (Also see "Excedrin Tension Headache Cooling Pads Five-Month TV Campaign Underway" - Pink Sheet, 2 Apr, 2001.)).

Total company sales continued to grow robustly for the quarter and year-to-date, with BMS reporting the recent divestitures of its hair care and orthopedics operations have helped the company concentrate on its "core medicine business."

First half sales grew 6% to $9.4 bil. and sales for the quarter rose 6.6% to $4.71 bil. Net earnings also improved for both the quarter and six months, reaching $1.2 bil. (up 10.1%) and $2.54 bil. (up 9.7%), respectively.

The overall figures do not include Bristol's discontinued Clairol hair care and Zimmer orthopedics businesses. However, reported earnings do reflect those businesses.