After rough '12, PHCG looks to inject more life into business
Healthcare communications network PHCG is hoping to return to growth after a tame 2012, its CEO said this week. At an Investor Day gathering in London for holding company Publicis Groupe, Nick Colucci, president and CEO of Publicis Healthcare Communications Group, said, “Last year was the only year [PHCG] didn't grow in the last three.
“The two [years] before that, we grew nicely,” Colucci told analysts, crediting much of that to contract sales force company Publicis Touchpoint Solutions. As for 2013, he said, “In the second half, I'm confident we can start to show growth again.”
The glimpse he provided at the network's financials is important because, with 5,000 employees globally in health and wellness and 10 specialized agency brands under its umbrella, PHCG can be considered an industry bellwether. It also stands out because few, if any, in its agency peer group report earnings.
With healthcare plagued by slow growth, expiring patents and approval issues, one analyst wondered what's changing to make the network think its revenue picture will improve. Colucci cited three stimuli: the network's digital business, pharma efforts to extend the patent life of products, and emerging markets.
Half of PHCG business is now digital, Colucci said. Its digital agencies-of-record include Razorfish Healthware, formed last year from the merger of Razorfish Health and Publicis Healthware; Digitas Health; and Rosetta. The Razorfish Healthware merger trimmed the number of PHCG brands to 10. One of its other flagship agencies saw a management change last year.
Its geographic mix is also shifting. Emerging markets now account for 15% of business, Colucci said, with another 60-65% of the business in North America. “Three years ago, I didn't have one person in China or India,” Colucci recalled. “Today, we have the number-one footprint in China; in India we're in the top three.”
And while new drugs are not coming at the rate they did in the past, Colucci acknowledged, “We believe there's more opportunity in leveraging brands further into the marketplace.” As an example, he cited heartburn drug Nexium, whose Purple Pill persona was created by Saatchi & Saatchi.
The drug, which brought in $6 billion in US sales last year and is slated to lose patent protection in 2014, is moving from Rx status to OTC. Pfizer is slated to launch the OTC version, which has yet to be approved, following an agreement signed last year with the pill's originator, AstraZeneca.
PHCG told MM&M that Publicis Groupe's Leo Burnett handles the Pfizer-OTC advertising business, while Saatchi retains the Rx Nexium account.
Profits in both PHCG's educational and contract sales segments are below those of the Groupe. Added Colucci, “We're striving to be more profitable in the future.” While the network has “struggled” with its footprint in Europe, he said, it's starting to see an uptick in global markets, particularly the UK.