Novartis outsources production to bring back top-selling OTC brands to market

 BASEL, Switzerland — Progress at re-opening its manufacturing facility in Lincoln, Neb., has been slow-going, Novartis reported Thursday, but the company has contracted third-party manufacturers to resume production of Excedrin, Lamisil and Triaminic. First shipments to retailers were made in October. 

The products will be available to consumers over the course of the fourth quarter, Novartis announced. And it is unlikely that any shipments will come out of the Lincoln plant anytime this year, as the restart of commercial production is taking longer than the company originally anticipated.

"We've announced the launch of Excedrin Migraine, Triaminic, Lamisil and Excedrin Extra Strength," Brian McNamara, division head Novartis OTC, told analysts Thursday. "We're continuing to focus on bringing up our biggest brands at third parties, as we speak, to relaunch for next year. The margin impact is short-term."

"I'm still not happy with the progress that we're making in Lincoln," Joseph Jimenez, Novartis CEO, told analysts. "So we are ensuring our return to market through third-party manufacturers, which will reduce our dependence on the remediation efforts at Lincoln. … We're making progress, but it's just not fast enough, and we're returning to market with co-packers," he said. "We have very strong relaunch plans in place, and we're executing now to regain our market share."

And Novartis won't be getting out of the consumer health business anytime soon, Jimenez added, responding to an analyst question on what parameters would have to be met before Novartis considered exiting a particular division. "Consumer health plays a very important role. While it's not a huge division, it's still a division that pre-Lincoln generated over $3 billion in sales and will be a good grower," he said. "Strong brands, so strong consumer loyalty as evidenced by all of those consumers in the U.S. who are writing us and asking us to bring back Excedrin because nothing else works, in their mind. So these are very, very strong brands, and Consumer Health plays a very important role."