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Personalised Nutrition

Sponsored by:

1

The future of self-care in a world of precision

Speaker:

Jude C. Uzonwanne, Principal, Strategy & Transaction Advisory, Asia Pacific, IQVIA

(Singapore)

Copyright © 2018 IQVIA. All rights reserved.

September 11, 2018

Jude C. Uzonwanne

Conference Presentation Document

IQVIA Asia Pacific

The Future of Self-Care

in World of Precision

3

IQVIA is one of the world’s largest and most focused Consumer Health advisers…

30+Years of consumer

healthcare experience

2,500Data scientists and

statisticians

6,000Service experts available

in 100+ countries

4,500+Technology professionals

20+Petabytes of unique, global

information

400,000Sources of social media

90%Global OTC sales captured

1,000,000Data sources (wholesalers,

pharmacies, etc.)

4

What IQVIA offers with Consulting Services

We offer clients a suite of tools and capabilities to support their ability to shape the consumer health ecosystem future…

Str

ate

gic

Gro

wth

INNOVATION AND GROWTH STRATEGYR&D productivity, concept development, pipeline analysis, Rx-to-OTC

SEGMENTATION AND TARGETING

Target market definition,

consumer segmentation

Op

tim

ize

d O

pera

tio

ns

DETAILED MARKET UNDERSTANDINGCompetitive and trend analysis, primary market research

FIELD FORCE STRUCTURE AND SIZING

Sales team design, coverage model,

goal alignment

GEOGRAPHIC EXPANSIONMarket identification, priority setting, emerging markets

OPTIMUM MARKETING MIX

Budget allocation, econometric model,

ROI by channel

CHANNEL OPTIMIZATIONStrategy development, GTM alignment, channel mix

PERFORMANCE MANAGEMENT

AND REPORTING

KPI mapping to objectives,

data needs, scorecard design

5

IQVIA Consulting Services APAC footprint

In APAC, our consumer health business is built around a network of consultants with in-field and in-depth country experience

• Extensive therapeutic area and market knowledge in

pharma / biotech, consumer health, medtech

• Functional expertise in areas of:

• Pricing & market access

• Commercial strategy & model

• Portfolio & product strategy

• Regulatory pathways

• Center of Excellence methodology to complement issue

based consulting skills

In APAC, IQVIA Consulting Services operates six consulting hubs

with over 200 consultants

Korea

17 Consultants

Japan

30+ Consultants

China

100+ Consultants

Southeast Asia

54 Consultants

Australia

22 Consultants

India

37 Consultants

1,600 offshore

6

OTC market size, share & growth by region

The APAC OTC self-care market is ~USD $18 Bn (~11% of regional pharma) with ~8% CAGR, in line with regional pharma growth

Source: IQVIA MIDAS, IQVIA analysis

APAC OTC vs Rx & overall pharma (US$ Mn, MAT Q1 2013-18)

89%

11%89%2013

89%

2017

11%2014

11%2015

106,569

12%

157,531

88%2016

11%89%

11%89%2018

117,303

128,645

139,531

151,305

Top OTC markets & 5-Yr CAGR (USD$ Mn, MAT Q1 2013-18)

21%

23% EU5

24%

2013 2017

17%

16%

23%

23%

21%17%

2014

21%22%

18%

22%

16%

20%

22%

2016

66,569

17%

20182015

76,601

23%

82,277

20%

28%

18%

17%

16%

23%

22%

21%

18%

LATAM

18%

US

APAC

19%

Others

15%

61,592

72,143

57,922

+6%

7.5%

0.8%

0.9%

13.2%

8.0%

5-Yr CAGR APAC OTC

APAC RX

5-Yr CAGR

8.2%

8.0%

APAC Pharma 8.1%

7

OTC market size, share & growth in APAC

APAC’s top OTC market is AU, followed by CN & IN, while top OTC TAs are alimentary & metabolic, dermatology & respiratory


APAC OTC market by ATC (US$ Mn, MAT Q1 2013-18)

36%

17,268

12%10%

2018

2017

2015

30% 11%

30%

11%

6%5%

6%

2013

12%

5%

6%5%

37%2014

11%

29% 11% 11%6%

5%37%

30% 11%

6%

30%

6%5% 37%

38%

10% 5% 38%

11%30%

2016

12,121

13,059

14,587

16,268

17,77411%

A (ALIMENTARY TRACT,METABOL)

R (RESPIRATORY SYSTEM)

D (DERMATOLOGICALS)

N (NERVOUS SYSTEM)

M (MUSCULO-SKELETAL SYSTEM)

OTHERS

APAC OTC market (2018)

Sales: USD $18 Bn

CAGR: 8%

Korea

Sales: USD $1.9 Bn

Share: 10.5%

CAGR: 3.3%

China

Sales: USD $3.8 Bn

Share: 21.5%

CAGR: 7.4%

Top APAC OTC market size, share & 5-Yr CAGR (MAT Q1 13-18)

India

Sales: USD $3.7 Bn

Share: 20.5%

CAGR: 12.3%

Vietnam

Sales: USD $1.2 Bn

Share: 6.5%

CAGR: 14.2%

Australia

Sales: USD $3.9 Bn

Share: 21.6%

CAGR: 8.7%

8

Put differently, the top APAC categories are Pain Relief, Digestive and Skin categories

Source: IQVIA MIDAS, IQVIA Confidential - Q1 2018 SMR, IQVIA analysis

Source: IQVIA OTC Global Analysis

9

OTC market by channel in APAC

APAC OTC is sold mostly through retail channels with average 7.3% CAGR, with top 5 markets being IN, AU, KR, PH & VN


APAC OTC retail market by country (US$ Mn, MAT Q1 2013-18)

18%24%2013

25%

29%

15%

27%

5%

2016

18%

28%

9%

5%

18%27%

12,658

30%

17%9%

15%

5%2014

8%14%

6%

26% 16%

11,641

9,007

8% 6% 17%2015

27% 14%

5%

2017

8% 15%

28% 31%

8,522

14% 9%2018

10,207

12,342

28%

VIETNAM

OTHERSPHILIPPINES

KOREA

AUSTRALIA

INDIA

APAC OTC market by channel (USD$ Mn, MAT Q1 2013-18)

70%

31%30%

29%

2013 2018

28%

69%

2014 2017

70%

30%

16,268

71%

2015

72%

2016

71%

12,121

29% HOSPITAL

RETAIL

14,587

13,059

17,26817,774+8%

8.2%

7.3%

5-Yr CAGR

10

OTC spend per capita & average prices in APAC

OTC spend per capita is highest in developed APAC markets, (driven by high prices)

Source: Secondary research, IQVIA MIDAS, IQVIA analysis

Average OTC prices in APAC by region (US$, MAT Q3 2015-17 )APAC OTC spend per capita by market (USD$, MAT Q3 16-17)

130

83

47

43

40

31

13

13

12

12

10

7

4

4

3

3

KR

HK

NZ

AU

TH

JP

BG

SG

CN

MY

APAC

VN

PH

PK

IN

ID

-3%

-1%

Y-o-Y growth

-1%

+10%

0%

-7%

-3%

+26%

-2%

-3%

+3%

+2%

+5%

+3%

+11%

+7%

Deve

lop

ed

ma

rke

tsL

es

s-d

eve

lop

ed

Overall decreasing growth due to lower

inflation & economic growth and

consumers buying less / cheaper products

AU expenditure

exaggerated by high

level of exports to CN

OTC spend per capita low but high growth due

to rise of middle class & disposable incomes,

health awareness, advertising & promotion

and growing retail access (pharmacy chains &

digital pharma retail)

8.23

8.76 8.62

2.162.33 2.44

1.90 1.93 2.00

0.52 0.56 0.60

1.10 1.15 1.19

2015 20172016

Australasia North SEA South APAC

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3%2% 4% 5% 10%

-5%

6% 11% 12% 13% 29%

0%

5%

-30%

-35%

-10%

10%

1%

15%

0%

-40%

ABBOTT

5-Year CAGR (2013-2018)

DANONE GROUPE

Y-o

-Y g

row

th (

20

17

-201

8)

GLAXOSMITHKLINE

SANOFI

JOHNSON & JOHNSON

BAYER

PFIZER RECKITT BENCKISER

NESTLE

UNILAB

Competitive landscape in APAC

GSK is the top OTC player in APAC with on-par growth, competing against other MNCs e.g. Sanofi and Abbott


Historical vs recent growth of key OTC players in APAC

(5-Year CAGR vs Y-o-Y growth, % )

US$ 500.0Mn

Above average growth

On par with average growth

Below average growth

12Source: Secondary research, IQVIA MIDAS, IQVIA analysis

Aging population, growth of digital, self-medication & health-consciousness are among the key drivers of self-care in APAC

Key trends & drivers Potential implications

Aging population• Currently, East & NE Asian markets account for 32% of world elderly

• By 2030, 60% of total population above 65 would be in APAC

• Enhance focus on elderly-related OTC product portfolio

• Develop innovative methods e.g. digital pharma retail to increase

OTC awareness & accessibility of aging population

Growth in middle class & overall disposable income• $12 spend per capita on OTC across APAC, led by AU ($139), JP ($83),

KR ($47), with highest growths in BG (26%), PH (11%), PK (10%)

• Improve product quality & branding through targeting attractive

consumer trends, allocating resources to high-potential segments,

and developing star / “hero” products

Rise of technology - mobile & digital and genetic• ~50% digital penetration, with ~2 billion internet users across APAC

• Growth of digital pharma retail on Alibaba / Taobao, Amazon, etc.

• Rise in use of genetic data to shape decision making

• Leverage on digital MCM – mobile app, social media, 3rd party sites

• Leverage on digital pharma retail to increase reach and enable

business-to-doorstep delivery

• Strike appropriate partnership choices to drive action e.g. GSK

Increased accessibility to OTC• Overall relaxation in digital, pharma & retail regulation across APAC

• Growth in pharmacy chains, cross-border & online-to-offline channel

• Optimize channel coverage with fast-growing e-commerce channels

• Partner local pharma with strong coverage & regulatory understanding

• Maintain focus on brick-and-mortar (50-70% OTC sales across APAC)

including non-pharmacy outlets (i.e. supermarkets ~25% OTC sales)

Increased self-care & medication• 85% of patients confident in their ability to take responsibility for their

health and access relevant online resources to do so

• Leverage on prescription-to-OTC switch & complementary medicines

• In-store promotions & engagement with pharmacists as they remain a

trusted source of info for OTC consumers

Increased health consciousness & awareness• CN is the world’s most health-conscious market, ahead of US, West

EU, JP & BRICS with >30% buying OTC in advance to stockpile at home

• Use of substantiated claims / RWE for increasingly savvy consumers

• Use of MCM across digital & traditional channels as increasingly

informed consumers leverage information from multiple sources

Increased preference for natural, non-chemical products• 73% in CN willing to trade up & pay premium for healthier products

• Move towards natural, organic ingredients where possible

• Focus marketing on product safety & certification

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Genetic testing market segmentation…for self-care players, likely focus is on the first segment

Take the example of genetics; at its core is a growing testing market that provides the data to inform decision making….

Note: 1. There might be overlaps of company business among different segmentations

Source: various companies, 23andme.com, Roche Diagnostics, Myriad Genetics, IQVIA Analysis

Direct-to-consumer tests Prevention and treatment tests Research and other tests

Target

customer

Examples

Key players1

• General population who has interests in

individual genetic information

• Pharma companies

• Government institutions

• Universities and research centers

• Population who wants early detection for

risk assessment and prevention of future

disease to improve health outcomes

• Patients who need companion diagnostics

(CDx) to a therapeutic drug to determine its

applicability, usually oncology patients

• Breast cancer: BRCA, HER 2

• Type I Diabetes: FOXP3 gene

• Lung cancer: EGFR, ALK, PDL1, ROS-1

• Human genome testing

• Disease research

• Drug development

• DNA variants with ancestry, weights, food

preference, etc.

• BGI

• Foundation Medicine

• Illumina

• Prevention Genetics

• BGI

• Roche

• Illumina

• National Institute of Health

• 23andMe

• Prenetics

• ancestry

• deCODEme

• Navigenics

Individual testing Research testing

*Note: Search volume for both ‘Anti Aging Skincare’ and ‘personalized Skincare’ indexed at 100% at

respective search volume in June 2015 to effectively show change in search volume over time. Total

search volume for ‘Anti Aging Skincare’ significantly larger than for ‘personalized Skincare’.

Genetics for example is now giving consumers the means to focus

on differentiated brands rather than broad based brands…

https://www.technologyreview.com/s/610233/2017-was-the-year-consumer-dna-testing-blew-up/https://www.forbes.com/sites/bernardmarr/2018/02/21/here-are-the-top-10-breakthrough-technologies-for-2018/2

5Source: Prenetics, IQVIA Analysis

MIT

Technology

Review

Forbes

https://www.technologyreview.com/s/610233/2017-was-the-year-consumer-dna-testing-blew-up/

https://www.forbes.com/sites/bernardmarr/2018/02/21/here-are-the-top-10-breakthrough-technologies-for-2018/2

1. Acne (18 SNPs)

Skin sensitivity to hormones & inflammatory response

to bacteria determine how prone a person is to acne.

6. Photoaging (12 SNPs)

Genetics & sun can act together to aggravate

photoaging in the following ways:

2. Dryness (4 SNPs)

How well our cell walls regulate the cellular water level

affects the hydration level of our skin.

a) Pigmentation (9 SNPs)

Skin pigmentation is caused by increased melanin

production & has high heritability.

3. Sensitive Skin (6 SNPs)

Over-reactive inflammatory mechanisms can cause

skin irritations, redness & heightened sensitivity to the

environment.

b) Tanning (15 SNPs)

Tanning is activated by UV light & protects the skin cells

from being damaged.

4. Glycation (5 SNPs)

The damaging effects of glycation include wrinkles,

dryness, poor skin elasticity, as well as acne &

rosacea.

c) Sunburns (4 SNPs)

Higher sun-sensitivity causes some people to be more

susceptible to sunburn than the others.

5. Antioxidant Deficiency (4 SNPs)

Lower antioxidant can leads to poorer defence against

free radicals & speeds up the aging process.

d) Wrinkling (2 SNPs)

The speed at which collagen is being produced &

broken down affects how prone we are to wrinkling,

poor skin elasticity & skin sagging.

And the technical capability to accelerate innovation is also

growing…as the library of SNPS from Prenetics indicates…

6Source: Prenetics, IQVIA Analysis

16

Map of the World – Circa 1300 AD

Source: Google Images, IQIA analytics

Given what could be different, how would you want to navigate to that future? What is the right map to use?

Map of the World – 21st Century Map of Chaoyang District - Beijing

Selecting the right tools – and in the right time frame as well as distance to the consumer – will be key success

factors

17

• Intentional Futures (IF) is a different approach

to strategy planning using creatively developed

scenarios

• IF provides client teams with a shared and

agreed upon future they want to work towards

• The IF outcome is not a single point

forecast; it is a visualization of the explicit

future sought by a client, and the path to

achieving that future

• IF process also tells clients 3 key facts:

- What the key decisions they need to make are

- What the transformative choices are

- What the early warning signs or “Alarm Bells”

are, and how to react to these

Source: IQVIA analysis

We recommend a different type of map – Intentional Futures – to help clients sense the future and prepare appropriately for it

• IF’s scenarios are built through an iterative

process involving a cross functional client

team and IQVIA facilitators

- First, the question is defined e.g. what is future

of self care in Asia?

- Potential variables that can shape or change

that future are defined, and prioritized via vote

- The top 2 variables are used to build the 2x2

scenario

- Next, an IF workshop is conducted to discuss

variables and refine story line

- One future is selected as the “Official Future””

- Core and transformative decisions are identified,

alarm bells are noted, and refresh schedule is

set

18Source: IQVIA analysis

For example, our IF approach allows us to see 4 possible futures based on how we combine 2 variables: innovation and regulation

Regulatory Support

Industry Mindset on

Genetics Based

Personalization

Experimental

Status Quo

Conservative Innovative

2

1 3

4

1: Head Winds

2: Status Quo

3: Bright Lights

4: Slow Burn

A

19Source: IQVIA analysis

Each future that emerges varies in a number of key ways, and leads to different strategic choices

Future Description Implications Radical Decisions Early Signs

1: Head Winds • Model of care different but not

finalized; CH players push

brand and product innovations

but regulatory openness limited

• Game of cat and mouse

as technology races

ahead of rules e.g. use

of mass personalization

nutrition supplements

• Create regulatory capacity

“finishing school” to help

regulators support industry

growth

• Growing pool of

unapproved or

delayed initiatives;

and constant

revision of rules

2: Status Quo • Basic model of care reliant on

HCPs at core; market and

regulators evolving slowly, and

responding to external stimuli;

pace of change limited

• Room for new entrants if

they can offer sexier

vision to consumers;

new brands can enter

and dominate

• Shake up operating and

innovation model; and push

regulators to support

changes

• MNCs announcing

changes to operating

model

3: Bright Lights • Model of care built around

ecosystem, with mutually

reinforcing innovation from

brands and regulators,

including new partnerships to

deliver care

• Ecosystem of care and

network of partners more

important; brands vital

only if playing clear role

or will be replaced

• Build genetic database as an

industry, and share de-

identified access for R&D /

product development

• Retire non-specific

compounds / brands

• More regulatory

experiments e.g.

faster path for Rx to

OTC; online retailing

of OTC and Rx

allowed; genetics

partnership

announced

4: Slow Burn • Regulatory reform racing

ahead of brand owners, with

market playing catch-up

• Creates room for market

innovators to step in and

close gap

• Online platforms will also

step in with new brands

• Intensify innovation and

reduce reliance on US/EU

• Grow direct local market

genetic intelligence

collection

• Regulators develop

forum to support

local market

innovators

A

Nestle

Invested nearly US$250 million in

personalizing nutrition.

Campbell Soup

Invested in a new nutrition-focused

startup that uses data from an at-home

test kit to make personalized food

recommendations tailored to an

individual’s unique DNA.

How should one navigate a future in which large ecosystem players are placing personalized nutrition bets?

Source: Prenetics, IQVIA analysis

Determine

where to playacross the Personalized

Nutrition value chain.

Options

1. End-to-end solution

2. Nutritional additive

3. Branding &

packaging

4. In-store consumer

experience

Consider

new threatswhere Personalized

Nutrition may impact

your business.

Examples

1. Consumer privacy

concerns

2. Scalability

Review

partnershipacross the Personalized

Nutrition value chain.

Options

1. Test for strategic

collaboration &

innovations

2. Bring forward new

solutions with

existing partners

3. Pursue new Direct-

to-Consumer

Channels

Assess

capabilitiesto enable Personalized

Nutrition.

Evaluate Competitive

Advantage

1. Customer

experience

2. Digital engagement

3. Achievement of

desired health

outcomes

One step is to deepen your partnership plays…


Insurance Partners

University Spin-off in

2009

120+ Members

Strong

US $50m+ funding

Presence in HK,

SG, MY, TH, VN,

PH, SA, U.K.

200,000+ DNA

samples processed

Including with some of Asia’s leading genetics players such as Prenetics


Investors include

Alibaba Group and

Ping An

• Prudential

• AIA

• HSBC

• FWD

• Aviva

• Muang Thai Life Insurance

Such partnerships are ultimately innovation driven cycles designed to help consumers build personal choice…


…and transform how nutrition and supplement companies choose to win in a genetics influenced world…


25

• Such wise action involves actively shaping the regulatory landscape and dialogue on the role of genetics, as well as

starting to agree ground rules for self governance

• For example, as an ecosystem of partners and competitors, each other’s actions will impact how regulators and the public

view us; the sins of one can be visited on all

• Therefore a good starting point is adopting a regulatory management system i.e. a “Genetic Rights Champion” not just

voluntary guidelines but reasonably enforceable protocols, the failure to comply with which should attract a sharp penalty

• These proposed protocols include but are not limited to:

- giving consumers control over what we term their Genetic Information Account (GIA)

- working with governments to fund the creation of GIAs at a national level;

- respecting national restrictions on data storage and export; protection of data privacy

- creation of aggregated, de-identified data lakes for R&D purposes e.g. identifying genotype clusters; and

- choosing to avoid development and marketing of products based on “bad” genetic information outside of the norm


Irrespective of how we shape consumer ideas and preferences, or compete, it is in industry’s best interests to do so wisely

26

How well do we listen to our consumers?

The key takeaway is that the future of precision and self-care is not pre-determined; you can shape the outcome by always tackling 4 questions:


1

Are our brands matching what consumers tell us they want?

2

Are our brands available where the consumer is at the moment of purchase?

3

Are our brands priced to reflect what consumers value?

4

OTC / Self Care

Brands

27

Please Contact Us for More Information

Jude Uzonwanne

Principal, Asia Pacific Strategy & Transaction Services

[email protected]

+65 8498 3452

28

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