European Mid-Caps
Pierre Fabre: Medicalization, Convergence & the Rise of ‘Onco-Dermatology’
Iconic French skincare specialist, Pierre Fabre has been enjoying a hot streak of late, with its dermo-cosmetics business registering hefty sales growth of more than EUR 350 (USD 392) million since 2014. It is, however, the company’s unique positioning right at the confluence between the worlds of medicines and cosmetics that stands out as its most distinctive characteristic.
Iconic French skincare specialist, Pierre Fabre has been enjoying a hot streak of late, with its dermo-cosmetics business registering hefty sales growth of more than EUR 350 (USD 392) million since 2014. It is, however, the company’s unique positioning right at the confluence between the worlds of medicines and cosmetics that stands out as its most distinctive characteristic.
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“There is a strong link between health and beauty… While many diseases have a negative impact on outward appearance, treatments can equally produce negative side effects on the skin of patients,” explains global CEO, Eric Ducournau. “However, studies prove that patients who feel good in their skin are in a considerably better position to fight disease and are more compliant with treatment.”
Ducournau continues, “To better reflect our focus on patients’ health and well-being alike, we have recently changed our company’s motto to ‘Taking Care, Living Better’. In line with this new vision, the two business divisions of the Group [oncology and dermatology] are becoming increasingly close to each other. This move is being nurtured by both patients’ needs and market realities.”
While many diseases have a negative impact on outward appearance, treatments can equally produce negative side effects on the skin of patient
“Medicalization stands at the core of our dermo-cosmetic business model, which entails significant R&D investments – an approach typically associated with the development of prescription-based pharmaceuticals,” reveals Ducournau. “We are, in fact, the only cosmetics company able to publish clinical results for our entire portfolio in prestigious medical publications such as the British Journal of Dermatology… In order to differentiate ourselves from competitors and remain the preferred partner of choice for pharmacies and patients alike, we need to be able to demonstrate our products’ efficacy and safety to dermatologists.” Indeed, the company takes pride in investing more in R&D than any of its direct competitors: roughly five percent of revenues from the dermo-cosmetics business line being re-injected right back into product development and investigation of frontier fields like skin micro-flora.
Even the distribution part of the business is undergoing unprecedented convergence. “In oncology, the physician used to be the key stakeholder to consider for prescription drugs, and pharmacies were only seen as one part of the distribution channel; nowadays, we have to consider the entire chain, given that oncology treatments are making their way into the retail market. For instance, in France, cancer drugs are increasingly being delivered by pharmacies instead of hospitals. As a result, we now have to talk about oncology with pharmacists and their staff so they are able to advise patients, something Pierre Fabre has been doing for decades in the dermo-cosmetics and OTC areas,” recounts Ducournau.
“Taking into consideration these aspects, our ambition moving forward is to continuously integrate our two main business divisions to take advantage of these synergies,” he concludes.
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