Sales and Marketing

Sinclair Global Operations
The newly formed Sinclair Global Operations, headed up by COO Christophe Foucher, is divided into:

• Country Operations (formerly operating companies)
• International Operations (formerly business development)

The principal focus of the restructured organisation is on improving execution, leverage, responsibility and accountability across the company. In addition the appointment of Jean-Louis Lamandé as financial controller for Sinclair Global Operations increases the level of financial input into the decision-making process.

Country Operations
During the full year 2009, Country Operations contributed £12.4m to total revenues.

France

The French operation continues to spearhead the changes within the organisation and has established the working model for Country Operations. During the period we appointed Celine Genty as Country Operations Director and we reinforced the marketing team to support our activity in the pharmacy channel.

In the dermatology channel we continue to leverage the strength of the existing French brands and the medical sales reps teams now have full coverage of 3,200 dermatologists.

In the pharmacy channel we successfully introduced a sell‑out team to support the pharmacy team and increase sell‑out at points of sale. This process of building real partnerships with pharmacies will be fully achieved in FY 2010 through the creation of a dedicated trainer-sales rep team visiting key customers. This organisation will be replicated in Italy and in Spain in the coming years.

There has also been an enhanced focus on direct sales to pharmacies with OTC promotions of Oxyplastine and Ephydrol. As a result, we have seen direct sales increase by 8% year on year.

Sinclair Pharma France contributed £9.8m to group revenues during the year.

Italy

At the end of the last financial year the business was restructured to focus on the therapeutic areas of acne, dry and sensitive skin and seborrhoeic dermatitis. In addition, the sales force has been reorganised to use agents rather than sales representatives providing greater flexibility and enabling improved coverage and targeting.

 
During the year, Italy saw the successful launch of Sebclair Shampoo, Sebclair Scalp Fluid, and new formula DermaChronic.

 
In Italy, we appointed Paolo Prioglio as Country Operations Director, reinforcing the marketing and increasing team the expertise in the business.
 

Sinclair Srl contributed £2.0m to group revenues.

Spain

Sinclair reinforced its presence in Spain through the acquisition of the remaining shares in Laboratorios Novo Pharma S.L. This move was strengthened with the appointment of Santiago Calavia Torres as Country Operations Director of Dermatology and renaming the entity Sinclair Pharmaceutical España. Spain has seen the successful launch of Sebclair and Papulex.
 

Sinclair Pharmaceutical España contributed £0.2m to group revenues during the period.

UK

During the first half of the year the UK business was restructured to focus on specialty dermatology sales. In December 2008 Sinclair increased its sales presence through a co-promotion collaboration with York Pharma. However as a result of the regulatory changes in the market, and as part of the organisational restructure, Sinclair closed its UK sales operation in June 2009, but continues to sell products through marketing partners.

Sinclair Pharma UK contributed £0.4m to group revenues during the period.

International Operations
International Operations incorporates Sinclair’s extensive network of marketing and distribution partners. This currently extends to deals in 94 countries and product sales in 59 countries. The network leverages the experience and local knowledge of our partners to extend the commercial reach of our product portfolio.

Sinclair continues to increase its global footprint and 2009 saw the continued geographical expansion of Sinclair’s product distribution with product sales of £9.6m. This was a result of 45 launches in 22 markets covering seven product ranges by the marketing partner network. Sinclair is also increasing the level of marketing support it gives to its partners, implementing a new objective of increasing product sell out, and ultimately generating more predictable income in relation to orders and re-orders.

As part of the reorganisation, International Operations are focusing on the USA, Germany, Israel, Poland and Algeria and limits its geographical expansion to key strategic markets such as South Korea, Russia, India, Turkey and Greece.

Licensing Revenues

During the year Sinclair recognised licence fees and milestones of £7.4m (2008: £4.8m).

The major components of this are:

• the agreement with Graceway for the sale of US distribution rights to Atopiclair cream and lotion for £2.1m
• the non-cash licensing agreement with BMG Pharma for the licence of Sinclair’s gynaecological portfolio whichcontributed £3.3m
• the non-cash licensing agreement with JB2 SA for alicence of Sinclair’s onychomycosis kit, whichcontributed £0.9m.

Sinclair also received several smaller licence fees including: £0.2m from a major animal health company to enable the company to evaluate the use of Delmopinol to treat or prevent periodontal disease in companion animals and £0.2m from OraPharma following validation of the Italian manufacturing site to be used for the production of Decapinol Rinse for the US.

 
During the period we also signed 65 new distribution agreements covering 27 products in 47 markets. By extending the commercial presence of our product portfolio on a global basis, we continue to make available to patients effective solutions for specific dermatological and oral health needs.

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