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The Huddersfield manufacturer on a growth path


The Huddersfield manufacturer on a growth path

Huddersfield manufacturer Thornton & Ross is invested in nurturing British brands, managing director Nigel Stephenson tells Arthur Walsh

In August, Nigel Stephenson will close on his first year as managing director of Thornton & Ross, the well-known Huddersfield manufacturer established just over a hundred years ago.

Stephenson, who prior to joining the company worked for companies including GSK, Novartis and Haleon in a range of European markets as well as the UK, is tasked with steering a complex ship. There are three distinct business units – consumer health, generics and specials, and he says the company wants to be seen as the “partner of choice” across all three.

“It’s very important for us to outgrow the market across all three units; we really need to master that complexity, and our business results suggest we’re doing well there,” he says, telling me that Thornton & Ross – part of the Frankfurt-based Stada group since a 2013 acquisition – is “at the top end of the industry over the last 12 months”.

He lists brands like Covonia, Nizoral, Savlon and Zoflora, commenting: “We are a great British business with fantastic British brands, all manufactured here in the UK, and we’re exporting those goods around the world.” More recent acquisitions include Opticrom eye drops, which it bought from Sanofi in mid-2023.

Aside from these consumer health household names, the company is “ramping up in biosimilars” and recently launched a generic rivaroxaban line – Stephenson notes the importance of this life-saving blood thinning drug to the NHS – and launched its first orphan drug in 2021. Stephenson argues that the breadth of the business provides a unique perspective as “lots of companies are going a different way” and says the company’s structure gives it “quite a different point of view on healthcare”.

The past few years have seen big pharma names – some of them listed on Stephenson’s own CV – cast off their consumer health portfolios to focus on prescription medicines, but he says Thornton & Ross is not going to follow suit any time soon: “We’re really focused around our three pillars; we believe it makes sense.”

Consumer health products are the biggest driver in revenue growth, “but the other two business units are growing well – specials in particular”, Stephenson says.

He describes Stada as “the fastest growing of all the top 10 OTC healthcare companies in the world, with more than double the rate of growth of the market as a whole”. Stada’s annual report, published in March, showed a 14 per cent year-on-year rise in sales. “Financially we are in a very healthy phase,” Stephenson says of Thornton & Ross’s own performance. In the 2023 financial year it made up 7 per cent of Stada’s sales, or around €250m (£211m).

A glance at the Companies House website suggests that Thornton & Ross made £11 million in profits in 2022, but Stephenson cautions that this is just one piece of the company’s wider profit picture. “There are over a dozen legal entities I’m responsible for. That structure, which is a result of Thornton & Ross having grown up through acquisitions, is something we plan to clean up.”

Five-year strategy

I speak to Stephenson a few days after a company-wide meeting where the strategy for the next five years was discussed. What can he tell me about the manufacturer’s plans?

For one thing, Stephenson says the company is eyeing a couple of P to GSL switches. He declines to elaborate on these plans as switch efforts are coordinated with the PAGB, the trade body of which he is a director. All he is prepared to say is that “there are a number” currently being worked on and that he welcomes the UK’s “liberal” approach to reclassifications, adding: “I think the Government sees a lot of potential in self care and in pharmacies.”

He also cites efforts to “reinvigorate” brands with a long history but have suffered from neglect. “This is something we’re good at,” he says, offering the antiseptic medicine cabinet staple Savlon as an example of a brand that had been left to languish by a big corporate and has been revived under new ownership. Thornton & Ross bought the brand from GSK in 2019, along with others including Oilatum and Tixylix.

“You will see us doing a lot more of that: taking those wonderful British brands and reinvigorating them,” he says. How do they go about this? “It’s really through understanding the consumer and then designing the right product proposition, marketing to the consumer and working with pharmacists – in particular where we are talking about the consumer healthcare space – in order to drive product recommendations.”

Thornton & Ross will “probably” seek to acquire more of these brands, he says. “We’ve got established links with pretty much all the major pharma and consumer healthcare players,” he adds. “They know we’re happy to buy and invigorate those brands and drive them.”

The Care brand – billed by Thornton & Ross as the number one seller in UK pharmacies – is another important focus, he says, with the range now numbering around 60 products. “The promise of the brand is to provide the quality of a leading brand at a better value proposition,” says Stephenson. The company is also growing its export trade “significantly”.

Thornton & Ross employs roughly 750 people. “For us, the right culture is an entrepreneurial culture,” says Stephenson. There is no ethos of central command and control. “We delegate a lot of empowerment to people fairly early in their careers, which makes it an attractive business to work for and develop your career with.”

He adds that a “big part” of his focus over the last year has been on hiring experienced leaders. The company also seeks to recruit young people from across the ‘Northern powerhouse’ region and has historic links with the University of Huddersfield.

Stephenson has worked in a number of countries across Europe, and the common thread running through all those markets – and the reason he is so passionate about his current role – is community pharmacy. “It’s played a key driving role for healthcare in those countries,” he says. “I believe it’s the same for us in the UK, and some of the changes we’ve seen over the last year have really emphasised that role.”

Another commonality between the UK and continental Europe over the past few years has been the rising number and increasing severity of medicine shortages. Last year, Stada CEO Peter Goldschmidt told P3Pharmacy this was a top concern for him, explaining that the industry and politicians need to get serious about producing more medicines within Europe, rather than relying on Asia.

What’s the picture at Thornton & Ross – do supply chain challenges keep Stephenson up at night? He answers: “Within Thornton & Ross, we have put a huge amount of investment into our local manufacturing – a multimillion dollar amount over the last five years, and in fact we want to grow that over the next five years. We are discussing with the UK Government about where we locate that investment – obviously, we’d like to make that here in the UK.

“We’re seeing significantly lower supply challenges this year than in previous years – which is different to the industry overall –particularly in generics. We’ve increased capacity significantly; we’ve invested in new machinery that’s more reliable.”

Stephenson adds that manufacturing in the UK makes the company “very close to the market,” which helps too.

Public attitudes

Late June saw the launch of Stada’s 2024 Health Report, which polled tens of thousands of people across Europe on their attitudes to self care and how they rate the health services available in their communities. Last year’s report looked at attitudes to health checks (four in 10 Brits said they were “too busy” too attend) and found that newer community pharmacy services like vaccinations are popular among the general public.

What most struck Stephenson about this year’s findings? “One of the biggest trends is the trust people have in pharmacists,” he replies. “In the UK, more than nine out of 10 Brits say they’ve only ever received good advice from a pharmacist. It’s helpful to see the strength in the concept that pharmacies are on the doorstep for British patients and consumers, especially in a context where we know demand for GP appointments is still rising dramatically.”

Trust in conventional medicine remains high at 92 per cent, roughly on par with the European average of 89 per cent, Stada found. Brits were more confident in their doctors than the European average (50 per cent versus 35 per cent) and 68 per cent said they rely on their doctor’s advice when making OTC purchases.

The Stada findings suggest there is strong public appetite for pharmacists to be given greater responsibilities so that new services can be offered and existing ones become easier to access as it becomes harder to see a GP. It also takes a look at what members of the public expect from their local pharmacies: 40 per cent want to be able to book an appointment online, 33 per cent want home prescription deliveries, 32 per cent want eye and hearing tests to be merged with pharmacy services, 23 per cent want education on specific disease topics and 21 per cent want technology “that lets customers better explore and understand their medications”.

The report explores the ways in which consumers are interacting with new technologies to answer their health queries, finding that 56 per cent Google their symptoms as a matter of course and one in 10 have started consulting AI chatbots to diagnose their ailments.

“The big trend here is that people are looking to use all of the latest tools that are available, and I think the more empowered people feel to take care of themselves, the better,” says Stephenson. “The role of pharmacists there is to help when patients come in with a self-diagnosis; they can check that and support them with more detailed information.”

The Stada findings chime with the growing awareness of community pharmacy’s potential in the UK, Stephenson argues. “We can only encourage people to use their pharmacies, so I’m delighted with the Government’s approach in commissioning Pharmacy First. It offers a great opportunity for many pharmacists to prescribe for the first time in England, and to offer recommendations for OTC products that may be complementary, or indeed instead of prescriptions where that may be medically appropriate.”

Grasping these opportunities is vital for pharmacies struggling with their overheads, he argues: “I’m conscious that it comes at a difficult time for pharmacies because of the squeeze on reimbursement. If you’re running a business, you really have to look at all revenue streams, and I think building self care based on that strong trust is really important.”

The Pharmacy First service at present is relatively tightly structured, and many pharmacies struggle with a low consultation-to-payment conversion rate because of the gateway criteria, especially with walk-in patients (GP-referred minor ailments patients are covered by the service, as Community Pharmacy England recently reminded contractors). Does Stephenson believe it should be widened to become a more general minor ailments service?

“I’d agree with that, and it’s something we’ve discussed at the PAGB,” he says. “My view is that Pharmacy First has been a big success for the nation’s health, and broadening it with the right level of reimbursement and greater ability for pharmacists to drive recommendations will only help us take advantage of this amazing resource we’ve got on our doorsteps.

“I think there’s a very bright future ahead for community pharmacies and for businesses like ours that support them.”

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