Stock Spotlight: Galderma

I'm stock picker Danielle Menichella and this is why I'm investing in Galderma for the Alliance Witan portfolio.

Galderma is a dermatology health company capturing growth across premium skincare, injectable aesthetics and therapeutic treatments.

It makes products people may know, including Cetaphil for sensitive skin, Differin for acne, Dysport for wrinkle treatment, Restylane and Sculptra for facial shaping, and prescription medicines for serious skin diseases like eczema, rosacea, psoriasis, melasma, non-melanoma skin cancer and the severe itching that comes with PN (Peripheral Neuropathy) a chronic neuro-immune disease.

What makes Galderma different is it covers the full range of skin needs, daily skincare, medical treatments and aesthetic procedures.

It's not just selling products off of a shelf, it's deeply embedded with dermatologists and aestheticians. Those are the professionals that influence what patients use. They train on specific products and tend to stick with brands they trust. That makes new launches easier and strengthens the existing portfolio.

The market's growing because skin health is becoming more important everywhere. In the US, people are spending more on treatments that help them look natural but refreshed. In China, Latin America and other international markets, skincare and aesthetics remain under penetrated.

Younger consumers are starting routines earlier, older consumers want to age well and more men are entering the category. People with acne, eczema, rosacea or sensitive skin want products that actually work, not just beauty claims.

Aesthetic treatments are also becoming more normal, more subtle and more widely available, they are not a one time purchase. Some products are used daily, while others need to be repeated on a regular basis.

Also importantly, much of this spending is not dependent on insurance, which means there is little reimbursement risk. The majority of Galderma’s sales come from aesthetics and skincare. These are chosen by consumers, and once people find a product or treatment that works, they are often reluctant to switch.

We think Galderma is attractive because it combines trusted brands, strong relationships with professionals, and a growing pipeline of proprietary products that should keep improving what it can offer patients and consumers.

They're not generic beauty products. Many are science-led treatments with clinical data, patents, regulatory approvals and physician trust.

Additionally, Galderma is unlikely to be disintermediated by AI, but AI could actually help develop drugs and personalised skincare faster and streamline supply chain logistics.

AI might also help drive demand for more skin care. People spend more time on their phones, looking at photos, using social media, they're bombarded with AI-enhanced images. They may become even more aware of their own skin and appearance, and strive to look like those enhanced images that can increase interest in products and treatment that deliver visible results from a trusted provider.