Sanofi bags consumer healthcare specialist Chattem
pharmafile | January 5, 2010 | News story | |Â Â Chattem, OTC, SanofiÂ
Sanofi-Aventis looks set to become much bigger in over-the-counter pharmaceuticals with a $1.9 billion agreement to buy US company Chattem.
If completed, the acquisition will push the French drugmaker up from number six to number five in the global OTC market rankings.
Chattem will give Sanofi-Aventis a US sales and marketing engine that will help drive its own OTC business, which brought in a little under 1 billion euros ($1.44 billion) in sales in the first nine months of 2009 but which has little presence in the $20 billion US market.
The acquisition of Chattem “will provide us with the ideal platform in the US consumer healthcare market, which represents 25% of the current worldwide opportunity”, said Sanofi-Aventis chief executive Chris Viehbacher in a statement.
Sanofi-Aventis has made no secret of its desire to expand in OTC and other areas such as generics, making a string of acquisitions, such as Symbion and Zentiva in 2008 and Oenobiol in 2009, as part of a broader push towards diversifying its business.
High on the list of priorities for its OTC unit is to make the most of its big-selling antihistamine Allegra (fexofenadine), which is currently sold on prescription but is gearing up for a switch to OTC status.
Sales of Allegra in the first nine months of 2009 were 591 million euros, up 2%, but are likely to be impacted heavily when the product loses US patent protection in 2012. It is already experiencing some sales erosion there from Teva, which has been selling a generic version under a license agreement with Sanofi-Aventis since November.
The French drugmaker is looking to mimic the success of other big-selling OTC antihistamine switches such as Claritin (loratadine) from Schering-Plough (now Merck & Co) and Pfizer/Johnson & Johnson’s Zyrtec (cetirizine). For example, Claritin’s OTC sales of $350 million in the first three quarters of 2009 are now higher than prescription sales of the brand.
For Chattem – a 130-year-old company that is almost a family run business – the allure comes from being able to tap into future switch opportunities in Sanofi-Aventis’ large product portfolio, as well as the drug major’s sales and distribution network outside North America.
• Meanwhile, two French citizens have been charged by the US Securities & Exchange Commission of using insider information to buy Chattem shares ahead of the Sanofi-Aventis announcement. The two – Gilles Roger and Nicolas Condroyer – are accused of using the information to garner around $4.2 million in illegal profits. The SEC has obtained a court order to freeze the pair’s assets.
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