Sanofi-Aventis Purchases Chattem, Moves into Over the Counter Market

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Sanofi-Aventis, one of the world’s largest prescription drug companies, acquired Chattanooga, Tennessee-based Chattem Inc, the fifth largest over-the-counter drug company for $1.9 billion.

The French drug maker, whose US operations are based in Bridgewater, New Jersey, is seeking to expand its presence into the $20 billion U.S. OTC drug market because of losses projected in the coming months from expiring patents. In October, Sanofi-Aventis also purchased nutritional beauty supplement brand Oenobiol.

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SA spokesmen say the deal would be most beneficial with its popular antihistamine, Allegra. The company will seek to convert this prescription drug into an over-the-counter product. Other products currently made by Chattem include Gold Bond, Selsun Blue, Icy Hot, and ACT mouthwash, which Sanofi hopes to expand outside of the U.S.

Allegra (fexofenadine) is an antihistamine that reduces the chemical histamine in the body. Histamine is produced as a result of an allergen, and produces symptoms such as sneezing, itching, watery eyes, and runny nose. Tablets and capsules are used in children and adults older than six, and the oral suspension is approved for use in children ages 2 through 11.

Chattem CEO Zan Guerry said he was "excited" about the prospect of using the planned launch of Allegra as a springboard for "significant growth." Allegra was once the only medication approved for allergy symptoms and had $1.8 billion in sales in 2004. Since then, generic versions and competitive prescription products have become available, so conversion to OTC would help Sanofi capture some of the sales that are going to other drug makers.

This week Sanofi-Aventis also announce plans to discontinue two of its current products: epilvanserin (Ciltyri) for insomnia and idrabiotaparinux for the treatment of thrombosis in patients with atrial fibrilation. "Sanofi-Aventis is doing what it should be doing -- going through the R&D pipeline and dropping unprofitable and non-promising projects," said Kepler Capital Markets analyst Tero Weckroth.

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