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January 4, 2010
Volume 88, Number 1
p. 11

Sanofi Will Buy Chattem, Targeting U.S.’s Over-The-Counter Market

Pharmaceuticals: Deal will give French drug company access to lucrative U.S. market for over-the-counter products

Rick Mullin

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The French drug giant Sanofi-Aventis has agreed to buy Chattem, a U.S. manufacturer of over-the-counter (OTC) drugs and personal care products including Selsun Blue shampoo and Gold Bond foot powder. The deal, for about $1.9 billion, will create the world’s fifth-largest consumer health care company, Sanofi says.

The OTC acquisition follows a string of generic drug deals for Sanofi as the company moves to expand its global presence and gird against patent expiries. Its generics purchases over the past year include the Czech Republic firm Zentiva, Switzerland’s Helvepharm, Brazil’s Medley, and Mexico’s Laboratorios Kendrick.

“The acquisition of Chattem will be a significant milestone in Sanofi-Aventis’ transformation strategy and will provide us with the ideal platform in the U.S. consumer health care market,” says Sanofi CEO Christopher A. Viehbacher.

After years of eschewing OTC and generic drugs, big pharmaceutical firms now see them as a way to reduce their reliance on blockbuster prescription drugs. For example, Pfizer exited the OTC sector with the 2006 sale of its consumer health unit to Johnson & Johnson but is back in with the acquisition of Wyeth. Pfizer also has marketing deals with two Indian generics firms. Merck & Co. reentered the OTC segment with its 2009 acquisition of Schering-Plough. GlaxoSmithKline recently bought a stake in South Africa’s Aspen.

Zack’s Investment Research estimates that Sanofi generated OTC drug sales of about $2 billion in 2009 but little of it in the U.S. Zack’s puts the U.S. market for OTC health care products at about $20 billion, growing at a rate of 3% annually.

Chemical & Engineering News
ISSN 0009-2347
Copyright © 2011 American Chemical Society
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