Sanofi-Aventis has announced plans to acquire Chattem, maker of popular consumer products like Icy Hot pain reliever and Selsun Blue dandruff shampoo.
The $1.9 billion buy would be the second consumer-focused company purchased by the Paris-based drug giant in less than a year. The other one was France’s Laboratoire Oenobiol, which makes health and beauty supplements and nutritional products.
The moves should help Sanofi diversify beyond prescription drug revenue, which seems like a good idea since its 4 big drugs, Lovenox, Plavix, Ambien CR and Eloxatine will all face generic competition soon.
To accelerate its move into consumer health, Sanofi plans to release an OTC version of Allegra, its allergy drug, which has begun losing market share to Teva’s generic competitor.
Even before the acquisition of Chattem and with little presence in the US consumer products market, Sanofi managed to generate about $2 billion per year in world-wide OTC sales.
“The acquisition of Chattem (gives us) the ideal platform in the US consumer healthcare market,” Chris Viehbacher, CEO of Sanofi told BurrillReport. “Our ability to convert prescription medicines to OTC products will be enhanced by Chattem’s sales, marketing and distribution channels.”
Sanofi’s offered Chattem $93.50 per share, a 34% premium. The companies said the transaction should close in Q1, 2010. The deal would make Sanofi the fifth-largest consumer healthcare company in the world as measured by product revenues.
Sanofi was notably acquisitive in 2009. In addition to the purchase of Laboratoire Oenobiol, it bought BiPar Sciences and Fovea Pharmaceuticals, and a majority stake in a Russian insulin maker. Sanofi also acquired rights to an anti-MRSA vaccine produced by Syntiron and formed a research alliance with Cal Tech.