Sanofi-Aventis continues its shopping spree with a $1.9 billion deal for the consumer healthcare group Chattem. Aided by the support of Chattem's board, the French drugmaker will mount a tender offer for all of its stock at $93.50 per share. That's a 34 percent premium over Friday's closing price. The deal will strengthen Sanofi's consumer business, perhaps the only area the company hasn't bolstered recently via one buyout or another.
"[Chattem] will provide us with the ideal platform in the U.S. consumer healthcare market, which represents 25 percent of the current worldwide opportunity," CEO Chris Viehbacher (photo) explained in a statement. "In addition ... our ability to convert prescription medicines to OTC products will be enhanced by Chattem's leading sales, marketing and distribution channels."
Watch out, you purveyors of OTC allergy drugs: The one product Viehbacher mentioned by name for conversion to OTC was Allegra, its once-blockbuster antihistamine. Sanofi says it will ask regulators for the OK to sell Allegra over the counter, and upon approval will hand the marketing rollout to its new U.S. consumer healthcare unit.
Chattem CEO Zan Guerry said he was "excited" about the prospect of using "the planned launch of Allegra" as a springboard for "significant growth." When Allegra had no generic competition--way back in 2004--it posted some $1.8 billion in sales. Since then, other versions hit the market, including a 24-hour form and a combo pill with a decongestant, so the franchise delivered almost $1 billion in 2008 sales. But generic versions are already starting to debut under a Sanofi deal with Teva Pharmaceutical Industries. So conversion to OTC would help Sanofi capture some of the sales that are going to copycat drugmakers.
- read the companies' release
- check out the New York Times coverage