Chattem's Allegra success buoys Sanofi diversification

For a data point on diversification, look no further than Sanofi's ($SNY) new Chattem unit. The French drugmaker snapped up U.S.-based Chattem to fortify its consumer healthcare business, and chief among the new unit's tasks would be the launch of over-the-counter versions of Sanofi's fading allergy blockbuster Allegra.

In an otherwise drab quarter, Sanofi was able to crow about that launch--$204 million in four months, putting Allegra near the top of its market segment, second only to Merck's Claritin. That helped deliver 18% growth in consumer healthcare sales to Sanofi. "We are quite proud confirming this achievement," Sanofi's president of global operations, Hanspeter Spek, said during the earnings call.

Now, a few hundred million isn't going to fill the gaping hole left when the clot-busting bestseller Plavix goes off patent. And it's not enough to pay back the $1.9 billion Chattem purchase price. But like other drugmakers that have beefed up their consumer healthcare divisions--or animal health, or generics, or contact lenses--Sanofi wasn't aiming for a one-shot replacement for patent-cliff drugs. There's an ongoing ego battle between the companies that diversify and those that don't. Remember Roche's shot at Novartis' diversification efforts? In this round, at least, the diversifiers score.

- see the story in the Chattanooga Times Free Press

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