Sanofi-Aventis is betting its $1.9-billion purchase of Chattem can give it a US marketing platform for future Rx-to-OTC switch brands.
In a statement, CEO Chris Viehbacher said the acquisition of Chattem, set to close early next year, enhances its ability to manage such conversions in the US, starting with Allegra. That could prove useful as its prescription drugs come off patent.
Upon Allegra's conversion, Chattem will assume responsibility for the brand. The consumer products firm has a good track record as a niche brand marketer, especially in coming up with “innovative, value-added line extensions,” Jeffries analyst Doug Lane told MM&M
In 2003 it launched a $12-million ad campaign for the Icy Hot Back Patch, signing NBA star Shaquille O'Neal as a spokesperson for the Icy Hot line of topical analgesics.
The patch was an off-shoot of Chattem's topical pain-care segment, which has grown into a $95-millon business (in wholesale dollars). With its multiple line extensions, Icy Hot represents almost half that total, Lane said.
A Chattem official said O'Neal is still under contract as a pitchman for the Icy Hot line.
In addition, Sanofi will leverage Chattem's US sales, marketing and distribution network to market its OTC line—which includes Doliprane (acetaminophen), Maalox for heartburn and feminine product Lactacyd.