Sanofi-Aventis to acquire OTC maker Chattem

NEW YORK This is further substantiation that the business of over-the-counter medicines, particularly those sold in the U.S. market, is a key growth driver for pharma companies. If you weren’t convinced when Pfizer re-entered the OTC market with its acquisition of Wyeth, then you certainly should be convinced now.

Sanofi is no stranger to the business of OTC. The international pharmaceutical conglomerate generated $2 billion in OTC sales worldwide in 2009, none of which out of perhaps the largest market in nonprescription medicines, representing more than 25% of worldwide marketshare, the United States.

With the Chattem acquisition, Sanofi acquires a number of second-tier OTC brands in Gold Bond, Icy Hot, ACT, Cortizone-10, Selsun Blue and Unisom. However, that status of fielding second-tier brands won’t last long. Sanofi is expected to push its own second-generation antihistamine Allegra through the prescription-to-over-the-counter switch process very soon. Through an agreement with Barr Laboratories, a generic version of Allegra D-12 was to have launched last month, making the timing for an OTC switch paramount.

“The transaction is expected to be accretive to Sanofi-Aventis’ earnings as early as year one,” the company stated in making the announcement. “This acquisition will allow Sanofi-Aventis to optimize and retain the full value of the Allegra switch to an OTC product.”

Another potential switch product includes NasacortAQ. That’s a corticosteroid, however, and GlaxoSmithKline was reported to have considered and abandoned switching its nasal allergy treatment, Flonase, some years ago.