Chattem sends Allegra across U.S.

Chattem sends Allegra across U.S.

March 6th, 2011 by Mike Pare in Business Around the Region

Chattanooga-based Chattem has carried out the biggest product launch in its 130-year history and one of the largest ever in the city.

Staff photo by Dan Henry/Chattanooga Times Free Press - 3/03/11. Robert Long, CFO of Chattem Inc., speaks about the product while standing in front of pallets of Allegra at the company's Chattanooga warehouse Thursday. Allegra, once a prescription only drug, has recently been approved to be sold over the counter at local drugstores.

"It's an exciting time for us," Chattem President Bob Bosworth said about the massive rollout of allergy drug Allegra last week to more than 25,000 stores nationwide.

First-day shipments to stores hit about $100 million, according to the company.

Bosworth said Allegra, shifting from a prescription drug to an over-the-counter medicine, is targeting the No. 1 slot in its segment by lapping competitors Claritin and Zyrtec.

Zan Guerry, Chattem's chief executive, said the company is aiming for annual Allegra sales of $250 million to $350 million.

Before Allegra, Chattem's sales for all its other products were more than $400 million.

In January, Chattem and its parent company, French pharmaceutical titan Sanofi-Aventis, announced that the U.S. Food and Drug Administration approved the Allegra family of allergy medication products for over-the-counter sales.

Chattem, Sanofi's consumer health care division, was acquired by the Paris-based company for $1.9 billion in cash in a deal that closed in 2010.

Bosworth said locally based Covenant Transportation Group marshaled about 660 trucks to transport the medicine to retailers.

"It required an extraordinary effort between key people at Covenant and our internal operational people," he said.

ALLEGRA PRODUCTS

• Allegra 24-Hour

• Allegra 12-Hour

• Children's Allegra

• Children's Allegra 12-Hour Oral Suspension

• Children's Allegra 12-Hour Tablets

• Allegra-D 24-Hour

• Allegra-D 12-Hour

Source: Chattem

Robert Long, Chattem's chief financial officer, said retailers had been preparing for Allegra's arrival late last week. Stores were providing promotional support such as displays and banners announcing the product was coming soon.

Bosworth said the effort by Chattem was significantly bigger than it ever has undertaking for a product.

"The depth of promotional activity is much greater," he said, adding it worked closely with parent Sanofi.

The Chattem official said while the product was made at Sanofi plants in Kansas City and St. Louis, over a third of labeling and packaging was done in Chattanooga. Chattem used parts of all three its Chattanooga plants and brought on temporary workers to help, officials said.

Moving forward, Bosworth said the company and its parent are evaluating future manufacturing and packaging locations for Allegra.

He said while Chattem's base business, such as its Icy Hot and Gold Bond brands, are doing well, there's talk of the Chattanooga company handling other Sanofi products that move to the over-the-counter realm.

"We might do another switch at a point in time," Bosworth said.

Also, Chattem could make acquisitions as it has done in the past, he said.