Rolaids next on Chattanooga-based Chattem's plate

Rolaids next on Chattanooga-based Chattem's plate

January 9th, 2013 by Mike Pare in Business Around the Region

Chattem

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Rolaids, the well-known antacid whose beginnings are linked with a Chattanooga chemist, is returning to the city where it will receive new life after exiting store shelves following two 2010 recalls.

Chattanooga-based consumer products maker Chattem Inc. has bought the worldwide rights for Rolaids from McNeil Consumer Healthcare, a subsidiary of giant Johnson & Johnson.

Zan Guerry, Chattem's chief executive, said in a statement that the company is "primed to leverage the Rolaids market opportunity to drive incremental growth and take the brand to a new level."

The main ingredient in Rolaids was developed by Dr. Irvine W. Grote, who was a University of Tennessee at Chattanooga chemistry professor for more than three decades. Grote also worked for Parke, Davis & Co. and served on Chattem's board, and his name appeared on 75 patents before his 1972 death.

Chattem, a division of French pharmaceutical giant Sanofi, plans to re-launch Rolaids and make it available to retailers within a year after it was pulled from shelves in the wake of the pair of recalls in 2010.

One recall followed an investigation of consumer reports of an unusual moldy, musty or mildew-like odor that, in a small number of cases, was associated with temporary and non-serious gastrointestinal events. Another recall came after reports that metal and wood particles were found.

Chattanooga's Zan Guerry

Photo by Matt Fields-Johnson

McNeil said then that it was changing some of its manufacturing facilities where the product was made.

Ed Silverman, editor of the health care publication Phamalot, said Chattem is a scrappy company that will try to carve out a niche for Rolaids amid tough competition that has emerged over the years.

"It has a track record of being an aggressive marketer," he said. "They can make a product visible and generate demand."

Silverman said Chattem should be able to overcome manufacturing problems that have beset J&J.

Robert Long, Chattem's chief financial officer, said the Chattanooga company will work through the supply chain and on marketing plans for Rolaids.

Long said plans aren't to make Rolaids in Chattanooga in the immediate term. But, he said, there could be some packaging or other opportunities the company may explore and bolster employment.

"We're excited about the brand and what we can do with it," he said.

Long declined to give the purchase price for Rolaids or its last annual sales figure.

But, he said, Rolaids would be among Chattem's top six or seven brands, which each range from $40 million to $100 million in revenue annually, not including the allergy medicine Allegra.

Over $300 million of Allegra was shipped in the first 10 months since it was shifted from a prescription to an over-the-counter medicine, Chattem said last year.

Anne Whitaker, president of North America Pharmaceuticals of Chattem parent Sanofi, said the acquisition of Rolaids is consistent with the company's long-term strategy.

"Chattem has a proven track record of successful acquisitions," she said in a statement.