Sanofi's ( SNY ) US
consumer healthcare division, Chattem, Inc., recently announced
that it has acquired worldwide rights of an over-the-counter
antacid Rolaids from McNeil Consumer Healthcare, a subsidiary of
Johnson and Johnson ( JNJ
Rolaids, initially launched in 1954, is used to relieve
heartburn and acid indigestion. Sanofi plans to re-launch the drug
and make it available to the customers within a year of launch.
Sanofi is one of the major players in the consumer health care
market in the US. The company provides a strong platform for the
potential conversion of prescription medicines to OTC status in the
US. We are positive on the addition of Rolaids to Sanofi's consumer
healthcare portfolio, which includes products such as Allegra
over-the-counter, Icy Hot, Gold Bond, Cortizone-10, Selsun Blue,
ACT and Unisom.
We note that Sanofi's biggest challenge is the generic threat
that is being faced by several of its products. The company lost
approximately €2.2 billion in sales in 2011 due to
Sanofi is looking to combat the generic threat through inorganic
growth. Moreover, Sanofi is introducing new products to counter the
loss of revenues due to genericization of key drugs. We believe
that the acquisition of Rolaids rights is a step in that
We currently have a Neutral recommendation on Sanofi. The stock
carries a Zacks #2 Rank (Buy) in the short run.
Besides Sanofi, other stocks in the large-cap pharma sector that
appear to be equally attractive include stocks like
Novo-Nordisk ( NVO )
and Novartis ( NVS ).
Both these companies carry a Zacks #2 Rank (Buy).JOHNSON & JOHNS (JNJ): Free Stock Analysis
ReportNOVO-NORDISK AS (NVO): Free Stock Analysis
ReportNOVARTIS AG-ADR (NVS): Free Stock Analysis
ReportSANOFI-AVENTIS (SNY): Free Stock Analysis
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