Coca-Cola, Sanofi Form Pilot Venture to Test ‘Beauty Drink’

Coca-Cola Co. (KO) and Sanofi (SAN) set up a joint venture to sell health drinks at French pharmacies, a pilot project to test demand for beverages with beauty claims.

The beverages, called Beautific and sold under the brand name Oenobiol, will be available within months, the two companies said in separate statements. Coca-Cola, the world’s largest soft-drink maker, will handle formulation and Sanofi will oversee distribution, according to the French drugmaker.

Sanofi is looking to diversify to reduce its reliance on prescription drugs while Coca-Cola faces pressure to offer healthier beverages amid rising obesity rates. The first four drinks will help with hair, weight loss, sun exposure and general vitality, according to a Sanofi presentation obtained by Bloomberg. The product, designed to appeal to active urban women aged 25 to 45, will cost between 2 euros ($2.60) and 3 euros a bottle, the document shows.

“The blockbuster model is broken, and drugmakers have been turning to consumer health-care,” Pierre Corby, an analyst at Aurel BGC in Paris, said in a phone interview.

Sanofi Chief Executive Officer Chris Viehbacher has been reshaping the French company since he took over almost four years ago. The 52-year-old CEO has been expanding in animal health as well as consumer products as its top medicines, including the blood-thinner Plavix, face generic competition.

Coca-Cola and Sanofi will own 50 percent of the venture, Sanofi said in an e-mailed statement.

Gold Bond Powder

Sanofi’s consumer health-care business has been growing through purchases, such as the 2010 acquisition of Chattem Inc., the U.S. maker of Gold Bond medicated powder. The company acquired Laboratoire Oenobiol, a French maker of nutritional beauty supplements, three years ago. Sales of consumer goods, which Sanofi touts as one of its growth platforms, rose 23 percent to 2.7 billion euros ($3.54 billion) last year.

At the same time, Viehbacher has been cutting internal research, ending the least promising projects and lowering headcount. In France, a new plan to eliminate about 900 jobs by 2015 has drawn criticism from politicians and unions.

Today’s announcement is an example of how Sanofi’s identity is changing under Viehbacher, unions said.

“They presented this project to our sales forces as if it were the height of innovation,” Thierry Bodin, a union representative, said in a telephone interview. “We are concerned about trying to get new medicines to patients, and Sanofi’s management is only worried about making money, in this case with beauty products.”

To contact the reporter on this story: Albertina Torsoli in Paris at atorsoli@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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