EXHIBIT 99.1
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          Chattem, Inc. Announces Pricing of Convertible Notes Offering


       CHATTANOOGA,   Tenn.--(BUSINESS   WIRE)--Nov.  17,  2006--Chattem,   Inc.
(NASDAQ: CHTT) today announced the pricing of a private offering of $125 million
aggregate  principal amount of Convertible  Senior Notes due 2013 (the "Notes").
This amount is an increase  over the $100  million  offering  amount  previously
announced.  The  Notes  are  being  sold in a  private  placement  to  qualified
institutional buyers. The issuance of Notes is expected to close on November 22,
2006.

       The Notes will pay  interest  semiannually  at a rate of two  percent per
annum.  The Notes will be convertible at an initial  conversion  rate of 16.9729
shares  per  $1,000  principal  amount  of Notes,  which is equal to an  initial
conversion price of approximately $58.92 per share. This represents a 26 percent
conversion  premium based on the last reported sale price of $46.76 per share on
the NASDAQ  Global Market on November 16, 2006.  In certain  circumstances,  the
Notes will be convertible into cash up to the principal amount,  with any excess
conversion value being  convertible into cash, shares of Chattem common stock or
a combination of cash and common stock, at Chattem's option.

       Chattem  estimates  that the net proceeds from the offering of Notes will
be  approximately  $121 million after  deducting the fees of the placement agent
and  estimated  offering  expenses.  Chattem  intends to use  approximately  $32
million of the offering proceeds to fund a convertible note hedge transaction to
be entered into with an affiliate of the placement agent for the offering, which
transaction is intended to offset Chattem's  exposure to potential dilution upon
conversion  of the  Notes.  Chattem  will also  enter  into a  separate  warrant
transaction  with an affiliate of the  placement  agent that,  together with the
convertible  note  hedge  transaction,  will have the effect of  increasing  the
effective conversion price to Chattem to approximately  $74.82, which represents
a 60  percent  conversion  premium.  Chattem  plans on using  proceeds  from the
warrant  transaction  (estimated at approximately  $19 million) and a portion of
the net proceeds from the Note offering to repay all amounts  outstanding  under
its existing revolving credit facility (approximately $38 million as of November
16, 2006).

       If Chattem  consummates the acquisition of the U.S. rights to five brands
from  Johnson & Johnson and the  consumer  healthcare  business of Pfizer  Inc.,
Chattem plans on using the remaining proceeds derived from the sale of the Notes
to finance in part such acquisition.  Pending the closing of the acquisition, or
if the acquisition does not close,  Chattem will use the net proceeds  remaining
after  the cost of  funding  the  convertible  note  hedge  transaction  and the
repayment  of  obligations  under its  existing  revolving  credit  facility for
working capital and other general corporate purposes.

       This notice does not constitute an offer to sell or the  solicitation  of
an offer to buy  securities.  Any offers of the securities  will be made only by
means of a private  placement  memorandum.  The Notes and the  shares of Chattem
common stock issuable upon conversion have not been, and will not be, registered
under the Securities Act or the securities  laws of any other  jurisdiction  and
may not be  offered  or sold in the  United  States  absent  registration  or an
applicable exemption from registration requirements.

       Certain  statements and information  included in this release  constitute
"forward-looking   statements"   within  the  meaning  of  the  Federal  Private
Securities  Litigation  Reform  Act of  1995.  Such  forward-looking  statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual  results,  performance  or  achievements  of Chattem to be materially
different  from any future  results,  performance or  achievements  expressed or
implied in such forward-looking  statements.  Important factors that could cause
actual  results to differ  materially  from the results  expressed or implied in
such forward looking statements include the risk that the notes offering, or the
acquisition  of the U.S.  rights to five brands  from  Johnson & Johnson and the
consumer  healthcare  business of Pfizer Inc., are not timely consummated or are
not consummated at all. Additional discussion of factors that could cause actual
results  to differ  materially  from  management's  projections,  estimates  and
expectations is contained in Chattem's Annual Report on Form 10-K for the fiscal
year ended November 30, 2005 and the other documents  Chattem files with the SEC
from time to time.  Chattem  undertakes  no duty to update  its  forward-looking
statements,  including  any such  statements  regarding  the  expected  economic
benefits resulting from the acquisition.


       CONTACT: Chattem Inc., Chattanooga
                Catherine Baker, Investor Relations, 423-822-3209