Wyeth was a US pharmaceutical and consumer healthcare company acquired by Pfizer in 2009. Seven years earlier, what was then American Home Products adopted the new name of Wyeth as if to draw the line under a series of almost-mergers in the late 1990s. The group had announced plans to merge with different partners on three separate occasions over a two year period, only to see the deal collapse, either because of cultural differences or because the partner-to-be was whisked away from under AHP's nose by the aggressively acquisitive Pfizer. As a result, Wyeth took the decision to stay free and single, refocusing its portfolio to concentrate on pharmaceuticals, including hard-to-copy biologic Enbrel and the vaccine Prevnar, as well as OTC products such as Advil and vitamin supplement Centrum, and a substantial animal health division. Eventually, however, that same aggressive suitor came knocking on Wyeth's door. In January 2009, Pfizer announced plans to acquire Wyeth for around $68bn in cash, stock and debt. The deal completed in October of that year. Wyeth's operating units were absorbed into their counterparts at Pfizer.
John Wyeth and brother Frank opened their small drugstore in Philadelphia in 1862. The shop specialised in tonics and elixirs, but the brothers were unusual in taking steps to create these drugs themselves in their own laboratory, instead of ordering from manufacturers. As the laboratory expanded, it came to dominate the business, and John Wyeth & Brother Inc began to export its products to the UK and Canada in 1870. In 1877, Wyeth developed the "compressed tablet", effectively the first modern pill, to replace the standard form of powders. The brothers licensed rights to this process and to the rotary tablet presser they had devised to other manufacturers, and the business expanded rapidly. In 1907, John Wyeth died, and control passed to his son Stuart. In 1929, Stuart also died, leaving the business to Harvard University, where he had been educated.
American Home Products was founded in 1926, formed out of the merger of a number of regional US companies making medicinal remedies and tonics, including liniment St Jacob's Oil and foot powder Taz. The group grew rapidly in size during the later years of that decade, buying up the many small businesses which failed under the force of the Depression. In 1931, American Home Products also agreed a deal to buy John Wyeth & Brother from Harvard. Other acquisitions included Petrolgar Laboratories (1931), Reichel Laboratories (1940) and SMA Corporation (1943), all of which were amalgamated in 1943 to form Wyeth Laboratories.
Also that year, the group acquired pharmaceutical researchers Ayerst Laboratories, originally founded in Canada in 1925. In additional to cod-liver oil and vitamins, this business had developed the first estrogen-replacement tablet, Premarin, manufactured from pregnant horse's urine. Experimentation on female fertility hormones also led, several years later in the 1960s, to the introduction of the group's first oral contraceptive, Ovral. In the mean time the group continued to shop voraciously for other businesses. In 1945, AHP acquired Fort Dodge Animal Health, a company making anti-cholera treatments for pigs; also the food businesses Chef Boyardee, Jiffy Pop and Pam cooking sprays, and Ecko cutlery.
The group mounted another acquisition spree in the 1980s, buying medical devices company Sherwood Medical in 1982, the animal health divisions of Bristol-Myers Squibb's and Parke-Davis in 1987 and AH Robins in 1989. The company also ended up with its first blockbuster brand, following the introduction in 1984 of Advil, an OTC version of the analgesic ibuprofen, which became the biggest-selling painkiller in the US. But AHP was also now widely diversified, with substantial foods and household products divisions. Newly appointed CEO Jack Stafford began consolidating the group to concentrate more closely on healthcare. Among his first initiatives was the merger in 1987 of Wyeth and Ayerst to form Wyeth-Ayerst Laboratories.
In 1993, AHP took a large stake in biotech specialist Immunex, then the following year mounted a $10bn hostile bid for American Cyanamid, which contained a substantial crop protection division as well as other pharmaceuticals research laboratories. However a price squeeze on herbicides sharply reduced Cynamid's earnings, and the entire agricultural division was sold off at a loss (to BASF) in 1999. The group also began a major overhaul of its portfolio in the mid-1990s, disposing of all of the food businesses, as well as medical device division Sherwood-Davis and Storz Instrument for around $2bn. Instead the group focused on pharmaceutical and health products, and acquired vitamin and nutritional supplement company Solgar for $425m.
As consolidation fever hit the industry late in the decade, AHP began merger talks with possible partners. In late 1997 it said it would merge with SmithKline Beecham, but the deal was called off in early 1998. A few months later it announced an agreed $35bn deal with Monsanto, but again talks collapsed for unspecified reasons. In both cases, insiders pointed to arguments over who would run the enlarged company. Still on the merger trail, the group announced in 1999 that it would join forces with Warner-Lambert. Nervous of a third time unlucky, AHP negotiated a crushing penalty clause if the merger should not be completed. However even this deal turned sour when aggressive rival Pfizer gatecrashed the party, offering a staggering $10bn more for Warner. The battle for control raged through the winter of 1999/2000. At one stage, Warner-Lambert even tried to engineer a three-way merger between themselves, AHP and Procter & Gamble. But none of these ploys worked, and AHP was left partnerless yet again - although the company was able to console itself with the $1.7bn deal termination penalty fee.
In the 1990s, the group was involved in a series of drug-related lawsuits, which have put increased pressure on its R&D pipeline. It was forced to withdraw painkiller Duract in 1998 as well as diet drugs, Redux and Pondimin, after claims they caused heart problems in patients. The company also faced lawsuits over its Norplant contraceptive implants. Between 1999 and 2004, Wyeth set aside a total of almost $20bn to cover potential costs and damages.
In 2001 its biopharmaceutical part-subsidiary Immunex, with whom Wyeth developed Enbrel, agreed to be acquired by rival Amgen in a massive $16bn merger. Wyeth ended up with a $2.6bn profit on the sale of its 40% shareholding. In 2003 Wyeth received regulatory approval for nasal spray flu vaccine FluMist, for which it had agreed to handle marketing on behalf of developer MedImmune. But initial sales were disappointing and Wyeth pulled out of the alliance in 2004.
Bernard Poussot was appointed as CEO of Wyeth in January 2008, and took over the role of chairman later the same year following the retirement of Robert Essner. He left the company following the Pfizer acquisition.
Wyeth's final full year revenues for 2008 rose 2% to $22.8bn. Net income declined 4% to $4.4bn. The US accounted for around 47% of revenues. The group's second-largest territory was the UK, with sales of $1.1bn.
Last full revision 16th January 2018
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