SmithKline Beecham poised to take top drugs slot
15 Jan 2000
It's just like the old days. As PEwent to press, SmithKline Beecham and American Home Products were deep in discussion over a proposed merger that would create the world's largest drugs company.
If the merger is successful, it will create a company with a market value of some $80billion. The combined company will span drugs discovered by high-tech genetic techniques, to over-the-counter products such as Advil.
SKB is to be the 'dominant partner' in the merger, and the new company is therefore likely to be headed by the Anglo-American firm's energetic chief executive, Jan Leschley. The head of New Jersey-based AHP, Jack Stafford, has been ill recently. Aformer international tennis player for his native Denmark, Leschley's latest move would volley his company ahead of its traditional rivals, Merck of the US and Britain's Glaxo Wellcome, in the pharmaceutical league.
AHP's biggest seller is an osteoporosis treatment, Premarin; it also makes an arthritis treatment, Naprelan, and over-the-counter brands such as Robitussin cough mixture. It also owns Genetics Institute, which identifies proteins derived from the human genome; this fits in with a major thrust of SKB's research, identifying drug targets based on genes. SKB's products include the antibiotic Augmentin, schizophrenia drug Seroxat, and consumer brands like Horlicks and Ribena.
The merger follows some years after the last major burst of acquisitions fever in the pharmaceutical industry. In 1995, a two-year flurry of activity began which saw, among other deals, Glaxo's takeover of Wellcome.
