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Monday, 17 January, 2000, 11:04 GMT
Profile: Glaxo Wellcome

Glaxo Wellcome announced its merger with SmithKline Beecham in January 2000.

The deal would form the world's largest pharmaceutical company, but Glaxo already knows how to play the merger game.

The company was created in March 1995, when Glaxo took over Wellcome for 9bn, in what was then the biggest merger in UK corporate history.

At that time it was the darling of the corporate world, enjoying a major success with Zantac, a treatment for ulcers that was the best-selling drug in the world.
Glaxo Wellcome
Annual turnover 8bn
Spends 1bn a year on R&D
Employs 59,000 worldwide (13,000 in UK)

Since then, Glaxo, has struggled to find a replacement for its blockbuster, whose patent has expired in the US, and for Zovirax, Wellcome's anti-herpes drug which has already become available without a prescription.

Glaxo had high hopes for its anti-flu drug, Relenza, and was furious when the UK's National Institute for Clinical Excellence told doctors not to routinely prescribe the drug on the National Health Service.

Glaxo's chief executive, Sir Richard Sykes, led a campaign by the drug industry against the decision, threatening to reduce its research and development spending in Britain.

In 1999 Glaxo's shares suffered, underperforming the market by 27% as the company missed its ambitious profit target.

A long road from Wellington

Glaxo originates in New Zealand, where it was founded in 1873 by Joseph Nathan as a general trading company. The firm produced its first medical product, a vitamin D preparation, in 1924.

But it was only in the 1980s, with the development of Zantac, that it became a major force in the pharmaceutical industry.

The Burroughs Wellcome & Company, meanwhile, was founded in 1880 in London by two pharmacists from the United States, Henry Wellcome and Silas Burroughs.

The Wellcome foundation, now Wellcome Trust, was founded as early as 1924, and became the firm's majority stakeholder 12 years later.

The company pioneered medical research, as well as developing well-known home remedies like Calpol.

It also played a major role in developing Retrovir, a drug that limits the spread of Aids, although it was criticised by some gay activists for charging too much for the medicines.

In 1988, Nobel prize for medicine was awarded jointly to Dr Gertrude Elion and Dr George Hitchings, two Wellcome researchers.

World leader

Nowadays, Glaxo Wellcome is among the world's ten largest drugs companies and employs 59,000 people worldwide, including 13,400 in the UK.

The firm owns 76 operating companies and runs more than 50 manufacturing sites worldwide.

During 1998, pre-tax profits stood at 2.67bn ($4.37bn) on a turnover of 7.98bn ($13.1.bn).

Glaxo Wellcome describes itself less as a maker of drugs, but as "one of the world's leading research-based pharmaceutical companies" with an annual research and development budget of 1.2bn.

Seven of the company's products are listed among the world's top 50 best-selling drugs.

Coldsore treatment Zovirax, anti-asthma drug Ventolin, migraine drug Imigran and Aids treatments Retrovir and Epivir are among its leading products.

In the UK, the company has research sites at Ware and Stevenage in Hertfordshire, Greenford in London and Dartford and Beckenham in Kent.

Manufacturing plants are based at Ulverston in Cumbria, Barnard Castle in County Durham, Speke on Merseyside and Montrose in north-east Scotland.

It also has major worldwide research centres in North Carolina in the United States and in Japan, and further production facilities in the US, Europe and the Far East.

Sykes progress

The modern company is largely the creation of Sir Richard Sykes, a research scientist who also led the development of many of Glaxo's most successful drugs.

He was born in 1942, a carpenter's son from Yorkshire.

He put himself through night school, and went on to become a scientist, earning two doctorates - one in science at London University and another in microbial biochemistry at Bristol University.

He first joined Glaxo in 1972. Five years later he worked for US rival Squibb, before returning to Glaxo in 1986.

He is the company's chief executive since 1993.

When he turns 60 in 2002, he will leave the new merged Glaxo SmithKline to run Imperial College London.

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14 Jan 00 | Business
Drug giants back in merger talks
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