Which Countries Excel in Creating New Drugs? It’s Complicated

9/2/14

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mirror the ascendance of the biotechnology industry, whose drugs began to (mostly) flow out of U.S. in the late 1980s and early 1990s?

3) With the advent of the biotechnology industry in the 1980s, why is there such a large decrease in the number of NCE’s during the 1990s when biotechnology products really began to enter the marketplace in large numbers? Has all the low hanging fruit been picked?

Let’s get back to pharmaceutical mergers and acquisitions. Industry consolidation has been going on for decades. As a result, there are larger but fewer fish in the pond than there used to be, and the small ones all have a worried look. Over the past 50 years or so many pharma firms have divided and recombined, imitating the biological processes that many of them study. While I haven’t done an exhaustive survey, the historic data clearly show that biopharma companies have been purchased by firms located in other countries as well as their own. Here are some historical examples (because you can’t tell the players without a scorecard), which I’ve simplified in a number of cases due to corporate complexities:

In-Country Pharma Acquisitions

American Home Products acquired A.H. Robins in 1989. AHP then bought American Cyanamid in 1994, which also gave it an interest in biotech Immunex. It also invested in Genetics Institute in 1992, and bought that company in 1996. AHP later changed its name to Wyeth, and was acquired by Pfizer in 2009. [U.S.]

Parke-Davis (once the worlds largest pharmaceutical company) was acquired by Warner-Lambert in 1970. Warner-Lambert, in turn, was acquired by Pfizer in 2000. [U.S.]

Swiss drug companies Ciba-Geigy and Sandoz merged in 1996 to form Novartis. [Switzerland]

British pharmaceutical company Beecham Laboratories merged with SmithKline Beckman (which had been created by the merger of Smith Kline French and Beckman), then Smith Kline Beecham merged with Glaxo Wellcome (which itself was created by the merger of Glaxo with Burroughs Wellcome) to become GlaxoSmithKline. [Great Britain]

Outside-Country Pharma Acquisitions

Wyeth (founded in Philadelphia) merged with Ayerst, McKenna, and Harrison Ltd of Canada in 1943 to form Wyeth Ayerst, whose name was later shortened to Wyeth. [Canada to U.S.]

Upjohn merged with Pharmacia AB of Sweden in 1995 to form Pharmacia and Upjohn. Monsanto acquired G.D. Searle in 1985, and in 2000 its combined pharmaceutical division was merged into Pharmacia and Upjohn, creating Pharmacia. [U.S. to Sweden times 3] Pfizer then acquired Pharmacia in 2003. [Sweden back to the U.S.]

Schering AG was founded in Germany. Its U.S. assets were seized during WW II and were placed under government administration until 1952, when they were sold off. [Germany to the U.S.] The new U.S. based Schering Corporation merged with Plough in 1971, and then Schering-Plough was acquired by Merck in a reverse merger in 2009. [U.S.]

Sterling Drug was established in West Virginia in 1901, and acquired the U.S. assets (under the Alien Property Custodian Act) of the German company Bayer AG at the end of WW I. [Germany to the U.S.] Sterling Drug (aka Sterling Winthrop) was acquired by Eastman Kodak in 1988, but in 1993 Kodak turned around and sold the company to what is now Sanofi (headquartered in France). [U.S. to France]

ICI (Imperial Chemical Industries), a British conglomerate, spun off its pharmaceutical business in 1993 as a new company called Zeneca. Zeneca merged with Swedish based Astra AB to form AstraZeneca in 1999. [Sweden to Great Britain]

Boots Pharmaceuticals (a division of the British conglomerate Boots) was acquired by the German conglomerate BASF in 1994. [Great Britain to Germany]

Takeda purchased Millennium Pharmaceuticals in 2008 [U.S. to Japan] and Nycomed in 2011. [Switzerland to Japan]

Yamanouchi Pharmaceutical and Fujisawa Pharmaceutical merged in 2005 to form Astellas Pharma, which then bought New York-based OSI Pharmaceuticals in 2010. [U.S. to Japan]

Sanofi bought Genzyme in 2011. [U.S. to France]

Connaught Laboratories, founded out of the University of Toronto and headquartered in Canada, was bought out by the Institut Merieux (a French holding company) in 1989. [Canada to France]

Other pharmaceutical maneuvers (beyond mergers and acquisitions) can also make it difficult to discern exactly … Next Page »

Stewart Lyman is Owner and Manager of Lyman BioPharma Consulting LLC in Seattle. He provides strategic advice to clients on their research programs, collaboration management issues, as well as preclinical data reviews. Follow @

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  • Yali Friedman

    I think that tracking patents covering approved drugs can yield greater granularity and precision, without the need for rigorous company history tracking. Because companies must disclose patents covering drugs in the US (the world’s largest drug market), and because patents must list all inventors, and because inventor locations are listed on patents, you can track inventor locations through drug patents.

    In fact, published such studies in 2009 (http://www.nature.com/nrd/journal/v9/n11/full/nrd3298.html) and in 2014 (http://www.nature.com/nbt/journal/v32/n6/full/nbt.2933.html), and my results are similar to yours.

  • Liam Gordon

    Is it possible that the drop in NCEs (Q3) is real e.g. approval of biotech drugs under BLA rules, aren’t being counted?