Sterling Winthrop

from Wikipedia, the free encyclopedia

Sterling Winthrop, Inc. ( known as Sterling Drug until the late 1980s ) was a pharmaceutical company in the United States that forcibly took over Bayer Co after the First World War and therefore retained the rights to the name until the 1990s Bayer held in the United States and Canada.

history

Founding years

The two pharmacists William Erhard Weiss and Albert H. Diebold founded a company in Wheeling, West Virginia in 1901 with three other partners, initially under the name Neuralgyline Company , whose business purpose was the manufacture and sale of a pain reliever. The three partners were soon paid off and Weiss and Diebold came to the conclusion that further expansion could best be achieved by purchasing product lines. This business policy ran like a red thread through the coming decades, in which around 130 other companies were acquired directly or indirectly and led to an early conglomerate . Danderine Company was the first acquisition in 1906, followed shortly afterwards by the eponymous Sterling Remedy , which sold a means of giving up smoking. In 1912, the California Fig Syrup Company was acquired, which sold a laxative containing sugar . Thompson-Koch specialized in advertising and remained Sterling's in-house marketing agency until the 1980s. Intangible assets were bundled in synthetic patents .

The Bayer coup

In 1917, Neuralgine was no longer the main product and the original company name was difficult to pronounce, so the company was renamed Sterling Products . Because many basic chemicals could no longer be imported due to the war - some of them came from Germany - Winthrop Chemicals , which was supposed to manufacture the preliminary products, was born. When the USA entered the war, the assets of German companies were confiscated - those of Bayer Co, based in Rensselaer , New York on January 10, 1918. In the 19th century, it was common practice for German chemical companies to preserve their know-how, only domestically to produce, but US customs regulations had prompted Bayer to set up a production facility for aspirin and colors in the USA in 1903 . The auction took place on December 12, 1918, from which William Weiss successfully emerged with a bid of $ 5.3 million. He resold the paint division for $ 1.5 million, which was to end up with BASF in 1978.

Sterling was also successful in acquiring the rights to the Bayer trademarks for the British Commonwealth from the British Alien Property Control Board. Sterling thus had strengths in sales in North America and, due to the relative proximity, also in Latin America, but it lacked the technical competence for the smooth operation of the production facilities. Therefore, contractual agreements were made with Bayer Germany in the next few years.

At the end of 1920 there was a compromise for the Latin American market. Sterling obtained the Latin American licenses for aspirin and agreed not to commercialize any other prescription drugs. The acetylsalicylic acid would be supplied by Bayer from Germany, and the profit would be shared between 75% Bayer and 25% Sterling. In 1923 there were further contractual agreements: a) On the one hand, Sterling received permission for North America to manufacture some of the Bayer drugs in Rensselaer by Winthrop Chemicals with the support of Bayer production expertise; in return Bayer received 50% of the Winthrop profits - this was later converted into a 50% ownership share. b) On the other hand, it was confirmed that Sterling held the naming rights to "Bayer" in the USA, Canada, Great Britain, Australia and South Africa, but it was ruled out that Sterling could use this for a variety of other OTC products, namely Bayer drugs being sold under Sterling's name or that Sterling was attacking Bayer patents or trademarks elsewhere in the world. It was also agreed for the Commonwealth that Bayer would take over aspirin production and that the profits would be shared 50:50.

Bayer Germany was integrated into IG Farben in 1925 , and Sterling was able to convince Bayer's legal successor that the cooperation agreements that had been concluded are still valid. The licensing agreement made it possible to introduce the latest pharmaceutical innovations from Germany to the US market. a.

Further expansion

Acquisitions for Sterling were Phillips Milk of Magnesia (1923), an antacid , as well as in the dental field Cook Laboratories (1927) and the Antidolor Company (1928).

From March 1928 to August 1933 was Sterling Products with the drugstore chain United Drug controlled, under the leadership of Louis K. Liggett about 20% of the 60,000 US drug stores, under a joint holding company called Drug Inc. merged. Different strategies of the two companies and differences in dividing the profits led to the dissolution of the construct after 5 years. Sterling had z. B. 1932 had a 30% return on sales while United Drug's retail business was only 5%.

In the 30s there were other company acquisitions: RL Watkins , the Dr. Lyons' toothpowder and Dalatone . The American Ferment Co supplemented the portfolio with papain -products, the Cleveland Chemical Co with stomach agents and Fairchild Brothers and Foster presented Phisoderm and topHisoHex (soap / disinfectant) ago. With the takeover of Sydney Ross from Newark, NJ, which owned several plants in Latin America, a significant step was taken in the direction of internationalization in 1938.

The two founders Weiss and Diebold withdrew from the company's management in December 1941 after the agreements made with IG Farben in the 1920s when the USA entered the war were interpreted as a violation of antitrust regulations. At the helm was Edward S. Hills, an attorney who had represented the company in trademark negotiations, and James Hill, the former finance director. Sterling changed its name to Sterling Drug, Inc. on October 15, 1942 , to avoid confusion with other companies that prevented it from performing licensed duties in some states.

Also in 1942 the Salvo Chemical Corporation was acquired, whose main product is vanillin , which was obtained from wood residues, especially lignin . Salvo also developed the Zimpro process (Zimmerman process named after the inventor), a process for wastewater treatment using wet oxidation under high pressure and temperature, which enabled entry into environmental process engineering .

The Frederick Stearns Company was taken over in 1944. It was founded in 1855 by a pharmacist and produced the Nyal product line (acquisition of the New York and London Drug Company in 1904), which was particularly successful in Australia. Mark Hiebert, MD, the medical director of Frederick Stearns, became Sterling's general manager in 1955 and assumed his position as chairman of the board after the death of James Hill in 1962.

To supplement production in Rensselaer, the Hilton-Davis Company was purchased in 1945 and the McKayDavis Chemical Company in 1947 , mainly to meet the increasing demand for salicylic acid for the production of Bayer aspirin.

post war period

In 1966, Sterling Drug took over Lehn & Fink, the manufacturer of the disinfectant Lysol . After the Aspirin patent expired in 1917, Lehn & Fink was one of the driving forces behind the United Drug Co., which attacked the Aspirin brand , which ultimately led to the declaration of public domain in the USA.

In the course of time Bayer tried several times to get its naming rights including the Bayer cross logo back from Stirling in various markets. In the US (and Canada, where trademark protection remained), Sterling successfully marketed aspirin as an over-the-counter over-the-counter (OTC) drug, whereas in the UK, Australia and a few other markets it was a prescription drug. Sales also fell in these countries due to competition from other pain relievers, and most of the drug disappeared there in the 1960s. Eventually, Sterling gave in, and in 1970 returned the intangible assets for $ 2.8 million - excluding its established US, Canada, Jamaica and Trinidad markets. Furthermore, with the approval of Sterling in 1986, Bayer's US holding subsidiary was renamed from Rhinechem Corporation to Bayer USA Inc.

Sterling operated approximately 70 factories in approximately 40 countries and had sales infrastructure in over 130 countries during the last two decades of its existence.

Final phase

In 1988, Eastman Kodak, the white knight, took over the company for $ 5.1 billion to fend off a hostile takeover bid by Hoffmann-La Roche . In June 1994, Sanofi acquired the prescription drug business for $ 1.68 billion, and in August the OTC non-prescription drug segment (including Bayer Aspirin) was sold to SmithKline Beecham for $ 2.925 billion . Bayer had taken part in the bidding competition, but was defeated. Shortly thereafter, however, an agreement was reached with SmithKline Beecham to take over the North American OTC business for US $ 1 billion, whereby the naming rights including the Bayer cross logo were returned to Bayer AG in the USA and Canada. The remaining activities of Sterling-Winthrop (e.g. Lehn & Fink) were soon sold by the mother company Kodak, so that Sterling was dissolved at the end of 1994.

Individual evidence

  1. ↑ a b c d e f g h Joseph C. Collins and John R. Gwilt: The Life Cycle of Sterling Drug, Inc. In: Bulletin for the History of Chemistry, American Chemical Society . 2000, ISSN  1053-4385 ( illinois.edu [PDF]).
  2. ↑ Leander Ricard: A History of the Dye Producing Industry in Rensselaer . In: Textile Chemist & Colorist . tape 26 , no. 8 , 1994, ISSN  0040-490X ( colorantshistory.org ).
  3. ^ Clare M. Reckert: New Bid Favored by Lehn & Fink . In: New York Times . March 26, 1966, ISSN  1553-8095 ( nytimes.com ).
  4. ^ Janice Rae McTavish: Pain and Profits: The History of the Headache and Its Remedies in America . Rutgers University Press, New Brunswick, NJ / London 2004, ISBN 0-8135-3440-2 , pp. 140–141 ( text in Google Book search).
  5. ↑ Leslie Wayne: Kodak Agrees to Buy Sterling for $ 5.1 Billion . In: New York Times . January 23, 1988, ISSN  1553-8095 ( nytimes.com ).
  6. ^ NN: Kodak to Sell Drug Unit for $ 1.68 Billion . In: Los Angeles Times . June 24, 1994, ISSN  0458-3035 ( latimes.com ).
  7. ^ NN: Kodak to Sell Remaining Sterling Winthrop Unit: Drugs: SmithKline Beecham will buy the consumer health products business for $ 2,925 billion. In: Los Angeles Times . August 30, 1994, ISSN  0458-3035 ( latimes.com ).
  8. ^ Milt Freudenheim: Germans to Regain Bayer Aspirin . In: New York Times . September 13, 1994, ISSN  1553-8095 ( nytimes.com ).