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Wellcome
In 1880, Burroughs Wellcome & Company was
founded in London by American pharmacists In 1880, Burroughs Wellcome & Company was founded in London by American pharmacists Henrry Wellcome and Silas Burroughs. The Wellcome Tropical Research Laboratories opened in 1902. In 1959 the Wellcome Company bought Cooper, McDougall & Robertson Inc. to become more active in animal health. The Wellcome Company production centre was moved from New York to North California in 1970 and the following year another research centre was built.
Glaxo
Glaxo was founded in Bunnythorpe, New Zealand in
1904. Originally Glaxo was a baby food manufacturer processing local milk into a baby food by the same name: the product was sold in the 1930s under the slogan "Glaxo builds bonny babies". Still visible on the main street of Bunnythorpe is a derelict dairy factory (factory for drying and processing cows' milk into powder) with the original Glaxo logo clearly visible, but nothing to indicate that this was the start of a major multinational company.
opened new units in London in 1935. Glaxo Laboratories bought two companies, Joseph Nathan and Allen &Hanburys , in 1947 and 1958 respectively. After the Company bought Meyer Laboratories in 1978, it started to play an important role in the US market.
GLAXO WELLCOME
The company was created in March 1995, when Glaxo took over Wellcome for
pound 9bn, which was then the biggest merger in UK corporate history.
At that time it was the best company of the corporate world, enjoying a major
success with Zantac, a treatment for ulcers that was the best-selling drug in the world. 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.
SmithKline Beecham
SmithKline Beecham In 1843, Thomas
Beecham launced his Beecham s laxative in England giving birth to the beecham Group. Beechamsopened its factory in St.Helens, Lancashire, England for rapid production of medicines in 1859. By 1960 s it was extensively involved in the pharmaceuticals.
GlaxoSmithKline
GlaxoSmithKline plc (GSK) is a global
Pharmaceutical, biologics, vaccines and consumer healthcare company headquartered in London, United Kingdom. It s the world s third largest pharmaceutical company measured by revenues. It has portfolio of products for major disease areas including asthma, cancer, virus control, infections, mental health, diabetes and digestive conditions.
MERGER DETAILS
The merger was worth 112 million pounds. GSK PLC, began trading on the New York and London Stock Exchanges
following the completion of the merger process. The merger was approved by the European Commission in May 2000, and the US Federal Trade Commission.
emetic Kytril and its anti-viral products Famvir and Vectavir/Denavir. Novartis completed its $1.6 billion acquisition of Famvir and Vectavir/Denavir.
agreed to pay Roche $400 million for the US and Canadian rights to Coreg.
4. INCREASE IN LABOUR FORCE. It has more than 40,000 sales and marketing personnel throughout the world, including roughly 8,000 representatives. Overall, the combined company has 100,000 employees. 5. COST SAVINGS. The company combined cost savings of [pound]1.6 billion. By 2003, the company increased its manufacturing savings to [pound]570 million per year. 6. RESULTS IN SHARE TRADING. GlaxoSmithKline began trading on the New York and London Stock Exchanges. On the company's first day of trading on the New York Stock Exchange, its share price closed at $55.38, slightly up from Glaxo's previous closing as a standalone company of $54.88, but down from SmithKline Beecham's previous closing price of $61.88. On a comparative basis, GlaxoSmithKline's stock price (at the close of December 27, 2000, its first day of trading), was better than Novartis ($44) and AstraZeneca ($51.50), but well below Aventis ($81.69).
REASONS FOR MEGRGER 1. TO REDUCE THE RESEARCH AND DEVELOPMENT PIPELINE. As GSK, wants to lead and desires to be the first company who find out the cure of new diseases so they want to reduce the number of products in the pipeline of R&D. Hence, both companies were producing similar drugs, they decided to integrate their product line which requires time and efforts. Thus the time for working on new diseases will be reduces by working together on lesser products. 2. TO REDUCE THE RESEARCH AND DEVELOPMENT COST. The basic ideology behind that was to improve quality of human life for enabling people to do more, feel better, live longer. The were the world's leading producers of prescription medicine, vaccine and consumer health care products and they dedicated their selves for delivering innovative medicines and products that help billions of people round the world live longer, healthier and happier life.
that drug companies reduce their prices and supply them with the cheapest pharmaceuticals.
IMPACT ON R & D
Glaxo SmithKline will have global drug sales of 17 billion, and the combination of their crucial research and development arms is expected to save them 250 million. The company will have the largest annual research and development budget in the world at 2.4 billion. A number of new products (Havrix, Priorix, Varilrix, Starvits) were launched during the year. One of the most extensive development pipelines in the pharmaceutical industry, with a total of 30 new chemical entities (NCEs) and 19 vaccines in clinical development (phase II / III), of which 13 NCEs and 10 vaccines are in latestage development (phase III) 1.0 billion pounds ($1.7 billion) in annual pre-tax cost savings from the third anniversary of completion of which 250 million pounds ($415 million) is expected to be reinvested in R&D
IMPACT ON EMPLOYEES
Trade unions in Britain have stated that up to 15,000 jobs could go world-wide, out of a total workforce of 105,000, and it is feared that between 2,000 and 5,000 jobs could go within the UK. GlaxoSmithKline have planned to restructured the job in a 3 year phase. Each year GlaxoSmithKline cut down 500 employees. GlaxoSmithKline has adopted. Life methods to cut down the jobs i.e last in first out. Other then that GlaxoSmithKline conduct a market survey in each phases the finds out what kind of job are available in to the market and then adjust their employees into those firms, if their employees need training to get first in that organization GlaxoSmithKline provides them the opportunities too to get trained.
IMPACT ON PRODUCT
As both companies were in the same business producing some similar products such as Augmentin, amoxil, Panadol,etc. One of the major challenge which they faced after merger was integrating there product line. And for this they have changed the positioning statement for various products for example there gastric medicines like Zantac.In short we can say that there product line was also integrated but with some changes as mentioned above. On the other hand merger provides an opportunity for GSK to produce new products. This was easy now because of a simple reason that they were sharing research and development cost.
IMPACT ON SALES
An industry-leading sales and marketing force of approximately 40,000 employees globally, including over 7,200 sales representatives in the US, providing Glaxo SmithKline with global marketing strength Efforts were also made to focus on export sales, which grew by 34.1% over the previous year. The consumer business also showed growth of 14.9% driven by existing brands, re-introduction of Horlicks at the end of 2002 and of sensodyne during the first half of the year 2003.The period under review also witnessed very strong growth and a significant improvement in sales of Animal Health products, which registered a growth of 67.7% over last year.
After merger profit has increased by 140% which is way beyond when the companies were working separately. On the other hand earning per share has also increased. Previously it was 7.45 of both the firms now it has risen up to 14.09 Glaxo SmithKline would have a combined market capitalization of approximately 114 billion pounds ($189 billion) (based on the London Stock Exchange closing market prices for the two companies as at January 14, 2000) and would be one of Europe's largest companies by market capitalization.