AHP and Monsanto announce merger

Pharmaceutical Representative

American Home Products, the Madison, NJ-based parent company of Wyeth-Ayerst, and Monsanto Company, the St. Louis-based parent company of Searle, announced June 1 that they will merge.

American Home Products, the Madison, NJ-based parent company of Wyeth-Ayerst, and Monsanto Company, the St. Louis-based parent company of Searle, announced June 1 that they will merge.

If approved by the Federal Trade Commission, the merger will create a powerhouse in the global pharmaceutical industry, with combined projected sales of approximately $23 billion. Worldwide, that accounts for roughly 3% of market share, and places the new corporation in fourth place, behind Novartis Corp.

In the United States, the new corporation will be the leader in sales of prescription and over-the-counter pharmaceuticals. Together, American Home Products and Monsanto could rake in more than $6.5 billion in sales, according to IMS Health, Plymouth Meeting, PA.

Revenue for American Home Products was driven in 1997 by sales of its leading estrogen replacement therapy, Premarin. Pharmacists dispensed more than 45.1 million prescriptions for Premarin in 1997, enabling the product to bring in $807 million in U.S. sales, according to IMS Health. Prempro (American Home Products' other estrogen replacement therapy), Effexor (an antidepressant), and Cordarone (an anti-arrhythmia product) added another $726 million to American Home Products' sales revenue.

Leading products for Monsanto in 1997 included Ambien, a non-barbiturate sedative; Daypro, an antiarthritic; Calan SR, a calcium channel blocker; Cytotec, an antiulcerant; and Demulen, an oral contraceptive. Combined sales of the products totaled $970 million last year, with the leader - Ambien - bringing in $367 million with 9.1 million prescriptions dispensed, IMS Health reported.

On the rebound

The proposed merger with Monsanto is American Home Products' second stab at partnering with a major pharmaceutical company this year. Earlier in 1997, the company courted SmithKline Beecham, but Glaxo Wellcome had similar inclinations and wooed SmithKline Beecham away from American Home Products.

At the time, industry analysts speculated that a major reason behind the merger talks was a desire to pursue biogenetic research more aggressively. It's likely that the same philosophy supports the most recent merger announcement.

"Our new company is designed to be successful in the face of continued consolidation and increasing worldwide competition in the life sciences," said Robert Shapiro, Monsanto's chairman and CEO, in a prepared statement. "We will have the scientific depth, global marketing capabilities and financial resources to take greater advantage of the opportunities before us and to bring innovative new products to market faster."

Currently, the two companies employ more than 4,000 pharmaceutical sales reps. Wyeth-Ayerst has a sales force of 2,920 sales reps and Searle boasts a sales force of 1,240 reps, according to data from The Plymouth Group, Somerset, NJ. There has been no word on if or in what way sales forces will be affected by the proposed merger.

The only personnel announcements made by the companies concerned its highest level positions. Shapiro and John Stafford, chairman and CEO at American Home Products, will share the titles and responsibilities of CEO and chairmen of the new corporation, they announced.

The corporation will be headquartered in Madison, NJ, with the pharmaceutical business headquartered in Radnor, PA. PR