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American Home Products 5 Giralda Farms, Madison, NJ 07940-0874
www.ahp.com (973) 660-5000    Fax: (973) 660-7026  

The Scoop  

Diverse and successful

With $13.5 billion in sales in 1999, American Home Products (AHP) is the sixth-largest phramaceutical company in the world. It produces the most widely-prescribed drug in America, the estrogen therapy medication Premarin. Despite this key product, AHP owes much of its success to its diversification. Subsidiaries Cyanamid and Wyeth-Ayerst are leaders, respectively, in the production of children's vaccines and prescription drugs; other AHP brands, such as Advil and Preparation H, enjoy widespread consumer recognition. The company also produces veterinary medicine and owns the majority stake in two biotech firms. In order to concentrate on its pharmaceutical business, however, AHP has sold its agricultural products division to BASF.

Going big

Founded in 1926, the company has experienced steady growth over the years, punctuated by a series of significant acquisitions. Among these are Genetics Institute; A.H Robins (the producer of Chap Stick, Dimetapp, and Robitussin); and the company that vaulted AHP to the top of the industry, American Cyanamid. By 1990, AHP handled a wide variety of products, selling household goods, foods, and medical supplies. Since then, the company has concentrated its business down to three completely health related divisions: OTCs (Advil, Centrum, Dimetapp), prescription pharmaceuticals and vaccines, and related animal health business.

With $1.5 billion devoted to research and development annually, AHP continues to develop new medicines even as it continues to pursue new business acquisitions. In 2000, that number will be raised to $2 billion. Today, the company is constantly expanding its reach, racking up huge global sales in prescription pharmaceuticals, over-the-counter medications, and animal health care products. Within these categories, it is now focusing on such areas as women's health care, central nervous system disorders, and oncology.

Bumps in the road

Not all of AHP's attempts to expand its operations have gone smoothly however. Merger talks in early 1998 with SmithKline Beecham broke down, reportedly over cultural differences. Five months later, AHP again looked to be on the verge of a merger, this time with St. Louis-based Monsanto Co. The deal, priced at nearly $35 billion, was to create one of the largest life sciences outfits in the world, with a market value exceeding $98 billion. Alas, the deal was not to be, as talks broke down in the very late stages. This time the two claimed that the deal would not have been in their shareholders' best interests. But people in the know maintained that the bigger obstacle was the egos of the major players involved, particular American Home Products Chairman John R. Stafford.

Wait a minute

Amid expensive settlements involving the diet drugs Redux and Pondimin, American Home agreed to merge with Warner-Lambert in November 1999. Under the terms of the $72 billion dollar transaction American Home's chairman, John Stafford, would chair the new company and Warner-Lambert's Lodewijk J.R. de Vink would assume the responsibilities of chief executive. In 18 months Stafford would cede the top spot to de Vink. Only hours after the merger was announced, Pfizer made an $82.4 billion unsolicited offer for Warner-Lambert. AHP walked away with a $1.8 billion settlement, leaving Pfizer to acquire Warner-Lambert.

Future prospects

Still flying solo, AHP has not given up on its desire to find a business partner. Several firms have been mentioned as potential merger prospects, including such industry heavyweights as Bristol-Myers Squibb, Bayer Corp., and even (again) SmithKline Beecham. Even if it should stay on its own, though, the future appears bright. The impending release of seven new products, which are expected to eventually earn the company $600 million in 1999 and as much as $2 billion in 2001, has fueled optimisim among many analysts. The most promising among these is Enbrel, a rheumatoid arthritis treatment that could by itself earn over $500 million a year. Other new products include Sonata, for sleep, Rapamune, for transplantation, and Protonix, for gastric conditions. That is excellent news for AHP, which in the last couple of years has faced lawsuits relating to some of its products, such as Norplant, and which has had to take popular diet drugs, Redux and Pondimin, and painkiller Duract off the market, in addition to spending millions in court settlements.

Getting Hired  

American Home Products' corporate headquarters accepts resumes for the limited number of positions that become open each year. AHP's subsidiaries, however, conduct their hiring autonomously to fit their particular needs. Consult the AHP's home Web page, located at www.ahp.com, for information about contacting these companies.

Our Survey Says  

AHP offers a "substantial history of innovation" and a "dynamic, entrepreneurial" corporate culture. Policies such as the dress code vary by subsidiary and office, but AHP employees say that the top management is "consistently dedicated" to providing new employees with the resources they need to succeed. While AHP's strategy of frequent acquisition causes "frequent short-term disruptions," employees say that the company offers "long-term stability" and the promise of "merit-based" promotions and bonuses.

Employment Contact  

Rene R. Lewin
Human Resources

Products and Services  

Prescription drugs;Children's vaccines;Consumer health products;Biotechnology;Veterinary medicine

Key Competitors  


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