| Type | Public (NYSE: KG) |
|---|---|
| Industry | Pharmaceutical company, health care |
| Founded | 1994 |
| Headquarters | Bristol, Tennessee, USA |
| Key people | Brian Markison, CEO Joseph Squicciarino, CFO Eric J. Bruce, CTO |
| Products | Pharmaceuticals |
| Revenue | $1.7 billion USD (2009)[1] |
| Operating income | $236 million USD (2009)[1] |
| Net income | $92 million USD (2009)[1] |
| Employees | 3,381 |
| Website | www.kingpharm.com |
King Pharmaceuticals (NYSE: KG), was the world's 39th largest pharmaceutical company, based in Bristol, Tennessee.[2][3][4] However, on October 12, 2010, King was acquired by Pfizer for $14.25 per share.[5] King produced a wide range of pharmaceuticals, including Altace for heart attack prevention, Levoxyl for hypothyroidism, Sonata, a sleeping aid, and Skelaxin, a muscle relaxant. King Pharmaceuticals operated manufacturing facilities in Bristol, Tennessee, Rochester, Michigan, St. Louis, Missouri, St. Petersburg, Florida, and Middleton, Wisconsin, and they employed approximately 2,700 people including a sales force of over 1,000 individuals.
King's wholly owned subsidiaries were Monarch Pharmaceuticals, Inc., King Pharmaceutical Research and Development, Inc., Meridian Medical Technologies Inc., Parkdale Pharmaceuticals, Inc., King Pharmaceuticals of Nevada, Inc., and Monarch Pharmaceuticals Ireland Limited.
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King Pharmaceuticals was founded in 1993 by John M. Gregory.[6] In January 1994, King acquired a former Beecham plant in Bristol, Tennessee. The 500,000-square-foot (46,000 m2) facility was purchased for $1.18 million from RSR Pharmaceutical, who had been using it after Beecham merged with SmithKline. King initially manufactured drugs for other pharmaceutical companies, but soon established a strategy of acquiring branded prescription drugs, which have a much higher gross margin than contract manufactured drugs.
1994 to 1998, King obtained about twenty smaller branded drugs and then went public in June 1998.
During 1994, the U.S. National Right to Life Committee announced an anti-RU-486 boycott, targeting all Hoechst pharmaceutical products including Altace. By September 17, the pro-life organization Pharmacists For Life International joined the NRLC anti-RU-486 boycott "...against the American subsidiary of Hoechst, AG Hoechst-Roussel, Hoechst-Celanese, its generic subsidiary Coply Pharmaceuticals and the agricultural Hoechst subsidiary"[7] while asking U.S. consumers to "...focus on key Hoechst drugs which have the most economic impact rather than taking an across-the-board shotgun approach"[7] and specifically targeting Altace as a boycott list item.[7][8]
Hoechst merged with Marion Merrill Dow of Kansas City, Missouri in 1995, forming the Hoechst U.S. pharmaceutical subsidiary Hoechst Marion Roussel (HMR). Altace was bringing in under $90 million in U.S. revenues for HMR and Hoechst had stopped promoting Altace within the United States.,[9] and King Pharmaceuticals President Jefferson "Jeff" Gregory also began negotiations in 1995 with Hoechst to acquire U.S. distribution rights to Altace.[9]
The King Pharmaceuticals wholly owned subsidiary Monarch Pharmaceuticals, Inc. (another brother of John Gregory - Joseph Gregory - was then the president of Monarch Pharmaceuticals) acquired ownership of the U.S. distribution and marketing rights to Altace and other Hoescht products from Hoescht AG subsidiary Hoechst Marion Roussel of Kansas City, Missouri on December 18, 1998, and [10] following a January 1999 merger a few weeks later with Rhône-Poulenc, Hoechst assumed the new corporate identity of Aventis).
In 2001, Forbes magazine ranked John Gregory among the 400 richest Americans. The bulk of Gregory's personal fortune was due in large part due to the ability of King Pharmaceuticals, Inc. to reintroduce the Hoechst branded prescription drug Altace back into the U.S. market under the King Pharmaceuticals,Inc. subsidiary Monarch Pharmaceuticals brand following the 1998 U.S. marketing and distribution agreement between KingPharmaceuticals/Monarch and Hoechst/HMR.
In late December 1998, King Pharmaceuticals (d.b.a. Monarch Pharmaceuticals, Inc.) purchased the U.S. marketing and distribution rights of the company's most successful drug, Altace, for $362.5 million from the U.S. subsidiary of Hoechst AG, Hoechst Marion Roussel of Kansas City.[11] As a result of increasing the number of sales representatives and the findings of the Heart Outcomes Prevention Evaluation (HOPE), Altace sales sky rocketed. Using profits from Altace, King continued to add product lines, the most significant purchases being Levoxyl, Thrombin, and Cytomel in 2000. Also in 2000, seeing fewer opportunities to obtain branded drugs, the company acquired an R&D company based in North Carolina. In 2002, King purchased a maker of auto-injectors, Meridian Medical Technologies.
In 2002, John Gregory stepped down as CEO, and his brother Jefferson Gregory took over. Then in 2004, Jeff Gregory stepped down as well after the SEC began investigations into King’s Medicaid billing practices.[12] The board named Brian Markison to replace him. Soon after, in July 2004, a deal was made for Mylan Laboratories to acquire King for $4 billion.[13] Investors, most notably Carl Icahn, were critical of the merger, saying that Mylan was overpaying for King. The next year the deal was called off.
In 2008 King Pharmaceuticals acquired Alpharma Pharmaceuticals to expand into the pain treatment market. From the acquisition, King gained the patents on the pain management drugs, Flector and Embeda.[14]
On October 12, 2010, Pfizer Inc. (NYSE: PFE) announced it would acquire Bristol-based King Pharmaceuticals, Inc. for a total cost to Pfizer of $3.6 billion in cash or $14.25 per share. The acquisition would broaden Pfizer's product line of pain relief and management medication, such as King's Embeda, Avinza, and the Flector Patch.[15]