In August 1995, Upjohn announced a merger with
Pharmacia. John Zabriskie from Upjohn was named CEO of the
combined company, called Pharmacia & Upjohn (P&U or PNU).
Jan Ekberg of Pharmacia was named the Chairman. The merger
was finalized in October 1995.
Pharmacia had major centers in Sweden and in Italy. It
had strong European sales whereas Upjohn has strong U.S. sales.
Zabriskie’s plan was to have three major operational centers,
Kalamazoo in the US, Stockholm/Uppsala in Sweden and Milan in
Italy. These would compete against each other. The corporate
headquarters would be in London.
P&U purchased an expensive piece of land on the bank of
the River Thames west of London, and built a headquarters there.
It cost $1.2 billion to set up this new corporation. As can be
see in early corporate literature, the goal was to aspire all
employees to be creative and sucessful.
Alas, the
aspiration and competition model was not successful. There was too much
duplication, and it did not lead to any lucrative drug
breakthroughs or efficiencies.
In 1997, Fred Hassan, a Pakistani-born businessman, was
brought on board as CEO of Pharmacia & Upjohn, replacing
John Zabriskie. His office was initially in Portage Building 88,
the old 1961 Upjohn headquarters building. Hassan had made a career as a turnaround specialist
and P&U needed that. Hassan made many swift changes, including
moving the headquarters from the UK to New Jersey.
There were thousands of layoffs as Hassan cut the
corporation to the bone. Another $1.2 billion was spent for this
restructuring. P&U acquired the cancer company Sugen in 1999 for
$650 million, which subsequently yielded Sutent, a
billion-dollar product.
In December 1999, P&U announced a merger with Monsanto,
although it was really P&U purchasing Monsanto.
The new company was named Pharmacia. The only goal of this
acquisition was to get the Searle pharmaceutical operation,
which had the lucrative COX-2 pipeline. It was finalized in
April 2000.
Pharmacia & Upjohn lasted for five years. The first
two years were a brave attempt to aspire all its employees to
greater things. Unfortunately, that did not succeed. The final
three years were about cost-cutting and setting up the company
to be a future acquisition target.
