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Mexico's Pill Pioneer
by Gerald S. Cohen
The rush to market
The cortisone discovery put Syntex on the map. Upjohn just a few months later discovered a one-step process for manufacturing an effective and simpler compound called hydrocortisone. But the process relied on tons of progesterone, a quantity that could be satisfied only by Syntex's patented process. Upjohn's discovery translated into an immediate infusion of $5 million in cash for Syntex.
A group of dignitaries listens as Rosenkranz (far right) explains a chemical process at Syntex's headquarters in Mexico City in the 1950s.
(Photo courtesy George Rosenkranz) |
These many months of work also set up Rosenkranz's team for the discovery of the birth control pill. Progesterone, testosterone, estrone, estradiol, and cortisone were all close relatives of a soon-to-be-synthesized compound called norethindrone. In October of 1951, Luis Miramontes, a college student under the direction of Rosenkranz and fellow researcher Carl Djerassi, synthesized norethindrone, the active ingredient for what would become the oral birth control pill. Syntex patented norethindrone in November of that year. It would take nine more years of experimentation and patient trials for an FDA-approved pill to make it to market, and it wouldn't be Syntex's product.
During this period, Rosenkranz recalls that religion and politics, rather than science, drove scientific decisions. "I went around Europe and the world offering the contraceptive, but nobody wanted it," he says. Because Syntex did not have the resources to market the product internationally, it first offered to become the bulk supplier of norethindrone to Parke-Davis. But in 1956, the decision by a company to manufacture an oral contraceptive meant risking a boycott of its whole product line by religious opponents. Ultimately, the big drug manufacturer backed away from the deal.
Meanwhile, G.D. Searle and Co. moved ahead with a compound remarkably similar to norethindrone, patented its discovery, and went to market with it in 1960. In the end, it made little difference which company got there first. A few years later, Syntex was able to capture the majority of the market share through licensing agreements for norethindrone with Ortho, Eli Lilly, and a once-again-interested Parke-Davis. Syntex also brought its own oral contraceptive to the market.
But the pill was neither the first nor the last of Rosenkranz's major accomplishments at Syntex. His team attracted the interest of Wall Street investor Charles Allen, who with his brother in 1956 purchased Syntex Corp., parent company of the Mexican and U.S. Syntex entities, and took it public in 1958 with a stock authorization of 2 million shares, of which 1.2 million were immediately issued. Rosenkranz, named one year earlier as president and CEO, was retained.
In 1964, Rosenkranz decided to move the company to Palo Alto so that it could be closer to its major market. In the midst of the Palo Alto expansion, Syntex experienced one of the greatest stock runs of the decade. After announcing a three-for-one split of stock on July 31, 1963, Syntex stock soared. Shares that had sold for only $5.75 at the beginning of the year rose as high as $227.50 by mid-October. On November 1, Syntex stock rose $21, the year's most active single-day rise on any major exchange.
With most of the major advances in steroidal research behind it, Rosenkranz realized that if the company were to continue to prosper, it would need to expand into other areas. A team of researchers began exploring possibilities for a nonsteroidal anti-inflammatory drug for the systemic treatment of rheumatoid arthritis and osteoarthritis. The result of this research was another blockbuster drug, Naprosyn. Over the next few years, the FDA cleared Naprosyn for use in treatment for a wide range of illnesses including osteoarthritis, bursitis, a group of soft tissue injuries, and juvenile arthritis. Five years later, naproxen sodium was introduced to the U.S. market as Anaprox. By 1983 the two drugs were the largest-selling nonsteroidal anti-inflammatories in the world. Both helped boost Syntex's annual sales to $1 billion in 1987. Alleve, a pain reliever used for arthritis, muscle pain, and menstrual cramps, followed a few years later, making Syntex's transformation into a major pharmaceutical company complete.
The lives of corporations, however, are not very different from the lives of individuals; in a moment, things can change. The fortunes of Syntex shifted dramatically in December 1993 when its patent protection on Naprosyn and Anaprox expired. Syntex's profits declined significantly as cheaper generic versions flooded the market. With falling profits but significant assets, the company became an attractive takeover target.
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