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Fisons plc

Fisons plc

Fison House, Princes Street
Ipswich, Suffolk
United Kingdom

Subsumed by Rhone-Poulenc Rarer, Inc.
Incorporated:
1843 as James Fison and Sons
SICs: 2834 Pharmaceutical Preparations; 3820 Measuring and Controlling Devices; 2870 Agricultural Chemicals

In 1995 Fisons plc was acquired by Pennsylvania-based Rhone-Poulenc Rorer, Inc., in turn wholly owned by Frances chemical giant Rhone-Poulenc S.A. Though its status among the worlds pharmaceutical companies was subsequently subsumed in layers of corporate ownership, Fisons had boasted a history of more than 300 years in business before its dismantling. Founded as a flour mill in the late 18th century, it quickly developed into one of the worlds largest fertilizer producers. As the fertilizer market matured into a low-profit commodity over the course of the 20th century, the company diversified into horticultural products, Pharmaceuticals, and scientific instruments. In the mid-1980s, Fisons divested its fertilizer interests to focus on the highly profitable medical side of the business. By 1993 the company was the worlds third-largest manufacturer of scientific instruments and ranked among the worlds 60 largest pharmaceutical concerns. Fisons weak research and development efforts and inadequate marketing efforts, however, led to annual losses and a steep decline in its stock price mid-decade. The British company tried to fight off the advances of its Franco-American competitor, but relinquished ownership in the fall of 1995.

Late 18th-Century Origins

Fisons plc began as a flour mill and bakery founded by James pisons in Barningham, England, in the late 18th century. In 1789 a son, also named James, started a makings business that expanded into Stowmarket and Thetford, two river towns that helped the family businesses expand.

James Fison and Sons was formed in 1808, and by 1840 the firm was recording £100,000 in annual sales. Later that decade, the family entered the developing field of fertilizers and moved the businesss headquarters to Ipswich. Within a few years, Fisons had built a manure works and was producing its own sulfuric acid. As fertilizers became the companys primary business, pesticides based on sulphur were added to the product mix.

In 1895 the company was split into two parts: James Fison and Sons and Joseph Fison and Co. During World War I, Fisons helped make explosives, but the company returned to fertilizer by the end of the war to buoy dwindling food production. When fertilizer prices plunged after the war, the two Fison companies, along with two others with which they had recently merged, were reunited to form Fison, Packard, Prentice and Co. (Fisons) in 1929.

Diversification through Acquisition: Mid-20th Century

During the 1930s, Fisons began to expand through acquisitions. The companys most significant addition was the Anglo-Continental Guano Works Ltd., which doubled the size of Fisons. Anglo-Continental was a budding conglomerate with a pharmaceutical subsidiary, Genatosan; Fisons was thus brought into that lucrative market. Fisons acquisitions continued throughout the 1930s, and by 1939, with 39 subsidiaries, it was the largest fertilizer company in Great Britain.

During World War II Fisons felt the pressure of both a manpower shortage and increased demand for fertilizers. Some of the companys manufacturing plants were bombed as well. The company name was shortened to Fisons Ltd. for marketing clarity in 1942, and it emerged from the war with nearly two-thirds of Great Britains fertilizer market.

Fisons made more acquisitions after the wars end, first purchasing Wiffen and Son, a fine chemicals manufacturer. The new subsidiary became part of Fisonss chemicals and biologicals division, headed by Genatosan. The Wiffen acquisition included the Loughborough Glass Company, which would later develop into Fisonss Scientific Equipment division. The purchase of Pest Control Limited during the 1950s brought Fisons into agrochemicals, a market that was closely related to the fertilizer business. Fisons hoped to capitalize on the two fields common research, development, and distribution methods.

In 1968 researchers at Genatosan discovered disodium cromoglycate (DSCG), which was developed as the branded anti-allergenic Intal. The drug differed from its competitors because it was a prophylactic, whereas others were taken after the onset of allergic symptoms. Intal sales boosted the pharmaceutical divisions profits from £1.14 million in 1968 to £2.43 million in 1970 and £5.6 million in 1973.

Unsuccessful Reorganizations in 1970s

By 1971 Fisons had organized its many subsidiaries into four divisions: Fertilizers, Agrochemicals, Pharmaceuticals, and Scientific Equipment. The company developed these primary businesses through acquisitions as well as product and market expansion. Acquisitions were focused geographically in Europe, Australia, and the United States.

Fertilizers contributed 50 percent of the conglomerates annual sales at that time, and Fisons fought to maintain a competitive edge in Great Britains fertilizer market: 80 percent of the divisions sales were in its home country. However, the supply side of this division was hamstrung, since its primary ammonia supplier was also its primary competitor, Imperial Chemical Industries pic. During the first half of the 1970s, Fisons tried to remedy this situation by increasing its bulk buying in global markets, especially patronizing Morocco. Morocco increased its prices six-fold in 1973, though, and other suppliers quickly followed suit. At the same time, U.K. price controls held fertilizer prices below the world market price for ammonia, effectively eliminating Fisonss fertilizer profits.

Fisonss Agrochemicals group also ran into trouble during the 1970s, when it lost a valuable customer, Ciba-Geigy Ltd. Fisons tried to support this group by increasing capital investments, especially in the United States. The company also boosted research and development funds, but since most of this divisions efforts focused on creating substitutes for products that were already on the market, Fisons lacked a strong selling suit.

During the 1970s, anti-allergens comprised between 60 and 70 percent of the Pharmaceutical divisions sales, but Intal had only captured 6.1 percent of the anti-allergy market, which was led by Glaxos Ventolin. After a decade of research, the division was dealt a serious blow when Fisons decided not to market its new drug, Proxicromil, a successor to Intal, because it was found to cause cancer in animals. With Intals nonrenewable patents set to run out in 1982, the Pharmaceutical divisions prospects were not good.

In 1972 the Scientific Equipment Division was spun off from the Pharmaceutical division, and acquisitions in Germany and Australia, as well as the purchase of Britains Gallenkamp, helped Fisons become Great Britains top scientific equipment manufacturer. Many of Gallenkamps contracts were with the government, universities, and hospitals, however, many of which cut their expenditures in the recessionary 1970s.

Fisonss Horticulture division was separated from the Agro-chemical division in 1977. It produced and marketed amateur and professional gardening products, and its strengths were in peat-based products, especially the popular and well-established Fisons Gro-Bagsself-contained, nutritionally balanced soil sacks. The peat operations were extended with a new plant in Yorkshire and the acquisition of Hewletts, a company with peat reserves in Cumbria and Scotland. Although it was a new focus for Fisons, horticulture was actually one of the companys most secure businesses by the end of the 1970s. It was vertically integrated and held commanding shares of the markets in which it operated: 50 percent of the lawn fertilizer market; 20 percent of the solid fertilizer market; 30 percent of the peat market; and 12 percent of Great Britains weed and pest control business.

Throughout the 1970s, Fisons had gone into debt to make a nebulous reorganization and prop up its historical focusfertilizersjust as competition and global consolidation in this market eroded profits. At the same time, high interest rates and inflation dug into the profits Fisons managed to earn through its other operations. By 1980 Fisonss prospects looked dim. The Fertilizers division was operating at a loss; Agrochemicals could not hope to compete with the research and development outlays of bigger competitors; the Scientific Equipment division was suffering from government cutbacks; horticulture was a small, underdeveloped business; and the Pharmaceuticals division, a primary profit-maker, had suddenly lost its only long-term growth product. Fisons was on the verge of bankruptcy.

Shift to Focus on Pharmaceuticals in 1980s

John Kerridge was promoted to chief executive officer (CEO) from executive director in mid-1980 and given the task of reversing Fisons downward spiral. He began the reformation by cutting costs, closing down four production units and three farms in the Fertilizer division, then eliminating more than 1,000 positions in the group. Fisonss corporate headquarters were moved from high-rent London back to Ipswich, and economizations were made in the Scientific Equipment division as well. Kerridges most fundamental change was the sale of the Fertilizer division to Norsk Hydro a.s. in 1982 for £59 million. The divestment was a radical change for Fisons and involved the disposal of what had been the foundation of the company for more than a century, as well as the division with the most sales. The troublesome Agrochemicals division was sold the following year to Schering A.G. for £60 million.

These divestments left Fisons with three primary businesses: Pharmaceuticals, Horticulture, and Scientific Equipment. The pharmaceutical group was expanded with the 1980 purchase of Great Britains Charnwood Pharmaceuticals, Australias Orbit Chemical Pty. Ltd. in 1982, and Italys Intersint in 1983. Great Britains Weddel Pharmaceutical was acquired in 1983 and merged with Charnwood, which would specialize in generic drugs.

Fisonss Horticultural operations grew geographically through a joint venture with Canadas Western Peat Moss in 1980, and the acquisition of Langley Peat North Ltd. of Alberta in 1983. These purchases gave Fisons access to large peat supplies and the North American market. The British operations were supplanted with the acquisition of Webb and Bees seed operations from Shell Holdings (U.K.) Ltd. in the early 1980s.

The Scientific Equipment division grew through the addition of Watson Victor, a New Zealand distributor of laboratory equipment, in 1982. Haake-Butler Instruments, of which Fisons owned 67 percent, was subsequently founded in the United States. Overall, Kerridges fundamental changes improved Fisonss balance sheet dramatically; the corporation went from making annual interest payments of £13 million in 1980 to having no net borrowings in 1983. Fisons was even secure enough to make a successful stock offer of £28 million that year.

The Pharmaceutical divisions continued heavy research and development expenditures resulted in two new drugs: DSCG-based Opticrom, released in 1984, and Tilade, a new asthma treatment, introduced in 1986. This division acquired Laboratorios Caesen, of Spain, in 1984, and Bracco de Mexico in 1986.

Kerridge was made chairman in 1984, and he clarified the strategy he had been using to turn Fisons around: We wish to operate in industries of inherent attractiveness, which have potential for growth and a record of profitability of successful participants, [and] we wish to be in clearly defined business segments where Fisons can reasonably aspire to being an effective competitor by virtue of its size and its financial and managerial resources. The company would no longer operate on the fringes of its chosen markets, as it had in the 1970s. For example, Fisons concentrated on the horticulture and scientific equipment markets, which were not yet consolidated or dominated by a single powerful company. Fisons hoped to be that company.

Fisons burst onto the U.S. market for scientific equipment, which was home to 40 percent of the worlds research activity, with the acquisition of Curtin Matheson Scientific Inc. (CMS) in 1984. CMS was the second-largest distributor of scientific equipment in the United States. Fisons also purchased United Diagnostics Inc. and Pacific Hemostasis Laboratories Inc., which were combined with CMS to give the latter manufacturing capacity. By the beginning of 1985, Fisons Scientific division was the third-largest organization of its type in the world and the largest outside the United States.

Fisons continued to grow, acquiring in 1985 Murphy Chemical, which helped widen the Horticulture divisions portfolio of products, extend marketing in Europe and North America, and shore up Fisonss peat supplies. Later in the decade, the Horticulture division would sell its 50 percent share of Asef-Fison B.V. to its joint-venture partner, DSM Agro Specialties B.V. In 1986 Fisons bought Applied Research Laboratories, a leading manufacturer of scientific equipment with global marketing capacity, and two years later it purchased Union Scientific Limited, a Hong Kong company.

Several important acquisitions were also made by the Pharmaceutical division in the late 1980s. Italchimici SpA, an Italian firm, and Pennwalt Corporations pharmaceutical division, a U.S. manufacturer of ethical and over-the-counter drugs, were purchased in 1988. A French company, Gerbitol S.A., brought expertise in cardiovascular medicine, antibiotics, and dietary supplements to the division in 1989. In all, with the help of its significant 1980s acquisitions, Fisonss pre-tax profits increased by an average of 56 percent per year to £230 million (US$410 million). The corporations market capitalization rose from £40 million in 1980 to £3 billion in 1990.

Declining Profits Lead To Divestments in 1990s

The 1990 purchase of VG Instruments, a manufacturer of mass spectrometers and surface analysis instruments, more than doubled Fisons output of analytical instruments and catapulted the Scientific Equipment division to the number three spot in the global marketplace. It looked as if Fisons had launched its second consecutive decade of growth and prosperity. By the end of 1991, however, it was clear that problems in the Pharmaceutical division had dragged the entire company down. Late that year, Fisons revealed that two of its important new drugs, Opticrom for hay fever and Imferon for anemia, had been recalled from the U.S. market after the Food and Drug Administration (FDA) denied approval of the companys British factories. According to a 1992 Economist article, the FDAs routine check of Fisons U.K. factory revealed warehouses with holes in their outside walls; poor record keeping; and the possibility of rodent, insect or avian activity in the [transport] containers. Fisonss pre-tax profits for 1991 dropped 17 percent to £190 million, and the company faced required investments of more than £25 million to bring its British factory up to U.S. standards.

John Kerridge resigned on health grounds in mid-January 1992 and was temporarily replaced by Patrick Egan. In April of that year, Egan became chairman, while Cedric Scroggs was selected as chief executive officer. The new leaders decided to sharpen Fisons focus on Pharmaceuticals and scientific equipment by divesting its OTC drug and horticultural businesses.

In November 1992, Fisons agreed to sell its North American OTC drug operations to Swiss drug concern Ciba-Geigy Ltd. for £92 million (US$60.3 million). This segment represented approximately 50 percent of Fisonss global consumer health division sales and 40 percent of that groups profits. Egan and Scroggs recognized that the British company lacked the resources and marketing influence necessary to compete in the American consumer drug market.

Fisonss new management forged a joint development and marketing agreement with Allergan Inc., a U.S. opthalmic company, early in 1993. The arrangement called for Fisons 400 U.S. salespeople to co-market Allergans opthalmic drug Acular. The U.S. companys sales force, in turn, would help market Fisons opthalmic treatment Opticrom. The arrangement presumed that Opticrom would be re-registered by the FDA. By early 1993, Fisons had made significant improvements in its Opticrom factory, but new FDA inspections had still not resulted in approval late in the year.

Fisons suffered yet another setback when it suspended development of an asthma medicine, tipredane. The company had been banking on the new drug to bolster its core respiratory business in the late 1990s. Tipredane had been licensed by Fisons from Bristol-Myers Squibb Co. and was in the midst of unsuccessful clinical trials in more than a dozen countries. The failure of tipredane left Fisons with only one new drug, re-macemidean epilepsy treatmentin development.

In May 1993 Fisons sold its North American horticulture business to a consortium led by Macluan Capital Corp. of Vancouver for US$60 million in cash and used the proceeds to reduce its debt. Fisons also planned to sell the remainder of its Horticulture division as soon as an opportunity arose. In July the company sold its consumer health products business in Australia and New Zealand to Warner-Lambert for about US$23 million. The sale included the Rosken line of therapeutic skin-care products.

Acquisition By Rhone-Poulenc Rorer in 1995

Despite Fisonss early 1990s efforts to bolster its pharmaceutical business, some analysts insisted that the company had neither the research and development strength nor the marketing clout necessary to compete in an ethical pharmaceutical business that demanded frequent discovery of innovative medicines. Industry observers anticipated an imminent merger or takeover for Fisons.

Those expectations intensified as Fisons share price declined from £2.45 in mid-1992 to £1.13 by the end of 1993. Over the course of the latter year, the companys scientific instruments division went £16 million into the red. CEO Cedric Scroggs was fired that December, Finance Director Roy Thomas took early (and presumably involuntary) retirement, and Stuart Wallis took the helm of the battered firm.

Throughout the 18 months, Wallis made a valiant and reasonably successful effort to bolster Fisons stock price. Though the company suffered a loss on 1994, a major reorganization and divestment program eliminated at least 1,000 jobs, cut costs, and helped the firms stock price rebound nearly 75 percent to £1.93 by mid-August 1995.

That gain was not enough to prevent Franco-American rival Rhone-Poulenc Rorer, Inc. (R-PR) from making a hostile £1.7 billion (US$2.6 billion) bid for control of Fisons on August 18th. Though some analysts thought the offering price, at 16.7 times expected net revenues, was too high, CEO Wallis complained to Chemical Marketing Reporter that the price significantly undervalues Fisons. The British company backed up that assertion when it reported a 40 percent increase in net income, to £48.6 million, for the first half of 1995. That happy news helped advance the firms stock to £2.60 by the end of September.

In October, R-PR upped its bid of £2.65 per share, or US$2.9 billion. Unable to find a more amicable suitor, Fisons accepted the takeover that month. Though the British firm and its many subsidiaries around the world continued to be listed among R-PRs operations through 1996, it soon became clear that the tri-centenarian entity would eventually cease to exist. Over the course of 1996 and 1997, R-PR slashed almost 3,000 redundant jobs in the United States and Great Britain, divested several Fisons divisions (including the scientific instruments business), and discontinued many of the subsumed companys pharmaceutical research and development programs.

For its nearly US$3 billion, Rhone-Poulenc Rorer got an entree into the US$15 billion and growing respiratory drug market, or more specifically, the respiratory drug delivery segment. At the time of its purchase, Fisons had two promising delivery media in the development pipeline: a non-CFC aerosol and a dry-powder inhaler. Indeed, Fisons likely played a role in an increase in sales and net at R-PR from 1995 to 1996. Year-over-year revenues increased six percent, to US$5.4 billion, and net grew by almost one-third, to US$473.5 million.

In November 1997, when Rhone-Poulenc acquired the remaining one-third of R-PR that it did not already own, Fisons fate appeared sealed. Officials at the companys U.S. and U.K. headquarters early in 1998 asserted that Fisons no longer existed, either as a group of subsidiaries or a division.

Further Reading

Finlay, Paul N., How Fisons Managed its Turnaround, European Journal of Marketing, Vol. 22, pp.10317.

Firms Horticulture Business to Be Sold for $60 Million, Wall Street Journal, May 19, 1993, p. AII.

Fisons Shares Plunge as Scroggs is Sacked, ECN-European Chemical News, December 20, 1993, p. 8.

Fisons Stock Tumbles as Drug Maker Halts New Medicines Trials, Wall Street Journal, April 7, 1993, p. A10.

Fisons Strong Profit Gain is Ammo in Takeover Fight, Chemical Marketing Reporter, September 18, 1995, p. 20.

Fisons to Cut 1,000 Jobs in Continuing Reorganization, Chemical & Engineering News, January 31, 1994, p. 12.

Fisons to Sell Some Operations in Canada, U.S. to Ciba-Geigy, Wall Street Journal, November 27, 1992, p. A6.

From a Corner of Suffolk to the Four Corners of the Earth, Ipswich, England: Fisons pic, 1984.

Full Circle, The Economist, January 18, 1992, p. 69.

Leblond, Doris, Reaping a Home Harvest, ECN-European Chemical News, February 17, 1997, p. 22.

A Lot of Hot Air: Fisons, The Economist, September 23, 1995, p. 55.

Moore, Stephen D., U.K.s Fisons and Allergan Link up to Develop, Sell Opthalmic Products, Wall Street Journal, February 5, 1993, p. B3A.

R-PR To Slash Jobs as Fisons Comes on Board, ECN-European Chemical News, February 5, 1996, p. 19.

Thayer, Ann, Fison Gives in to Rhone-Poulenc Rorer, Chemical & Engineering News, October 16, 1995, p. 6.

April Dougal Gasbarre

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Fisons plc

Fisons plc

Fison House, Princes St.
Ipswich, Suffolk IP1 1QH
England
(04) 73-232525

Public Company
Incorporated: 1843 as James Fison and Sons
Employees: 14,336
Sales: £1.23 billion (US$2.34 billion)
Stock Exchanges: London
SICs: 6719 Offices of Holding Companies Nee; 2833 Medicinal Chemicals and Botanical Products; 2834 Pharmaceutical Preparations; 3829 Measuring and Controlling Devices Nee; 2879 Pesticides and Agricultural Chemicals Nee

In 1993 Fisons plc was the worlds third-largest manufacturer of scientific instruments and ranked among the worlds 60 largest pharmaceutical concerns. While Fisons was still involved in horticultural products in 1993, it had announced plans to dispose of those operations. The British companys over-the-counter (OTC) pharmaceutical products include the European vitamin brand Sanatogen, and its prescription drugs are comprised of asthma treatments Tilade and Intal; respiratory drugs Aarane and Tipredane; Nasalcrom for hay fever; and Dopacard, a heart drug. Fisonss scientific equipment division concentrates primarily on the manufacture and distribution of spectrometers in North America and Europe. In addition, the companys Green-master and Evergreen brand lawn products, Origins organic composts, and Gro-bags soil are well-known British trademarks of the Horticulture division.

Fisons plc began as a flour mill and bakery founded by James Fisons in Barningham, England, in the late eighteenth century. In 1789 a son, also named James, started a makings business that expanded into Stowmarket and Thetford, two river towns that helped the family businesses expand.

James Fison and Sons was formed in 1808, and by 1840 the firm was recording £100,000 in annual sales. Later that decade, the family entered the developing field of fertilizers and moved the businesss headquarters to Ipswitch. Within a few years, Fisons had built a manure works and was producing its own sulfuric acid. As fertilizers became the companys primary business, pesticides based on sulphur were added to the product mix.

In 1895 the company was split into two parts: James Fison and Sons and Joseph Fison and Co. During World War I, Fisons helped make explosives, but the company returned to fertilizer by the end of the war to buoy dwindling food production. When fertilizer prices plunged after the war, the two Fison companies, along with two others with which they had recently merged, were reunited to form Fison, Packard, Prentice and Co. (Fisons) in 1929.

During the 1930s, Fisons began to expand through acquisitions. The companys most significant addition was the Anglo-Continental Guano Works Ltd., which doubled the size of Fisons. Anglo-Continental was a budding conglomerate with a pharmaceutical subsidiary, Genatosan; Fisons was thus brought into that lucrative market. Fisonss acquisitions continued throughout the 1930s, and by 1939, with 39 subsidiaries, it was the largest fertilizer company in Great Britain.

During World War II Fisons felt the pressure of both a manpower shortage and increased demand for fertilizers. Some of the companys manufacturing plants were bombed as well. The company name was shortened to Fisons Ltd. for marketing clarity in 1942, and it emerged from the war with nearly two-thirds of Great Britains fertilizer market.

Fisons made more acquisitions after the wars end, first purchasing Wiffen and Son, a fine chemicals manufacturer. The new subsidiary became part of Fisonss chemicals and biologicals division, headed by Genatosan. The Wiffen acquisition included the Loughborough Glass Company, which would later develop into Fisonss Scientific Equipment division. The purchase of Pest Control Limited during the 1950s brought Fisons into agrochemicals, a market that was closely related to the fertilizer business. Fisons hoped to capitalize on the two fields common research, development, and distribution methods.

In 1968 researchers at Genatosan discovered disodium cromoglycate (DSCG), which was developed as the branded antiallergenic Intal. The drug differed from its competitors because it was a prophylactic, whereas others were taken after the onset of allergic symptoms. Intal sales boosted the pharmaceutical divisions profits from £1.14 million in 1968 to £2.43 million in 1970 and £5.6 million in 1973.

By 1971 Fisons had organized its many subsidiaries into four divisions: Fertilizers, Agrochemicals, Pharmaceuticals, and Scientific Equipment. The company developed these primary businesses through acquisitions as well as product and market expansion. Acquisitions were focused geographically in Europe, Australia, and the United States.

Fertilizers contributed 50 percent of the conglomerates annual sales at that time, and Fisons fought to maintain a competitive edge in Great Britains fertilizer market: 80 percent of the divisions sales were in its home country. But the supply side of this division was hamstrung, since its primary ammonia supplier was also its primary competitor, Imperial Chemical Industries plc. During the first half of the 1970s, Fisons tried to remedy this situation by increasing its bulk buying in global markets, especially patronizing Morocco. Morocco increased its prices six-fold in 1973, though, and other suppliers quickly followed suit. At the same time, U.K. price controls held fertilizer prices below the world market price for ammonia, effectively eliminating Fisonss fertilizer profits.

Fisonss Agrochemicals group also ran into trouble during the 1970s, when it lost a valuable customer, Ciba-Geigy Ltd. Fisons tried to support this group by increasing capital investments, especially in the United States. The company also boosted research and development funds, but since most of this divisions efforts focused on creating substitutes for products that were already on the market, Fisons lacked a strong selling suit.

During the 1970s, anti-allergens comprised between 60 and 70 percent of the Pharmaceutical divisions sales, but Intal had only captured 6.1 percent of the anti-allergy market, which was led by Glaxos Ventolin. After a decade of research, the division was dealt a serious blow when Fisons decided not to market its new drug, Proxicromil, a successor to Intal, because it was found to cause cancer in animals. With Intals nonrenewable patents set to run out in 1982, the Pharmaceutical divisions prospects were not good.

In 1972 the Scientific Equipment Division was spun off from the Pharmaceutical division, and acquisitions in Germany and Australia, as well as the purchase of Britains Gallenkamp, helped Fisons become Great Britains top scientific equipment manufacturer. But many of Gallenkamps contracts were with the government, universities, and hospitals, many of which cut their expenditures in the recessionary 1970s.

Fisonss Horticulture division was separated from the Agro-chemical division in 1977. It produced and marketed amateur and professional gardening products, and its strengths were in peat-based products, especially the popular and well-established Fisons Gro-Bagsself-contained, nutritionally balanced soil sacks. The peat operations were extended with a new plant in Yorkshire and the acquisition of Howletts, a company with peat reserves in Cumbria and Scotland. Although it was a new focus for Fisons, horticulture was actually one of the companys most secure businesses by the end of the 1970s. It was vertically integrated and held commanding shares of the markets in which it operated: 50 percent of the lawn fertilizer market; 20 percent of the solid fertilizer market; 30 percent of the peat market; and 12 percent of Great Britains weed and pest control business.

Throughout the 1970s, Fisons had gone into debt to make a nebulous reorganization and prop up its historical focus fertilizersjust as competition and global consolidation in this market eroded profits. At the same time, high interest rates and inflation dug into the profits Fisons managed to earn through its other operations. By 1980 Fisonss prospects looked dim. The Fertilizers division was operating at a loss; Agrochemicals could not hope to compete with the research and development outlays of bigger competitors; the Scientific Equipment division was suffering from government cutbacks; horticulture was a small, underdeveloped business; and the Pharmaceuticals division, a primary profit-maker, had suddenly lost its only long-term growth product. Fisons was on the verge of bankruptcy.

John Kerridge was promoted to chief executive officer (CEO) from executive director in mid-1980 and given the task of reversing Fisonss downward spiral. He began the reformation by cutting costs, closing down four production units and three farms in the Fertilizer division, then eliminating more than 1,000 positions in the group. Fisonss corporate headquarters were moved from high-rent London back to Ipswitch, and economizations were made in the Scientific Equipment division as well. Kerridges most fundamental change was the sale of the Fertilizer division to Norsk Hydro a.s. in 1982 for £59 million. The divestment was a radical change for Fisons and involved the disposal of what had been the foundation of the company for more than a century, as well as the division with the most sales. The troublesome Agrochemicals division was sold the following year to Schering A.G. for £60 million.

These divestments left Fisons with three primary businesses: Pharmaceuticals, Horticulture, and Scientific Equipment. The pharmaceutical group was expanded with the 1980 purchase of Great Britains Charnwood Pharmaceuticals, Australias Orbit Chemical Pty. Ltd. in 1982, and Italys Intersint in 1983. Great Britains Weddel Pharmaceutical was acquired in 1983 and merged with Charnwood, which would specialize in generic drugs.

Fisonss Horticultural operations were expanded geographically through a joint venture with Canadas Western Peat Moss in 1980, and the acquisition of Langley Peat North Ltd. of Alberta in 1983. These purchases gave Fisons access to large peat supplies and the North American market. The British operations were supplanted with the acquisition of Webb and Bees seed operations from Shell Holdings (U.K.) Ltd. in the early 1980s.

The Scientific Equipment division grew through the addition of Watson Victor, a New Zealand distributor of laboratory equipment, in 1982. Haake-Butler Instruments, of which Fisons owned 67 percent, was subsequently founded in the United States. Overall, Kerridges fundamental changes improved Fisonss balance sheet dramatically: the corporation went from making annual interest payments of £13 million in 1980 to having no net borrowings in 1983. Fisons was even secure enough to make a successful stock offer of £28 million that year.

The Pharmaceutical divisions continued heavy research and development expenditures resulted in two new drugs: DSCG-based Opticrom, released in 1984, and Tilade, a new asthma treatment, introduced in 1986. This division acquired Laboratories Caesen, of Spain, in 1984, and Bracco de Mexico in 1986.

Kerridge was made chairman in 1984, and he clarified the strategy he had been using to turn Fisons around: We wish to operate in industries of inherent attractiveness, which have potential for growth and a record of profitability of successful participants, [and] we wish to be in clearly defined business segments where Fisons can reasonably aspire to being an effective competitor by virtue of its size and its financial and managerial resources. The company would no longer operate on the fringes of its chosen markets, as it had in the 1970s. For example, Fisons concentrated on the horticulture and scientific equipment markets, which were not yet consolidated or dominated by a single powerful company; Fisons hoped to be the corporation that would eventually be the leader.

Fisons burst onto the U.S. market for scientific equipment, which was home to 40 percent of the worlds research activity, with the acquisition of Curtin Matheson Scientific Inc. (CMS) in 1984. CMS was the United States second-largest distributor of scientific equipment. Fisons also purchased United Diagnostics Inc. and Pacific Hemostasis Laboratories Inc., which were combined with CMS to give the latter manufacturing capacity. By the beginning of 1985, Fisonss Scientific division was the third-largest organization of its type in the world, and the largest outside the United States.

Fisons continued to grow, acquiring in 1985 Murphy Chemical, which helped widen the Horticulture divisions portfolio of products, extend marketing in Europe and North America, and shore up Fisonss peat supplies. Later in the decade, the Horticulture division would sell its 50 percent share of Asef-Fison B.V. to its joint-venture partner, DSM Agro Specialties B.V. In 1986 Fisons bought Applied Research Laboratories, a leading manufacturer of scientific equipment with global marketing capacity, and two years later it purchased Union Scientific Limited, a Hong Kong company.

Several important acquisitions were also made by the Pharmaceutical division in the late 1980s. Italchimici S.p.A., an Italian firm, and Pennwalt Corporations pharmaceutical division, a U.S. manufacturer of ethical and over-the-counter drugs, were purchased in 1988. A French company, Gerbitol S.A., brought expertise in cardiovascular medicine, antibiotics, and dietary supplements to the division in 1989. In all, with the help of its significant 1980s acquisitions, Fisonss pre-tax profits increased by an average 56 percent per year to £230 million (US$410 million). The corporations market capitalization rose from £40 million in 1980 to £3 billion in 1990.

The 1990 purchase of VG Instruments, a manufacturer of mass spectrometers and surface analysis instruments, more than doubled Fisonss output of analytical instruments and catapulted the Scientific Equipment division to the number three spot in the global marketplace. It looked as if Fisons had launched its second consecutive decade of growth and prosperity. By the end of 1991, however, it was clear that problems in the Pharmaceutical division had dragged the entire company down. Late that year, Fisons revealed that two of its important new drugs, Opticrom for hay fever and Imferon for anemia, had been recalled from the U.S. market after the Food and Drug Administration (FDA) denied approval of the companys British factories. According to a 1992 Economist article, the FDAs routine check of Fisonss U.K. factory revealed warehouses with holes in their outside walls; poor record keeping; and the possibility of rodent, insect or avian activity in the [transport] containers. Fisonss pre-tax profits for 1991 dropped 17 percent to £190 million, and the company faced required investments of more than £25 million to bring its British factory up to U.S. standards.

John Kerridge resigned on health grounds in mid-January of 1992 and was temporarily replaced by Patrick Egan. In April of that year, Egan became chairman and Cedric Scroggs was selected as chief executive officer. The new leaders decided to sharpen Fisonss focus on Pharmaceuticals and scientific equipment by divesting its OTC drug and horticultural businesses.

In November of 1992, Fisons agreed to sell its North American OTC drug operations to Swiss drug concern Ciba-Geigy Ltd. for £92 million (US$60.3 million). This segment represented approximately 50 percent of Fisonss global consumer health division sales and 40 percent of that groups profits. Egan and Scroggs recognized that the British company lacked the resources and marketing influence necessary to compete in the American consumer drug market.

Fisonss new management forged a joint development and marketing agreement with Allergan Inc., a U.S. opthalmic company, early in 1993. The arrangement called for Fisonss 400 U.S. salespeople to co-market Allergans opthalmic drug Acular. The U.S. companys sales force, in turn, would help market Fisonss opthalmic treatment Opticrom. The arrangement presumed that Opticrom would be re-registered by the FDA. By early 1993, Fisons had made significant improvements in its Opticrom factory, but new FDA inspections had still not resulted in approval late in the year.

Fisons suffered yet another setback when it hastily suspended development of an asthma medicine, tipredane. The company had been banking on the new drug to bolster its core respiratory business in the late 1990s. Tipredane had been licensed by Fisons from Bristol-Myers Squibb Co. and was in the midst of unsuccessful clinical trials in more than a dozen countries. The failure of tipredane left Fisons with only one new drug, remacemidean epilepsy treatmentin development.

In May of 1993 Fisons sold its North American horticulture business to a consortium led by Macluan Capital Corp. of Vancouver for US$60 million in cash and used the proceeds to reduce its debt. Fisons also planned to sell the remainder of its Horticulture division as soon as an opportunity arose. In July the company sold its consumer health products business in Australia and New Zealand to Warner-Lambert for about US$23 million. The sale included the Rosken line of therapeutic skin-care products.

Despite Fisonss early 1990s efforts to bolster its pharmaceutical business, some analysts insisted that the company had neither the research and development strength nor the marketing clout necessary to compete in an ethical pharmaceutical business that demanded frequent discovery of innovative medicines. Observers predicted an imminent merger or takeover for Fisons.

Principal Subsidiaries

VG Instruments Group Ltd.; Fisons Pty. Ltd. (Australia); FSE Pty. Ltd. (Australia); Fisons (Bangladesh) Ltd. (51%); Atlantic Chemical corp. Ltd. (Bermuda); Fisons Corp. Ltd. (Canada); Fisons Horticulture Inc. (Canada); Fisons A/S (Denmark); Laboratories Fisons SA (France); SCAD-Fisons SA (France); Fisons Arzneimittel GmbH (Germany); Gebruder Haake GmbH (Germany); VG Instruments GmbH (Germany); Fisons Italchimici S.p.A. (Italy); Carlo Erba Strumentazione S.p.A. (Italy); Fujisawa-Fisons KK (Japan; 65%); Asef BV (Netherlands); Fisons BV (Netherlands); Fisons Pharmaceutical (Pty.) Ltd. (South Africa); Fisons AG (Switzerland); ARL Applied Research Laboratories SA (Switzerland); Fisons Corp. (United States); Applied Research Laboratories Inc. (United States); Curtin Matheson Scientific Inc. (United States); Kevex Instruments Inc (United States); VG Instruments Inc. (United States).

Further Reading

Finlay, Paul N., How Fisons Managed Its Turnaround, European Journal of Marketing, vol. 22, pp. 103117.

Firms Horticulture Business to Be Sold for $60 Million, Wall Street Journal, May 19, 1993, p. All.

Fisons Stock Tumbles as Drug Maker Halts New Medicines Trials, Wall Street Journal, April 7, 1993, p. A10.

Fisons to Sell Some Operations in Canada, U.S. to Ciba-Geigy, Wall Street Journal, November 27, 1992, p. A6.

From a Corner of Suffolk to the Four Corners of the Earth, Ipswich, England: Fisons plc, 1984.

Full Circle, The Economist, January 18, 1992, p. 69.

Moore, Stephen D., U.K.s Fisons and Allergan Link up to Develop, Sell Opthalmic Products, Wall Street Journal, February 5, 1993, p. B3A.

April S. Dougal

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