The Wellcome Foundation Ltd.

Updated About encyclopedia.com content Print Article Share Article
views updated

The Wellcome Foundation Ltd.

P.O. Box 129
The Wellcome Building
183 Huston Road
London NW1 2BP
England
(01) 387 4477

Wholly-owned by the Wellcome Trust
Incorporated: 1924
Employees: 18,342
Sales: £998 million (US$1.467 billion)

Wherever the British Lion goes, there goes the Unicorn which represents Burroughs Wellcome & Co. You will always find the two together, whether it is in the heart of darkest Africa or at either of the two Poles. Just as the unicorn assured good health in the days of old, so it is today. Wherever that horn is seen, whether fighting a common cold or a deadly disease, there is the most up-to-date medical formulation that can be prepared. Wellcome plc continues to offer a progressive line of research and medicine to the whole world.

In 1879 Silas M. Burroughs offered Henry S. Wellcome partnership in a growing pharmaceutical company. Both Burroughs and Wellcome had graduated from the Philadelphia College of Pharmacy. Burroughs had gone to London to represent John Wyeth & Bro. and had then created his own business. Wellcome became a travelling representative for McKesson & Robbins, Americas largest drug house. Wellcome sailed for Britain in 1880 and accepted Burroughss offer, bringing with him the exclusive rights to sell McKesson & Robbins preparations outside the American continent. Burroughs Wellcome & Co. was created on 27 September 1880 with a deed of partnership naming Wellcome as a junior partner. Burroughs initial investment was £1200, Wellcomes £800.

Burroughs had always been a man of action. He was also a kind man, often thinking of his employees, offering them the best possible environment to work in. His factories provided well-lit, open working areas; factory grounds more closely resembled parks than manufacturing sites. Wellcome, however, was a rational man interested in details. His organizational skill and ability to remain calm complemented Burroughss personality very well.

The strong character of each man could be seen in their early attempts to establish the company on firm ground. Burroughs showed his more expansive nature by carrying representative product samples throughout the world. Beginning in Spain and Portugal, he traversed the Mediterranean countries through Turkey and Egypt to India, Australia, New Zealand, and the United States. Wellcome balanced this restlessness with his sure organization and development of the business in Britain. The headquarters were set up in Snow Hill, London in 1883. The primary business of the new company was to represent novel powders and pills of American companies (including John Wyeth & Bro. and McKesson & Robbins). In 1982, Burroughs Wellcome & Co. began manufacturing their own products.

In choosing a manufacturing site, the two partners encountered their first clash of interests. While Burroughs had been travelling for two years, Wellcome had become more and more frustrated by the stamp duty placed on products imported from America. This duty spoiled the excellent business opportunity Britains efficient shipping offered. It took some convincing to make Burroughs see the logic behind manufacturing in Britain. Burroughs was finally persuaded, however, and in 1883 their first factory was acquired on the Thames at Wandsworth.

The high standard of quality, precise and innovative formulation, and thoughtful promotion offered Burroughs Wellcome & Co. assured success. Refined ingredients together with highly accurate machinery yielded compressed products ranging from one thousandth of one grain to over sixty grains in dosage. Many trademarks were registered in this initial phase, the most important being the Tabloid, conceived by Wellcome in 1884. Numerous awards of excellence were acquired at trade shows and scientific exhibitions. Wellcome profited from the excellent publicity these awards brought. He also took advantage of publicity gained through medical chests supplied to notable people, e.g., the explorer Henry M. Stanley. Wellcome was the first man to offer pharmaceutical training with his products.

Success loomed, but due to personal differences the partnership was never stable. In the same year they opened their first Associated House in Australia (1886), Wellcomes health deteriorated and he spent a year recuperating in the USA. When he returned in 1887, Burroughs demanded that the partnership be dissolved due to the neglect Wellcome had shown. Burroughs had always been a highly emotional partner, often making accusations he would later regret, and Wellcome refused to allow the company to be split, successfully defending his rights in a law suit. Despite these difficulties a larger factory site was opened in 1889 at the old Phoenix Mills in Dartford, Kent. This factory was renamed the Wellcome Chemical Works. The site is still the major production center of the Group. In 1894 Wellcome established the Physiological Research Laboratories (WPRL). In less than one year the lab had produced an anti-diptheria serum.

In 1895 a decisive event occurred affecting the direction that Burroughs Wellcome & Co. would follow. Just as negotiations to dissolve the partnership had begun, Burroughs died, and although Mrs. Burroughs attempted to gain some control of the company, Wellcome took over. He continued to run the company alone for another thirty years. In the early 1900s, a great expansion occurred. Between 1900 and 1904 Wellcome fought to regain control of the Tabloid trademark from competitors through legal action. New associated houses were opened in South Africa (1902), Italy (1905), Canada (1906), the U.S. (1906), China (1908), Argentina (1910), and India (1912). Sales rose from £218,625 to £323,772 at home and from £71,711 to £136,846 overseas between 1904 and 1915.

While sales increased, so did the companys research. The Wellcome Chemical Research Laboratories (WCRL) was opened in Snow Hill in 1896. The director, Dr. Frederick B. Power, had befriended Wellcome at Philadelphia College. In 1901 WPRL became the first private institution in Britain to be allowed legally to experiment on live animals. Wellcome helped establish the Tropical Research Laboratories at Gordon Memorial College in Khartoum in 1903. The Wellcome Bureau of Scientific Research (WBSR) established in 1913, assumed control over all of Wellcomes research laboratories. Also in 1913, Wellcome opened the Wellcome Historical Medical Museum with a collection that had been created over some ten years.

With the start of World War I, Wellcome offered the control of the company to the government. Vaccines and sera, especially the gas-gangrene and the tetanus antitoxin sera, were developed and produced by the WPRL. The WBSR became a source for knowledge of tropical infections and treatments. Drugs and chemicals that had formerly been produced in Germany were developed by the WCRL. Wellcome even helped the government with aid in transportation and laboratories. The war brought business to £440,064 at home and £326,901 abroad.

The 1920s brought few changes to the company. No new foreign houses were established, though two depots were set up in the Dutch East Indies (1920) and Sweden (1921). In 1920 the Wellcome Entomological Field Laboratory was established. Finally, the Dartford plant began producing insulin in 1923 and was modernized.

The initial expansion that marked the beginning of Burroughs Wellcome & Co. had ended. The company had come upon a time of consolidation. Wellcome, no longer interested in the chore of controlling his commercial enterprises, united the nine Burroughs Wellcome associated houses, the research institutions, and the museums into one private company, the Wellcome Foundation Ltd., in 1924 with £1 million. Making himself the governing director, he left most of the daily decisions to his general manager, George E. Pearson. Wellcome devoted more and more time and profits to the Historical Medical Museum, only entering affairs of business when a figurehead was necessary. As more money and time went to the museum, less innovation and expansion occurred. The company began to stagnate.

Wellcomes final act of consolidation was the Wellcome Research Institution, finished in 1932. The cost was £250,000. Originally housing the Wellcome collection and some laboratories, the building in Euston Road is now the Wellcome building, headquarters of the group since enemy action destroyed the Snow Hill building in 1941.

In 1933, in the midst of the worldwide depression, Wellcome personally planned an exhibit for the Century of Progress Chicago Fair. In the best space in the Hall of Science, 24 displays were set up illustrating the history of the company. This proved to be the highlight of the companys next few years.

In 1936, Sir Henry S. Wellcome died. In order to be sure that the company would maintain the ideals he had established, Wellcome left a will dividing the shares of the Wellcome Foundation among five trustees: G. Hudson Lyall, Sir Henry Dale, Professor T.R. Elliott, L.C. Bullock, and Martin Price. These Trustees, along with a board of directors, were to continue the activities of the Foundation, directing all profits to charitable purposes, research in medicine and those sciences pertaining to it, and maintenance of museums dedicated to this research and the history of medicine. The will also made provisions for the employees welfare fund and yearly payments to designated persons. Finally he made provisions for a library, sports field, and gymnasium to be built attached to a school in Garden City, Minnesota, Wellcomes home town, in memory of his parents.

Overall, Wellcome left a company in poor shape. Provision for his death duties was inadequate, and the company had failed to fund research and development. What research continued did not always have cogent objectives. Only the United States and Australian houses offered any kind of useful income. The Wellcome Foundation had sunk to a state of disunity and apathy.

In 1940 George Pearson was replaced by T.R.G. Bennett. Bennett realized the need to unify the Foundation, but could not succeed with the plans he tried because of the wartime restrictions on capital. By 1948, the company had sunk to its lowest point. An accountant, H.E. Sier, was named as a new Chairman, and two managing directors, C. Gordon Oakes and Denis E. Wheeler, were appointed. In 1953, Michael Perrin assumed the retiring Siers position as Chairman. By that time, the crisis had ended.

The 1950s brought a spirit of revitalization to Wellcome. The Board of Directors developed a long-term plan to increase revenue, improve the range of the companys products, and expand the market for these new products. The company first and foremost needed capital to work with. Crucial initial capital was gained through the sale of the Empirin range of analgesics through the United States company. The Board then attempted to improve the marketing of the existing line of products, and sales between 1949 and 1952 increased by 75 per cent.

The Boards second change dealt with Wellcomes outdated product range. The company had fallen behind in competitive research, completely ignoring the growing field of chemotherapy. Corrective action was taken by both Dr. Kellaway at the end of the 1940s and Dr. Adamson, the new Research Director appointed in 1953. A variety of synthetic drugs and medical and veterinary vaccines was developed. These were commercially successful. Septrin, an antibacterial treatment, and Zyloric, an anti-gout preparation, were especially important in the 1960s. Government intervention in drug testing in the 1970s eventually slowed the growing product line. However, combinations of drugs proved to be successful. Actifed, of major importance commercially, was developed as a combination of Actidil, an antihistamine, and other market drugs.

Now an expansive market was needed to absorb the new capital and the extensive, more balanced, product line. New associated houses were opened in New Zealand (1954), Brazil (1955), Kenya (1955), and Pakistan (1956). In 1959 Cooper McDougall & Robertson Ltd. was acquired. This not only opened up a greater number of trading posts throughout the world but also added animal health products to the Foundations range of medicine. Calmic Ltd. and its overseas connections were acquired in 1967. This British-based company offered consumer and medical products as well as a hygiene service. Hadleigh-Crowther, a manufacturer of dairy hygienic products, was purchased in 1969, Macdonald Taylor, specialising in surgical dressings, in 1971, and Jensen Salsbery, another animal health laboratory, in 1979.

Further expansion into Europe was achieved by the acquisition of seven companies in the 1960s and four more in the 1970s. Other companies were established near the Mediterranean and in Asia at this time as well. In these new territories the company would work through local agents until enough merchandise was being sold to warrant Well-comes creating a company.

Much of the growth of the company was due to the energetic leadership coming from the enthusiastic Board. Sir Michael Perrin attempted to unify company activity in order to keep one main objective. In 1967 three new deputy chairmen were brought in: Denis Wheeler centralized group activities, such as research or development. Dr. Fred Wrigley, the new Chairman of Calmic, was crucial to the expansion in Europe, and A. A. Gray became responsible for veterinary medicine and Chairman of Cooper McDougall & Robertson. With Grays promotion to Chairman of Wellcome in 1971, a more diversified regional network was incorporated into the management hierarchy. AJ. Shepperd, Grays successor and the current Chairman, attempted to strengthen Wellcomes export markets by creating a new export division.

The final procedure Wellcome had to endure was a modernization of its structure. An increasing demand for upper management to organize and centralize the various companies called for increased activity in hiring and updated training. Dartford was a site built over 50 years before the expansion of the world market occurred. Almost half of the buildings were either demolished or reassigned for other duties in order to make room for modern facilities. Rebuilding, extending, and reallocating buildings went ahead at many sites in Europe, Africa, and Asia. Most of the United States company moved from New York to two sites in North Carolina.

Of all the people who braved this transition period, it was the shareholders who endured the hardest times. Seventy per cent of the net profit was reinvested into the company between 1950 and 1980. Their patience paid off when the business boomed.

Today Wellcome is struggling with the formidable disease Aids. Once again Wellcome is attempting to tackle current medical problems.

Further Reading

The Wellcome Research Institution and the Affiliated Research Laboratories and Museums, London, Wellcome Foundation, 1933; Physic and Philanthropy: A History of The Wellcome Trust 1936-1986 by A. Rupert Hall and B.A. Bembridge, London, Cambridge University Press, 1986.