Pfizer is undoubtedly one of the biggest names in the pharmaceutical industry. This American conglomerate, based in New York is now 169 years old, worth 172 billion dollars and employs 96.500 people in more than 90 countries all over the world. It stands behind some of the best-sold medicines in history including Lipitor, Diflucan, Azithromycin and Viagra. Currently headed by Ian Read, a seasoned Scottish businessman and an expert in the pharmaceutical industry, Pfizer achieved revenue of 52.55 billion dollars in 2017 alone and is sure to expand its business as it has been doing ever since the earliest 20th century.
But, this conglomerate had rather modest beginnings. Here, we will take a look at the brief history of the world’s second-largest pharmaceutical company.
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The beginnings of Pfizer in 1849
Almost 170 years ago, in 1849, Charles Pfizer, a young immigrant from Germany borrowed 2.500$ from his father in order to start a business together with his cousin, Charles Erhart. This is how Charles Pfizer & Company was born in an unpretentious red-brick building in the Williamsburg section of Brooklyn, New York that will serve as company’s headquarters for the next 20 years.
In minds of Charles Pfizer and Charles Erhart, the company they found would go on to become a successful fine-chemicals business and it’s unlikely they have assumed that the company would go on to become the giant of the industry that it is today.
The first product manufactured at Pfizer was santonin – a known remedy commonly used to treat intestinal worms and other intestinal parasites in the 19th century America. However, the cousins made a twist. With Charles Pfizer’s expertise in chemistry and Erhart’s expertise in confectionery, the pair produced almond-toffee flavouring and successfully blended it with santonin, without reducing the effectiveness of the later. Santonin in this new for was an instant success that helped the company “get on its feet”.
Pfizer in the Civil War
By 1862, tartaric acid and cream of tartar, vital for both food and chemistry industry in the US at the time were perfected and mass production has begun. At the same time, the outbreak of the American Civil War in 1861 brought on an increased demand for painkillers and disinfectants – a chance that was grabbed by Pfizer. Tartaric acid and related products used for the manufacture of skin coolants, diuretics and cleansing agents were complemented by other vital drugs such as iodine, morphine, chloroform, camphor and mercurial in order to satisfy ever-growing needs of the Union army. At the same time, these chemicals were also utilized by the pioneers of photography who tried to document the events and horrors of the Civil War. By the end of the war, Pfizer’s revenues doubled, paving the path for the further expansion of the company.
Relocation of Pfizer headquarters and expansion (1865-1891)
With the increased revenues, Pfizer was ready for increasing both the product line and the number of employees. And the old building complex just couldn’t support the growth of the company, so the headquarters were moved to 81 Maiden Lane in Manhattan in 1868 and remained there for almost a whole century!
By 1880 Pfizer became a leader in the production of citric acid through the process of extraction from concentrates of lemon and lime – a technique that will be abandoned later on, in favour of the more advanced approach. But, at the time, this was the cutting edge process that played a crucial role in the manufacturing of drinks such as Coca-Cola, Dr Pepper and Pepsi. With this collaboration, Pfizer made citric acid its main product and used the ever-growing revenues for further expansion.
By 1882 the company was ready to expand to the west with the new warehouse in Chicago, Illinois. Access to new markets quickly skyrocketed Pfizer’s revenue, clearly foreshadowing its future success.
Death of Charles Erhart in 1891
When one of the partners, Charles Erhart, died in 1891, he left a partnership with Pfizer to his son William. At the time, this partnership was worth around 250.000$. However, an earlier agreement between the cousins allowed Charles Pfizer to buy out William Erhart’s share at just a half of its inventory value. This allowed Pfizer to take full control over the company. Charles Pfizer held almost complete control over the further development of the company and its business model from this point until his death in 1906, despite the brief period of formal collaboration with his youngest son, Emile Pfizer in 1905 and early 1906.
The 50th anniversary of Pfizer
In 1899 Pfizer celebrated its 50th anniversary with Charles Pfizer giving its now iconic speech that served as a core model for countless business all across the world up to this day. By this time, Pfizer became a leader in the manufacture of industrial and pharmacological products and also a large exporter meaning that it now had access to markets outside of the US. Noticing the success of his company, Charles Pfizer said:
“Our goal has been and continues to be the same: to find a way to produce the highest-quality products and to perfect the most efficient way to accomplish this, in order to serve our customers. This company has built itself on its reputation and its dedication to these standards, and if we are to celebrate another 50 years, we must always be aware that quality is the keystone.”
Pfizer in the first half of 20th century
In 1900, at the turn of the century, Pfizer filed an official certificate of incorporation in the state of New Jersey. At the time, the authorized capital of 2 million dollars was divided into shares of 100$. However, at that time, it didn’t change the business model or the functioning of the company in any significant way.
In 1905, at a special board meeting, Charles Pfizer’s son, Emile was appointed the president of the company. Emile Pfizer will hold this position for roughly 35 years. A year later, in 1906, Charles Pfizer, aged 82, died at his estate in Rhode Island, leaving all executive power in Emile’s hands, not living long enough to see the sales exceeding 3 million dollars the same year.
The beginning of World War 1 in 1914 brought on a shortage of calcium citrate, a crucial compound needed for the manufacturing of citric acid. This is why Pfizer had to look for alternative solutions. The chemist employed at the company discovered a type of fungus that ferments sugar to citric acid. The process wasn’t perfected in time to make a change to the war-caused shortages, but from 1919 onward, it became the cutting edge approach to citric acid production.
Mid-20th century years
In 1941, Emile Pfizer left the presidential position in order to work at the company as a chairman. However, he left this position before the end of the year, thus ending his long career. After his departure, no members of the Pfizer family were involved in the company’s affairs to this day.
A year later, on 22nd of June 1942, 240.000 shares of the common stock were offered to the public which marked the transition from privately held to a public company, as it remains to this day.
By 1950 the experts in chemistry employed by Pfizer discovered Terramycin (oxytetracycline) which marked a huge shift in the work of the company. Not only did the new medicine significantly boost the profits, but it also emphasized the importance of research and development. Noticing this, the executives of the company decided to invest in brand new R&D facilities and make Pfizer a research-oriented pharmaceutical giant which it remained to this day.
The 1950s expansion
By this time, Pfizer spread to numerous other countries, including:
- Belgium
- Brazil
- Canada
- Cuba
- Mexico
- Panama
- Puerto Rico
- United Kingdom
By early 1960, the company has also made new R&D facilities in Groton, Connecticut.
The research era (1980-1990s)
The last two decades of the 20th century were marked by an increase in the discovery and research into new medication. We can say this era started in 1980 when Pfizer launched Feldene (piroxicam), an anti-inflammatory medication which was Pfizer’s first product to hit 1 billion $ in total sales. This success was followed by:
- Zoloft
- Lipitor
- Norvasc
- Zithromax
- Aricept
- Diflucan
- Viagra
The discovery of Viagra
The discovery of sildenafil, active ingredient of Viagra in 1996 in the town of Sandwich, Kent is probably what made Pfizer famous in the contemporary pop culture. Branded as Viagra, sildenafil went on to become Pfizer’s undoubtedly most popular product to date.
Sildenafil (originally, compound UK/92,480) was discovered, Ian Osterloh and was tested in Morriston Hospital in Swansea, Wales. Originally, the substance was designed to treat angina pectoris, hypertension and blood clots. One could say that those first tests weren’t too successful in those terms – however, they did produce an unexpected side effect, a side effect that gave Pfizer its most recognizable product and that changed ED treatment forever.
Viagra was patented in 1996 and approved for use by the EMA and FDA in 1998. And as the saying goes – the rest is history.
History of Pfizer mergers
Throughout its history, Pfizer grew by mergers with other giants of the industry, with some of the most famous including:1
- Warner-Lambert acquisition
- Pharmacia acquisition
- Wyeth acquisition
- King Pharmaceuticals acquisition
- Zoetis
- Hospira
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