Financial History Issue 113 (Spring 2015) | Page 36

© Corbis A penicillin manufacturer at the Charles Pfizer factory tests cultures. During World War I, he shepherded the acquisition of an antiseptic agent and the development of substitutes for important pain killers and sedatives previously available only from German manufacturers. In 1921, the company established a research laboratory; throughout the 1920s, it commercialized a variety of anesthetics, tranquilizers and sedatives. The company’s need for additional funds to fuel its growth coincided with the robust economic and stock market conditions that prevailed in early 1929. That March, the company sold 20,000 shares to the public and became listed on the Chicago Stock Exchange. Pfizer Inc. Pfizer was initially founded as a manufacturer of fine chemicals. In 1849, Charles Pfizer borrowed $2,500 to establish the firm in Brooklyn, New York, and for the next 50 years it produced a variety of antiparasitics, pain killers and disinfectants. It also manufactured a range of pharmaceutical ingredients, such as citric acid, camphor and iodine. In 1900, the company filed a certificate of incorporation and issued 20,000 shares to family members and employees. Pfizer continued developing useful products and production methods for the next several decades. By 1942, the company was in a good position to use its knowledge of fermentation technology to answer a government appeal to manufacture penicillin. Senior management invested millions of dollars in the project, including funds raised by selling stock to the public. It took just four months to begin producing mass quantities of the miracle drug. Johnson & Johnson In 1886, brothers Robert and James founded Johnson & Johnson to begin producing surgical dressings that built on Joseph Lister’s discovery that airborne germs were a source of infection in hospital operating rooms. During the next few decades, the company introduced improved and sterilized versions of medicinal adhesives, absorbent wound dressings and catgut sutures. During the 1920s, the second generation family management led the development of Band-Aid bandages, baby care products, absorbent sanitary napkins and a variety of surgical packs and gowns. 34    FINANCIAL HISTORY  |  Spring 2015  | The family-owned firm became a public company in 1944, as management added the public to the audiences to which they believed they had a social responsibility; the three others were customers, employees and the communities in which the company operated. Eli Lilly Eli Lilly was a Civil War surgeon from Indianapolis who formed a company to manufacture drug products in 1876. Like many others, the company used plants as the raw materials for fluid extracts, elixirs and syrups. Unlike others, it also developed innovative gelatin-coated capsules in many shapes and sizes. The company began distinguishing itself from other patent medicine makers early in the 20th century, when the founder’s grandson (also named Eli Lilly) combined his interest in machinery with his degree from the Philadelphia College of Pharmacy to enhance the quality of its production efforts. Lilly’s grandson also supervised one of the earliest interactions between a drug company and an academic institution. In 1921, researchers at the University of