Financial History Issue 113 (Spring 2015) - Page 36
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 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 | www.MoAF.org
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
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