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Zantac's marketing strategy enlarged the size of the H2-blocker market, and Glaxo kept a healthy portion for itself.
Zantac, an acid inhibitor developed by Glaxo, has become the best-selling drug in history as a result of a shrewd, multifaceted marketing strategy that has enabled the product to dominate the acid/peptic marketplace. Glaxo has come a long way from its founding in New Zealand in 1906 by Joseph Nathan, the company's sole owner for many years. Today, Glaxo is part of the world's largest pharmaceutical conglomerate, due in large part to Zantac's success.
Glaxo was incorporated in 1935 and was involved principally in the production of powdered milk for babies. The marketing slogan at that time was "Glaxo The Supermilk: It Builds Bonnie Babies." In the late 1930s, the company began to sell vegetable extracts, powders, and syrups. Scientific researchers in the early 1940s developed chemicals that would change medical treatment. Glaxo obtained a license to manufacture penicillin and cortisone, two of the most significant developments. It became a public company in 1947, and over the next 10 years grew by 300% in sales volume.
In 1958, Glaxo bought Allen & Hanburys Ltd., a British pharmaceutical firm originally established by Quakers in 1715. Subsequently, Glaxo bought five small companies that manufactured vaccines, vitamins, veterinary products, weed killers, insecticides, and fertilizer.
The company had no clear-cut company strategy or long-term plan until after it developed its first true pharmaceutical, a dermatological product called betnovate, in 1963. Soon after, Glaxo's Ware Research Unit (formerly part of Allen & Hanburys) started to gain a focus, developing Ventolin (albuterol), Trandate (labetalol), Zinacef (cefuroxime), and Zantac (ranitidine). A company strategy began to take shape as well; the corporation decided to market pharmaceuticals throughout Europe, though decided against marketing in Japan or the United States.
Under the direction of Sir Paul Girolami in 1972, the U.K. pharmaceutical firm Beecham (now Smith-Kline Beecham) placed a bid to buy Glaxo, largely as a defense against takeover bids. This led to the formation of Glaxo Holdings Ltd. Through innovative research, Glaxo developed major products in six of the 10 largest pharmaceutical classes. In 1983, it ranked in the top 20 pharmaceutical firms in dollar sales.
Growing the U.S. Market
In the late 1970s, the...