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Picture this: Giant manufacturers making products for a tiny company. The added twist is that one of the giants used to sell the products for its own account.
The tiny partner in these unusual alliances is 50-employee Medicis Pharmaceutical Corp., located in mid-Manhattan. Its giant partners are London-based SmithKline Beecham PLC, with annual revenue of $10 billion, and Schein Pharmaceutical, based in Roslyn, N.Y., with annual revenue of approximately $500 million.
Medicis is benefiting from the trend among the giants to concentrate on "core" products and services, those deemed essential to their growth and survival. Non-core product lines are typically sold off to other giants, but in many cases the low-volume castoffs of big corporations are acquired by mid-sized or small companies.
According to Quintus Von Bonin, an acquisition specialist with Salomon Brothers, these unloved divisions suffered because they were "out of sight, out of mind." Because the management of the small company concentrates on these neglected products, they blossom.
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That's just what's happening to the Esoterica line...