CORPORATIONS: Wonder Drugs’ Wonder

CORPORATIONS Wonder Drugs’ Wonder In the new world of antibiotic wonder drugs, one of the wonders is the growth of the industry itself. In only eight years, it has become a $250-million-a-year business supplying drugs for half of all doctors’ prescriptions. Among the industry’s 15 companies, none has grown faster than Brooklyn’s Chas. Pfizer & Co., world’s largest maker of antibiotics. Pfizer is well aware that it is in a fast-moving, chance-taking business where discoveries, not only of new drugs but of new ways to cut costs and prices, come fast. “In our industry,” says President John E. McKeen, “we live in the shadow of obsolescence.”

This week McKeen showed just what he meant. As a result of a plant expansion that will double production, Pfizer sliced the price on terramycin, its biggest seller, from 15% to 40%. The cut was bound to shake down prices of terramycin’s two great competitors, Lederle’s aureomycin and Parke, Davis’ chloromycetin.

Spirit of ’76. Like many another drug producer, Pfizer has been completely transformed by antibiotics. The 102-year-old company, founded by German immigrants, was a small but successful chemical producer specializing in making citric acid by fermentation. When, in 1941, the Government asked Pfizer, Merck & Co., and E. R. Squibb to try to mass-produce penicillin, Pfizer was right at home; penicillin could be made only by fermentation. But the process was slow because the mold, which needs air to exist, was being grown only on the surface of a chemical broth at the recovery rate of one unit to 1,000,000 units of broth. Says McKeen: “It was just about the amount of gold you find in sea water.” Pfizer worked out a method to grow the penicillin all through the broth by shooting in oxygen, got such a big jump on the other companies that it was the biggest wartime producer. By war’s end, all other drug companies had adopted the Pfizer method.

When streptomycin was found in a shovelful of New Jersey dirt (TIME, Jan. 29, 1945), Pfizer added it to its line, while continuing a search for an antibiotic of its own. Since no one ever knows where a new antibiotic will be turned up (the purest penicillin strain was discovered growing on a melon in Peoria), Pfizer began to check the molds in 100,000 different samples of soil, gathered from all over the world. The job, says McKeen, was to find “the compounds that God has put in the earth for centuries.” After uncovering 75 possible antibiotics, none of which did the trick, Pfizer chemists came across terramycin in dirt from Indiana, promptly dubbed it the “Spirit of ’76.” A “broad band” antibiotic, terramycin attacks 55 diseases.

Life in Spoonfuls. Since terramycin was put on the market in March 1950, Pfizer stock has risen from 62 to 120, was later split 3 for 1. Pfizer sales this year are already running at the rate of $100 million (v. $60 million last year) and earnings at the rate of $2.94 a share.

The man at the head of Pfizer’s alert research and new mass-production methods is President John McKeen, 47, a restless, sharp-eyed chemical engineer who has needed no encouragement to expand. McKeen, Manhattan-born, has been with Pfizer ever since he graduated from Brooklyn Polytechnic Institute in 1926. He became production boss in 1948, was elected president in 1949 and later added the title of board chairman. He was sold on antibiotics from the start, recalls “taking spoonfuls to Brooklyn hospitals and watching it bring dying people back to life.” For its fast-growing production, Pfizer has also found a market selling antibiotics as a growth stimulant in animal feeds. It has hopes for a new antibiotic, viomycin, as a possible cure for tuberculosis. No conclusions about its effectiveness can be drawn as yet, says McKeen, but the tests are still going on.