MADISON, N.J. — American Home Products has solved its identity crisis.
After selling well-known food businesses, four medical device companies and its agricultural products division to focus on prescription drugs and consumer health care, AHP found its name, still little known, just didn't fit.
So, as of Monday, the company is swapping its moniker of the past 76 years for one much older: Wyeth.
It's a name familiar mostly to doctors, for AHP's huge Wyeth-Ayerst pharmaceuticals division and for one of the oldest U.S. prescription medicine businesses, John Wyeth & Brother, founded in 1860 and bought by American Home in 1931.
"The company appears to be returning to its roots," said Mike Krensavage, a drug-industry analyst at Raymond James & Associates. It's "come a long way from selling canned meatballs."
Robert Essner, 54, who became president and chief executive last May, sees the name change as the final step in a decade-long metamorphosis.
"So much has changed that American Home isn't the right name for us anymore," he said last week in an interview at the company's sprawling, tree-dotted Madison campus.
Essner, who previously headed the company's domestic, and then global pharmaceutical business, is hardly exaggerating the changes.
Nine prescription drug launches since mid-1999 have boosted AHP from a second-tier player to the No. 7 pharmaceutical company, based on U.S. sales, with no short-term threat from generic competition, unlike many big drug makers.
Sales of prescription drugs from its Wyeth-Ayerst Laboratories and other units have climbed from 50 percent of all revenue a decade ago to about 80 percent. Remaining sales are from veterinary medicines and consumer health products, from Advil and Anacin to Chap Stick, Preparation H and Robitussin.
AHP finally has blockbuster drugs: Premarin, a hormone replacement for postmenopausal women, has become its first $2 billion-a-year drug; after 60 years on the market, it remains the most prescribed drug for American women. Essner predicts that Effexor, for depression and anxiety, also will be pulling in $2 billion by year's end.
Analysts and company officials now expect steadily rising revenues and profits after years of huge charges against earnings to cover litigation and settlements for class-action lawsuits. Those involved the withdrawn diet drugs Redux and Pondimin, a rotavirus vaccine and the implantable birth control device Norplant.
Essner predicted revenues will jump from about $14 billion last year to $20 billion in 2004. Girish Tyagi, pharmaceutical analyst at ABN Amro, called that a bit optimistic; he expects $18.3 billion.
The company's growing research and development budget, set at $2 billion this year, has helped expand its products and pipeline to make it one of the top developers and manufacturers of vaccines and medicines derived from biotechnology, including the popular pneumococcal vaccine Prevnar, two clotting drugs for hemophilia called ReFacto and Benefix, and Enbrel, the arthritis drug for which it shares revenues with Immunex.
"We'd be one of the top three biotech companies in the world" if that part of AHP was independent, Essner said. He thinks the company is "unique" in having strong research teams and products in vaccines, traditional chemical-based medications and drugs developed through biotechnology techniques.
"That's a good point," Krensavage said. "The company does appear to have good balance."
After acquiring a couple small drug and biotech companies, then being publicly jilted before expected mega-mergers in the late 1990s, Essner, who holds a master's degree in history, said he prefers a future that's independent.
"Growth comes from innovation (and) the talent of your people, backed up by investment," he said.
About five dozen research projects are in the works, a nasal spray flu vaccine could be launched this fall and the company this year plans to build two new production facilities and what Essner says might be the world's biggest biotechnology research facility, in Grange Castle, Ireland.
It's a far cry from AHP's days hawking Chef Boyardee canned pasta, Jiffy Pop popcorn, Gulden's mustard and PAM nonstick cooking spray.
Still, Tyagi notes AHP has far more debt than other drug companies, mainly because of all the lawsuits it's faced. When its biotech partner Immunex merges with Amgen later this year, he thinks AHP might sell its interest to help pay down debt.
"For a company not to have (major) cardiac drugs, I think, is a negative," Tyagi added.