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Executive Summary

SMITHKLINE BEECHAM U.S. DRUG BUSINESS TO BE HEADED BY JEAN-PIERRE GARNIER, a seven-year veteran of Schering Lab's U.S. drug business. Garnier, 43, was affiliated with Schering-Plough for 15 years overall, with the first half of his experience in non-U.S. markets. He joined Schering's U.S. operations in 1983 and assumed the top spot in the domestic presciption pharmaceutical business in 1988. Under Garnier's direction, Schering Labs sales increased 18% in 1989 to $1.38 bil. At SKB, Garnier will be heading a similar-sized operation in terms of annual sales. SKB's U.S. drug sales are in the $1.5 bil. range annually. The product mix at the two companies has little overlap. Garnier will be in charge of a business with heavy concentrations in antibiotics and gastrointestinal drugs. Schering has relatively small operations in those segments in the U.S. Garnier, raised and educated in France, is one of three new execs being brought into the SKB drug business by Jan Leschly, the former Squibb president who became chairman of SKB Pharmaceuticals in June of this year. The new SKB managers have a broad cross-cultural and international experience, mirroring Leschly's Danish/U.S. background and the new company's London/Philadelphia dual orientation. Garnier will report to Frederick Kyle, who has been filling the position of U.S. president on a temporary basis since the departure of John Chappell earlier this year. Kyle holds the title of president-commercial operations for SKB's worldwide pharmaceutical business. Two of the new outside hires come to SKB from Leschly's previous company. Ignace Goethals joins SKB as senior VP-business development from VP-strategic analysis at Bristol-Myers Squibb. Senior VP-Strategic Product Development James Hill previously held a strategic product planning position with Squibb relating to that company's core cardiovascular business. Goethals is Belgian and Hill is British. Two other SKB execs with international backgrounds get new titles as part of the management changes: 24-year Beecham veteran Michael James assumes the position of senior VP-finance of worldwide pharmaceuticals; 26-year SmithKline veteran William Packer takes the title of senior VP of biologicals and strategic projects. Garnier was lured away from Schering by the prospect of a newly fashioned business at SKB and an apparent rebound situation. The company has weathered the first year of a simultaneous downsizing and consolidation program. The year was made less difficult by the success of Beecham's antibiotics with the increased marketing support of both organizations. Augmentin sales, for example, were up 54% and 32% worldwide in the first and second quarters of this year. One problem Garnier will not face that has plagued his recent predecessors is the uncertain future of the $200 mil.-plus Dyazide franchise. The company made that a moot issue by agreeing to contract manufacture the product for Rugby as a generic beginning Oct. 1 ("The Pink Sheet," Aug. 27, p. 3). With that decision announced prior to his affiliation with SKB, Garnier cannot be held responsible for a decline in Dyazide's fortunes. SKB continues to wait for a potential entry into the NSAID class. SKB has been predicting an FDA action on the Beecham filing for Relifex (nabumetone) for this year. The latecomer will present an interesting challenge for the U.S. sales forces. One of the shining stars in the short-term pipeline is Aropax (paroxetine), filed with FDA on Nov. 21, 1989.

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