Warner-Lambert CEO to Retire, de Vink Named Successor (Update4)
Bloomberg News
February 1, 1999, 2:14 p.m. ET
Warner-Lambert CEO to Retire, de Vink Named Successor (Update4)
(Adds comment from de Vink in 4th, 7th, 12th paragraphs.)
Morris Plains, New Jersey, Feb. 1 (Bloomberg) -- Warner-
Lambert Co., one of the world's most profitable drugmakers, said
its chief executive and chairman, Melvin Goodes, will retire May
1, and Lodewijk de Vink will succeed him.
De Vink, 53, now Warner-Lambert's president and chief
operating officer, had been expected to succeed Goodes, 63, who
is retiring a year earlier than required. The two executives
changed Warner-Lambert into one of the most successful U.S.
drugmakers, defying predictions that it might shed its
pharmaceutical business after a federal crackdown on its
manufacturing practices in the early 1990s.
Warner-Lambert's prospects changed in 1997 when it
introduced two new drugs, cholesterol-reducing Lipitor and
Rezulin for diabetes. Now, de Vink said he intends to look for
new drugs to follow up on those successes.
''They made investments in two products and they paid off,''
said James Flynn, an analyst with ING Baring Furman Selz, who has
a ''strong buy'' on Warner-Lambert. ''I don't expect any drastic
changes'' with de Vink as chief executive.
Warner-Lambert, based in Morris Plains, New Jersey, rose 1
1/8 to 73 7/16.
Unlike rivals such as Pfizer Inc., Warner-Lambert doesn't
intend to shed its other units to focus on highly profitable
pharmaceuticals, de Vink said. Instead, it will try to boost
sales of its consumer-goods business, which include Trident gum
and Listerine mouthwash.
History
''It wasn't that long ago that we were asked to get rid our
pharmaceutical business,'' de Vink said in an interview. ''That
history tells us something.''
Warner-Lambert's fourth-quarter profit rose 45 percent to
$341 million as Lipitor sales rose 73 percent to $705 million.
Sales of Rezulin, licensed from Japan's Sankyo Co., rose 14
percent to $203 million even with concerns about the drug's
potential for rare, although serious, side effects.
Under Goodes, who became chief executive in 1991, the market
capitalization of Warner-Lambert rose to almost $60 billion from
about $9 billion.
Working with Goodes, de Vink helped Warner-Lambert land
Pfizer as a marketing partner for Lipitor, said Jami Rubin, an
analyst with Schroder & Co. Considered one of the best marketers
among drugmakers, Pfizer helped Warner-Lambert take the lead in a
cholesterol market where two of the world's biggest
pharmaceutical companies, Merck & Co. and Bristol-Myers Squibb
Co. already competed.
''Look at how successful that's been,'' said Rubin, who has
a ''buy'' on Warner-Lambert.
De Vink said working with Pfizer's sales force helped get
Lipitor into doctor's office more quickly than Warner-Lambert
could have done alone. Once familiar with the drug, many doctors
began to prescribe Lipitor for their patients even though the
older rival pills from Merck & Co. and Bristol-Myers Squibb Co.
have been studied more extensively.
As a result, sales of Lipitor have been growing much more
quickly than those of rival pills, such as Merck's Zocor.
Agouron Purchase
Already, Warner-Lambert is investing some of its Lipitor
profits to bolster its drugmaking operations. Warner-Lambert last
week announced it would buy Agouron Pharmaceuticals Inc. for $2.1
billion, adding Agouron's top selling protease inhibitor drug for
AIDS and experimental medicines for AIDS, cancer and the common
cold. Warner-Lambert said it intends to keep Agouron's research
programs intact after acquiring the biotechnology company.
The intended Agouron purchase comes as safety concerns about
Warner-Lambert's Rezulin could slow its sales.
In March, an advisory committee for the U.S. Food and Drug
Administration will review Rezulin use. At the same time, the FDA
is reviewing applications from rival drugmakers for similar
diabetes pills that may have fewer side effects.
SmithKline Beecham Plc last month won priority review at the
FDA for its diabetes drug, Avandia. Also in January, Japan's
Takeda Chemical filed an FDA application for its own diabetes
pill, Actos. Takeda intends to sell this drug in the U.S. in a
partnership with Eli Lilly & Co.
64th Birthday
Goodes, who will turn 64 on April 11, is stepping down
before reaching Warner-Lambert's mandatory retirement age of 65.
Goodes joined the company in 1965.
''After 34 years, I've decided it is the ideal time, both
personally and professionally, for me to retire,'' Goodes said in
a statement. ''Simply put, I have my health and my work here is
complete.''
Under Goodes, Warner-Lambert's scientists proceeded with
research and development of Lipitor, which was a new entry in a
market where Merck and Bristol-Myers already were competing.
Lipitor proved to be more popular with doctors because it appears
to lower cholesterol more effectively.
De Vink joined Warner-Lambert in 1988 as vice president
after spending 20 years at rival drugmaker Schering-Plough Corp.
A native of the Netherlands, he became an American citizen in
January 1991. He has a master's degree in business administration
from American University.
De Vink was elected to Warner-Lambert's board in 1991. In
addition, he serves on Bell Atlantic Corp.'s board, which also
includes John Stafford, the chief executive of rival drugmaker
American Home Products Corp., as a member.
Besides these corporate boards, De Vink serves as a director
of the United Negro College Fund and the National Actors'
Theatre.
--Kerry Dooley in the Washington newsroom (202) 624-1820 /ah /mfr
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