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King Pharmaceuticals, Inc

King Pharmaceuticals

King Pharmaceuticals the world's 39th largest pharmaceutical company, is based in Bristol, Tennessee. King produces a wide range of pharmaceuticals, including Altace for heart attack prevention, Levoxyl for hypothyroidism, Sonata, a sleeping aid, and Skelaxin, a muscle relaxant, as well as Glumetza manufactured by Depomed, for diabetes. King Pharmaceuticals currently operates manufacturing facilities in Bristol, Tennessee, Rochester, Michigan, St. Louis, Missouri, St. Petersburg, Florida, and Middleton, Wisconsin, and they employ approximately 2700 people including a sales force of over 1000 individuals.

King's wholly owned subsidiaries are Monarch Pharmaceuticals, Inc., King Pharmaceutical Research and Development, Inc., Meridian Medical Technologies Inc., Parkdale Pharmaceuticals, Inc., King Pharmaceuticals of Nevada, Inc., and Monarch Pharmaceuticals Ireland Limited.

Company History

King Pharmaceuticals was founded in 1993 by John M. Gregory. In January 1994, King acquired a former Beecham plant in Bristol, TN. The facility was purchased for $1.18 million from RSR Pharmaceutical, who had been using it after Beecham merged with SmithKline. King initially began only manufacturing drugs for other pharmaceutical companies, but soon established its long standing strategy of acquiring branded prescription drugs, which have a much higher gross margin than contract manufactured drugs. From 1994 to 1998, King obtained about twenty smaller branded drugs and then went public in June 1998.

In late 1998, King Pharmaceuticals purchased it’s most successful drug, Altace, for $362.5 million. As a result of increasing the number of sales reps and the findings of the Heart Outcomes Prevention Evaluation (HOPE), Altace sales sky rocketed. Using profits from Altace, King continued to add product lines. The most significant purchases being Levoxyl, Thrombin, and Cytomel in 2000. The company, seeing fewer opportunities to obtain branded drugs, acquired an R&D company based to in North Carolina also in 2000. In 2002, King purchased a maker of auto-injectors, Meridian Medical Technologies.

In 2002, John Gregory stepped down as CEO, and his brother Jefferson Gregory took over. Then in 2004, Jeff stepped down as well after the SEC began investigations into King’s Medicaid billing practices. The board named Brian Markison to replace Jeff Gregory. Soon after in July 2004, a deal was made for Mylan Laboratories to acquire King for $4 billion. Investors, most notability Carl Icahn, were very critical of the merger saying that Mylan was overpaying for King. The next year the deal was called off.

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