An Account of Syntex

In 1957, the company transferred to Panama, where it was legally incorporated as a Panamanian company. Although Syntex did not base its primary operations in that country, Panama's liberal corporate laws allowed the company a flexibility and independence that accounted for much of its success. In 1958, Syntex became a publicly traded corporation.

By 1962, Ortho Pharmaceutical Company, a division of Johnson and Johnson, began to market Ortho-Novum, which rapidly became the best-known and best-selling oral contraceptive in the United States. "The pill" caused a revolution in American society, allowing women a relatively safe, easy, highly effective means of birth control for the first time in history. The active ingredient in Ortho-Novum was norethindrone, which was manufactured by and sold to Ortho by Syntex.

James G. Barrie (1977) observes, "Syntex adopted licensing as its initial international strategy and achieved rapid expansion" (p. 27). Instead of manufacturing and marketing finished drugs, Syntex's early strategies left many of the final steps to other companies. Instead, the business focused on providing important components of other product lines, components for which Syntex could guarantee patents and quality control.

Under his auspices, Syntex's sales more than doubled and profits more than tripled. Bowers continued to be a hands-on scientist, publishing at least 90 scientific papers and receiving more than 120 patents during his tenure at the company.

The company reached $1 billion in annual sales in 1987, and, in the summer of 1989, 55-year-old Paul E. Friedman became the third CEO in Syntex's history (Rosenkranz had headed the organization during its first 30 years but had not taken the chief executive title; Bowers had been the first to be given the title). Once again, the company promoted from within. Friedman had joined Syntex in 1962 as a professional medical representative in New York, marketing Syntex products to doctors and hospitals.

Syntex had already become well known throughout the industry for promoting from within, preferring to raise executives through the ranks, rather than recruit them from the outside. Bowers became president of Syntex in 1976 and its first chief executive officer in 1980. The following year, he was also elected chairman of the board.

Syntex continued to diversify its operations and its products. In 1966, the company announced a joint venture with Varian Associates, a business later known as Syva Company. This concern eventually developed and marketed FRAT, the free-radical assay system of drug abuse tests. In 1974, Syntex consolidated all its animal health activities into another subsidiary, Syntex Agribusiness, Inc.

At the time of Friedman's promotion, rumors had begun to circulate that Syntex might be taken over by one of the larger pharmaceutical companies.

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