Roussel Uclaf History

Company History:

Roussel Uclaf is one of France's most important pharmaceutical companies and among the world's leading diversified pharmaceutical groups. The multinational corporation was the center of controversy in the late 1980s and early 1990s due to its nationalization and the growing presence of foreign concerns on the domestic market, in addition to the company's abortifacient, RU 486. However, Roussel Uclaf remains a source of pride for the French despite the fact that Hoechst A.G., a German company, holds a major interest in the French firm.

In 1920 Dr. Gaston Roussel established the Institut de Sérothérapie Hémopoiétique (I.S.H.) for the production of Hémostyl. Later he directed the fledgling company toward the area of chemotherapy. The 1928 establishment of the Laboratoires Fran&ccedils de Chimiothérapie and of U.C.L.A.F. (Société des Usines Chimiques des Laboratoires Fran&ccedils) strengthened the company in this area. Over the course of the next several years the company grew through acquisition and expansion. Subsidiaries in Mexico, Brazil, and Argentina began operation and a second factory in France at Vertolaye was acquired.

Upon Dr. Gaston Roussel's death in 1947, Jean-Claude Roussel, the founder's son, took over the leadership of the growing company. Although already well established both in France and abroad, Roussel Uclaf's vast expansion subsequent to the founder's death is attributed to his son's business acumen. As a successful industrialist, Jean-Claude Roussel managed the company virtually by himself and expanded operations into a diverse array of businesses. These included such widely disparate activities as chemicals and aviation. The chemical operations are now organized into Nobel-Bozel, a distinct arm of the group's activities.

By 1961 production demands required the company to restructure its operations. To streamline various scientific, industrial and commercial operations, the Roussel Uclaf Group was formed as the subsidiary holdings of the Roussel Uclaf Company. Today the Roussel Uclaf Group engages in such diverse activities as health care, agricultural products, bulk chemicals and consumer products.

Jean-Claude Roussel continued his single-handed management of the company until a 1968 vacation in the south of France where he was introduced to a senior Hoechst director. The successes of the family enterprise had become a source of pride for the French population. This encounter, however, inspired Roussel to pursue a policy to "Europeanize" his company. The result of this meeting led to the West German company purchasing a 43 percent stake in the Chimio holding company which controlled Roussel Uclaf.

This agreement represented an historical undertaking; never before had two private European companies cooperated under the auspice of the Common Market. Despite the implications such a purchase held for the French pharmaceutical industry, Roussel reassured the French government that certain agreements would protect the market from ever completely losing the industry to a foreign company. These agreements provided the French government with authority to decide on the future sale of shares, and also stipulated that Hoechst would never attempt to enlarge its holdings. In addition, it was also agreed that Roussel himself would never sell his personal holdings.

Roussel Uclaf's association with the large West German concern proved useful to both parties. Both companies' chemical operations benefitted by the establishment of the joint venture Nobel-Hoechst Chimie. Furthermore, the association enabled the French company to make use of Hoechst's marketing structure in the Far East and in North America as well as to form its own marketing company within Germany. Hoechst, on the other hand, benefitted from Roussel's successful research in the area of steroids. By far the most beneficial aspect of this partnership, however, was the development of products through joint research. In 1969, Claforan, a third-generation antibiotic, represented the joint efforts of these two companies. Launched in the European, U.S., and Japanese markets, the drug generated over $100 million in 1982.

Yet the original agreement established between the two companies was destined to change. An unfortunate chain of events allowed Hoechst to gain a majority interest in its French partner. In 1972 Jean-Claude Roussel and several company executives were travelling in a helicopter manufactured by Roussel Uclaf's aviation division. En route to Roussel's summer home the helicopter hit a cable line, killing all the passengers aboard.

The Roussel family, still a major shareholder, was suddenly faced with the disposition of Jean-Claude's estate. Since most of Roussel's estate was intimately connected with the activities of Roussel-Nobel, this posed financial problems. In order to remedy these extenuating circumstances, a number of immediate changes went into effect. A five-man executive team called the "collegiate management" took over all decision making responsibilities formerly held by Roussel. It has been suggested that this structure afforded the German company greater influence over Roussel Uclaf's activities.

Soon after this restructure took effect, the Roussel family announced that financial demands to meet the disposition of the estate compelled them to sell a large amount of voting stock in Chimio. This announcement came at a time of renewed debate on nationalizing the French pharmaceutical industry. With the election awarding victory to a socialist government, the communist minister of health, Jack Ralite, spoke in favor of including Roussel in a nationalized industry. At the same time the French ministry was attempting to find "French solutions" to solve the growing problem of foreign company takeovers. Thus, to keep Roussel Uclaf "French" the government solicited the aid of Rhone-Poulenc, France's largest chemical concern, and Elf-Aquitaine, the state-controlled chemical company. Neither company, however, expressed interest in the purchase of the Roussel shares of stock.

Although the resulting sale found the French government gaining half the seats on the company's supervisory board as well as increasing its holdings in the company to 33 percent, the purchasing party was neither a competing French company nor the state. Instead, Hoechst had increased its holdings to 51 percent. Many people reacted to this state of affairs with disappointment; foreign participation in the French pharmaceutical industry now surpassed 50 percent and drugs patented by international concerns accounted for over 75 percent of all pharmaceuticals on the domestic market.

Notwithstanding the turn of events, the government's solution represented a pragmatic approach to limit the costs of its expensive program of nationalization. At the same time, Hoechst benefitted from Roussel's research in agricultural products and the French company continued to benefit from their partner's marketing organization. Some 65 percent of Roussel's total sales in 1981 came from overseas markets, a figure that was greatly supported by Hoechst's marketing organization. Furthermore, joint research and development would enhance the already successful area of antibiotics.

To appease those members of the French population that opposed Hoechst's increased holdings, the French government issued a statement to the effect that it would eventually increase its interest in Roussel Uclaf; in 1982 the government succeeded in acquiring a 40 percent share. Throughout these proceedings the management of Hoechst maintained that Roussel would always remain an independent entity. One major exception to this occurred with the 1974 creation of a joint subsidiary in the United States.

Roussel's growth subsequent to the agreement was impressive. In 1975 the company diversified into the perfume industry with the purchase of a major interest in Parfums Rochas. Several years later Roussel entered the sunglass industry through the purchase of a French company and Foster Grant, the American manufacturer. In addition, Roussel Laboratories, the subsidiary established in the United Kingdom during the 1930s, had grown into a preeminent British concern.

Total research and development expenditures in 1983 amounted to over $110 million which represented a 22 percent increase over the previous year. The company entered the field of biotechnology through the creation of a genetic engineering unit. Using biochemical fermentation, Roussel's Romainville Centre is said to be the greatest molecular biosynthesis installation in the world. Here the company concentrates on the production of vitamin B12, antibiotics, and veterinary products. At two other sites, one in France and one in Brazil, the company is engaged in multistage synthesis through chemical fermentation. Here corticosteroids and norsteroids are produced.

In addition to these products Roussel manufactured a broad array of successful pharmaceuticals and chemical products. Surgam, an anti-inflammatory drug, garnered strong sales for Roussel, and Rythmodan, a cardiac rhythm regulator, accounted for 58 percent of the world sales for this type of pharmaceutical. The company also manufactured Deltamethrin, an active ingredient in a biodegradable group of products found in agricultural insecticides. This group is said to be the most powerful but least toxic of all agricultural products on the market. When Roussel Uclaf purchased Wellcome plc's environmental health business in 1991, it became a principal player in the worldwide environmental health insecticide industry, manufacturing products for the household, lawn and garden, public health, grain storage, and timber protection markets."

Roussel Uclaf began preparing for the unified European market in the early 1990s by consolidating its drug production at the main manufacturing facility at Compiegne, France. Modernization and economizing measures were also prescribed by consultants who examined the corporation in the early years of the decade. The company's pharmaceutical division stumbled in 1992, when sales dropped almost 12 percent. Roussel Uclaf's health, agroveterinary, and chemical units picked up the slack, and sales at the end of the year totaled FFr 14.81 billion, a gain of more than 2.5 percent on the year.

Roussel Uclaf grew more widely known in the 1990s for its development of the so-called "abortion pill," RU 486. The drug was developed by Dr. Etienne-Emile Baulieu and announced in 1982. After six years of clinical tests involving 17,000 women, the French government announced that the controversial drug would be made available for public use. When religious leaders in France protested the drug, Roussel quickly removed it from the market, but doctors from around the world petitioned the French government to force Roussel to distribute RU 486. In 1989 the drug was made available to all of France's abortion clinics and hospitals. One hundred thousand Frenchwomen used it successfully over the next several years. These favorable results convinced both Sweden and Britain to license RU 486, but other countries waited for the United States to make a decision on the drug.

The administrations of successive U.S. Presidents Ronald Reagan and George Bush banned RU 486 from the United States beginning in 1989. Enactment of the ban may have been premature--although distribution of the drug in America had the potential to generate $1 billion in revenues for the company, Roussel resisted licensing to that country for fear of the country's politically-charged atmosphere surrounding abortion. In the early 1990s, no American drug company had come forward to license the drug for the same reason. But 1993 brought a new American president and a new policy regarding RU 486. The Clinton Administration cleared the way for testing in 1992, and that April Roussel licensed RU 486 to the U.S. Population Council, a nonprofit organization headquartered in New York City.

Although the drug is most frequently associated with abortion, European research has shown that RU 486 may be indicated as a treatment for endometriosis, a leading cause of female infertility. The drug's hormone-blocking attributes may also help treat breast cancer and Cushing's syndrome, a life-threatening metabolic disorder. It has even been indicated for such varied conditions and diseases as diabetes, brain cancer, and obesity.

While RU 486 captured the media's attention in the early 1990s, Roussel's primary products included new antibiotics sold under the tradenames Rulid, Claforan, Orelox, and Oflocet. Deltamethrin, Rythmodan, and Surgam continued to contribute significantly to the company's sales. In addition Roussel conducted further research in such diverse areas as cardiovascular diseases, nervous system disorders, dermatology, psychotropics, and infectious diseases. Furthermore, Roussel's activities outside the area of human health care, including veterinary medicines, consumer goods, chemicals, and agricultural products, continued to produce successful products. The French company's penetration of foreign markets has been very successful with Japan and the United States representing major market thrusts. Overall, the association between Roussel and Hoechst has been mutually beneficial and both companies appear satisfied with the arrangement.

Principal Subsidiaries: Application des Matières Plastiques S.A., Sté d' (SAMP); Applications Scientifiques et Medicales S.A., Sté d' (SAMS); Applications Tehniques de l'Oest S.A. (ATO); Centramite de Courtage, Sté; Collectorgane S.A.; Distriphar S.A.; Distrivet S.A.; Farquimia S.A. (Argentina); Grupo Roussel México S.A.; Immobilière du 3 Square Desaiz S.A.; Laboratoires Cassenne S.A.; Laboratoires Cassenne Takeda S.A.; Laboratoires Diamant S.A.; Laboratoires Lutsia S.A.; Les Laboratoires Roussel & Cie. S.N.C.; Les Laboratoires Roussel S.A.; Parfums Rochas S.A.; Procida S.A.; Union Chimique Continentale S.A.; Albert Roussel Pharma GmbH (Germany); Albert Roussel Pharma GmbH (Austria); Roussel SA (Belgium); Ruckor SA (Belgium); Cooper Mac Dougall et Robertson (Belgium); Roussel Laboratories Ltd (Great Britain); Roussel Uclaf Environmental Health Ltd (Great Britain); Roussel BV (Netherlands); Sochiphar BV (Netherlands); Roussel Nordiska AB (Sweden); Sofir SA (Switzerland); Roussel Iberica SA (Spain); Laboratorios Hosbon SA (Spain); Hoechst Roussel Veterinaria AIE (Spain); Roussel Hellas SA (Greece); Roussel Italia SpA; Roussel Pharma SpA; Roussel Hoechst Agrovet SpA (Italy); Biochimica Opos SpA (Italy); Camillo Corvi SpA (Italy); Roussel Portugal Ltda; Roussel Laboratories Pty Ltd (South Africa); Sofaco SA (Ivory Coast); Roussel Cameroun SARL; Societe Africaine d'Investissements et de Participations SA (Morocco); Roussel Diamant Maroc SA (Morocco); Sotrachimm SA (Morocco); Roussel Senegal SARL; Roussel Tunisie SA; Roussel Argentina SA; SARSA (Brazil);Larec Ltda (Equador); Roussel Centro America SA (Guatemala); CARUSA (Guatemala); Laboratorios Helios SA (Mexico); Equipos Agricolas Helios SA (Mexico); Laboratorios Larpe SA (Peru); Roussel de Venezuela SA; Roussel Uclaf Australia Pty Ltd; Tianjin Roussel Uclaf Pesticide Co Ltd (China); Roussel Korea Co Ltd (South Korea); Roussel Uclaf Hong Kong ltd; Roussel India ltd; Nippon Roussel Co Ltd (Japan); Nippon Uclaf Co Ltd (Japan); Roussel Morishita Co Ltd (Japan); Roussel NZ ltd (New Zealand); Roussel Vietnam SARL; Hoechst Roussel Canada INc.; Roussel Canada INc; Roussel Uclaf Holdings Corporation; Roussel Corporation; Hoechst Roussel Pharmaceuticals Inc.; hoechst Roussel Agri-Vet Cy (U.S.A.); Roussel Uclaf Corporation (U.S.A.); Granutec Inc. (U.S.A.).

Further Reading:

• Jackson, Debbie, "Roussel Uclaf Study Calls for Sweeping Changes," Chemicalweek, May 29-June 5, 1991, p. 16.
• Smolowe, Jill, "New, Improved and Ready for Battle," Time, June 14, 1993, pp. 48-51.

Source: International Directory of Company Histories, Vol. 8. St. James Press, 1994.

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