“When Marion Laboratories first started in 1950 – one person, five thousand dollars, no product, no customers – trying to compete against the pharmaceutical giants of this great country (USA). Impossible? Almost. Tough? You bet your life!
But we knew that if we could attract the type of person who would dedicate their working life, who would give 100% of effort that Marion would not only compete but would emerge victorious.”
Ewing Marion Kauffman, 1987, founder of Marion Pharmaceuticals (merged with Merrill Dow - now Sanofi - in 1989 in a $5bn plus deal), US Navy veteran.
After serving in the United States Navy in World War II, Kauffman worked as a pharmaceutical salesman until 1950, when he formed Marion Laboratories with a $5,000 investment, operating it initially out of the basement of his home. He reportedly chose to use his middle name rather than his last name in order to not appear to be a one-man operation.
Within six months the business was a going concern and he moved to a small building at 4215 Troost. By year’s end Kauffman had sold $36,000 worth of drugs, realizing a net income of about $18,000 after expenses and up to $176,000 in 1954. By 1959, the company achieved sales of one million dollars.
Instead of borrowing again Kauffman approached the four physicians who had shifted their business to him when he started in 1950; a friend of one of the physicians; Kauffman’s insurance agent; and, a high school classmate - Raymond Parshall. All seven invested. When Marion Labs went public in 1965, their original $1,000 in common stock was worth about $900,000. Raymond Parshall retired in 1967 because he had so much money from his Marion stock. Kauffman noted in 1991 that their original $1,000 investments were each worth more than $21 million.
In 1965, Marion went public. Stock that associates had purchased for $1 or $3 a share was now worth $28. Since going public in 1965, Marion had experienced five consecutive years of record sales and earnings. Average annual sales gains were 41.4 percent. Average annual earnings gains were 50.3 percent. Marion’s sales force was the most productive in the industry.
In November, 1989 Marion merged with Merrill Dow Corporation in a $5 billion plus deal. It had grown to become a global diversified health care giant with nearly $1 billion in sales and 3,400 associates.