Unfortunately the acquisition led to the S.B.
Penick Company being broken up into many pieces with each one
being sold over a period of about 20 years.
The last remaining piece, known as Penick
Pharmaceuticals, was sold to a private investor in 1988.
At that time Penick
Pharmaceuticals was producing a variety of inorganic chemicals,
especially bismuth salts, several products via chemical synthesis or
fermentation and a full range of opiate narcotics.
Its main products were codeine and morphine.
But misfortune continued.
A combination of factors led the company into financial
important were a significant decline in the market price of codeine and
the Savings and Loan crisis in the United States.
It happened that the main bank that had provided the money for
the acquisition of Penick was effectively
taken over by U.S. Regulators. That ultimately led to a liquidity problem (a shortage of
working capital) at Penick.
Penick responded by
doing whatever it could to reduce the need for working capital.
One of those was to reduce its production activities, especially
for narcotics, because these demanded high levels of working capital.
The plan and expectation were that it would be possible to find
another financial backer to replace its bank or to sell the company to
someone who had the necessary capital.
But neither happened.
The Company hung on but eventually, in 1994, was
forced to declare Chapter 11 bankruptcy.
In 1997 The Bankruptcy Court appointed a Trustee to run the
Company. His job was to
find a buyer.
He did. In
February 2000 a company, Penick Holding
Inc., which had been formed by a group of individual investors
specifically to acquire Penick, received
approval from the Court for its Reorganization Plan.
The Company was acquired by a group of individuals who committed
themselves (and their funds) to re-establishing Penick’s
historical base, its medicinal narcotics manufacturing businesses.
In May 2005, Penick
acquired by Siegfried USA and all manufacturing operations were
relocated to Pennsville, New Jersey. Siegfried USA is a wholly
owned subsidiary of Siegfried, Ltd. of Zofingen Switzerland and
has been active as a manufacturer of Active Pharmaceutical Ingredients
for over 130 years.
retained all of its licenses for manufacturing of controlled substances,
but now from the much more modern manufacturing facility in Pennsville.