DURHAM — When a giant corporation recruits an outsider as CEO, you can usually count on some top executives departing from the business – either voluntarily or involuntarily.
But that hasn’t happened at Quintiles, the world’s largest pharmaceutical services company, in the six months since Tom Pike was brought in to run the day-to-operations. A 22-year-veteran of Accenture, the management consulting and technology services company, Pike was working with startups in the technology and healthcare sectors when Quintiles tapped him to succeed founder Dennis Gillings.
“There has been no turnover in the top team,” said Pike, 53, who was named CEO in April.
In an interview with reporters Monday at the company’s Durham headquarters along Interstate 40, Pike was lavish in his praise of the organization but tight-lipped about Quintiles’ performance and whether the company is gearing up for an initial public offering.
Noting that Quintiles has 1,300 M.D.’s and Ph.D.’s among its staff, Pike remarked at one point: “There is so much we can do with that kind of horsepower.”
When a question arose about the possibility of an IPO, Pike handed it off to David Coman, senior vice president of corporate communication and patient recruitment.
“We continuously look at our capital structure,” Coman said. “At this point, we have no more information about that that we can share.”
Quintiles ranks among the Triangle’s largest employers with about 2,000 workers. It was a publicly traded company from 1994 to 2003, when Gillings became frustrated with running a publicly traded company and engineered a leveraged buyout. But Wall Street has speculated for years that the company would eventually go public again, and the buzz rose a notch when Gillings, 68, stepped down as CEO. Gillings is now executive chairman.
Bloomberg News, citing two people familiar with the situation, reported last month that Quintiles may file for an IPO within the next 18 months.
Quintiles, which generated more than $3 billion in revenue last year, helps pharmaceutical and biotechnology companies test experimental drugs and assists them with selling and marketing medicines once they win regulatory approval.
“We continue to grow as a company,” Pike said, declining to be more specific about revenue numbers. “Let me just say we are healthy.”
Quintiles has added 4,000 workers over the past three years and now employs 27,000 people worldwide. Pike said the company expects to continue to “positively contribute to the employment situation” moving forward, but he provided no details.
Despite its overall employee growth, Quintiles laid off what the company said was “fewer than 40” of its Triangle workers in June.
“We’re somewhat subject to what our customers need and want,” Pike said. “With a business service provider, you tend to have a lot of your product be your people. So you will continuously evolve that base of people to serve your customers.”
William Blair & Co. forecast earlier this year that revenue for contract research organizations that help pharmaceutical companies test experimental medicines would rise 8.3 percent in 2012, a marked improvement over recent years.
As an industry pioneer, Quintiles can take partial credit for the Triangle becoming a hub for the CRO industry. Major players that are based here or have a major local presence include INC Research, PRA International and PPD.
Pike said that the “patent cliff” that has hurt the pharmaceutical industry’s revenue the past few years is winding down, which should make more money available for investment in research and development. The cliff refers to the expiration of patents on blockbuster drugs that preclude the introduction of cheaper generics.
“If we can get back to some growth in the industry, the opportunity for us is terrific,” Pike said.
He added that Quintiles is well-positioned to take advantage of a surge in R&D investment and, down the road, promoting a possible wave of new drugs that win regulatory approval..
“What we are about is making our customers more efficient and more effective in what they do,” Pike said. “We have some planning and design tools that nobody else in the industry has to really make sure you design an effective clinical trial.”
Being the largest company in the industry is an advantage and a selling point, Pike said.
“We can make investments that other people can’t,” he said. “When it comes to science and technology, just because of our scale, a 1 percent investment for us is a lot more for (competitors).”
Quintiles also benefits from economies of scale and a “global reach” that includes offices in more than 60 countries. The latter can help, for example, when testing an experimental drug developed to treat a rare medical condition.
“You may need access to sites and people all over the world to be able to get enough” patients to conduct a clinical trial, he said.
Pike said that although Quintiles is willing and able to make acquisitions – it made three in 2011 – the company’s primary growth engine has been and remains internal growth.