Dennis Gillings, an industry pioneer who built Quintiles into the world's largest pharmaceutical services company, is planning to step back from the company he founded more than 30 years ago.
Durham-based Quintiles announced Friday that Gillings, 70, plans to step down as executive chairman of the company’s board of directors at the end of this year.
After he relinquishes the chairman’s role, “Dr. Gillings will continue to serve on the board and continue to work with CEO Tom Pike,” said spokesman Phil Bridges.
Gillings’ decision is an implicit endorsement of the leadership shown by Pike, who succeeded Gillings as CEO in 2012.
Since Pike took over running the company, Quintiles navigated a successful initial public offering and has performed well financially. For the three quarters that ended in September, Quintiles’ revenue rose 10 percent to $4.05 billion; net income rose 74 percent during that span.
Quintiles said in its announcement that its board of directors will select a new chairman, who will be in place by January 2016.
Gillings, a former biostatistics professor at UNC-Chapel Hill, co-founded Quintiles in 1982 and was its CEO for three decades. He also is Quintiles’ largest shareholder with a 16.1 percent ownership stake, according to the company’s latest proxy.
Today Quintiles is the leading contract research organization, with more than 32,000 employees worldwide, including 2,500 in the Triangle. CROs help pharmaceutical and biotechnical companies test experimental drugs and analyze the results. Quintiles also assists those companies with selling and marketing prescription medicines once they win regulatory approval.
Quintiles’ presence here was one of the catalysts that helped make the Triangle the epicenter of the CRO industry. Three of the world’s eight largest CROs – Quintiles, PRA Health Sciences and INC Research – are based in the Triangle. A fourth industry giant, PPD, based in Wilmington, has 1,600 employees in the Triangle.
Quintiles also announced Friday that it is revamping its board to reflect that it is no longer classified as a “controlled company.” The company shed that designation when Gillings and a trio of private equity funds sold more than 13 million shares in November, putting their collective ownership stake in the business below the 50 percent mark.
Being a controlled company under New York Stock Exchange rules exempted Quintiles from certain corporate governance requirements designed to protect shareholders, including the requirement that a majority of the company’s board of directors be so-called independent directors.
Quintiles’ board, which today has 11 members, will be reduced to a nine-person board – five of whom will be independent – under the new governance plan that will be put in place in November.
The board has had just three independent directors, but on Friday the company announced a fourth: Dr. John Leonard, the chief medical officer for Intellia Therapeutics, a Massachusetts biotech company.
Moreover, Quintiles is temporarily increasing to a 13-person board to accommodate two new independent directors – Leonard plus a director who hasn’t yet been named.The temporary increase aims to transition the board to five independents, who will be in the majority when the board is reduced to nine members.