Sciele Pharma: The Next Level - Health Executive - Red Coat Publishing - Inside Healthcare

To evolve and grow your business successfully, you must focus your efforts and resources. At least that’s the business philosophy behind Georgia-based Sciele Pharma. The company was founded in 1992 as a small cough and cold sales and marketing firm in the pharmaceutical industry. It now focuses on four therapeutic areas—women’s health, pediatrics, diabetes, and cardiovascular—dealing primarily with products large pharma companies turn away.

Ed Schutter, President

“Before I arrived, the company began bringing on products in the GI and cardiovascular arena—products that large pharmaceutical companies no longer had an interest in because the products were too small for them,” said Ed Schutter, president. “The products had some nice growth opportunities for us, and they opened the door for Sciele Pharma to acquire assets, marking the next phase of its evolution.”

That next phase began in 2003 when current CEO Patrick Fourteau and CFO Darrell Borne came onboard. At the time, Sciele Pharma wasn’t very profitable. According to Schutter, Fourteau and Borne returned the company to profitability by instilling a culture of entrepreneurial spirit and speed of execution—staying nimble with the ability to respond rapidly to changing market conditions. This sense of passion for success trickles down throughout the entire 900-employee organization and, according to Schutter, gives Sciele Pharma its competitive advantage.

“Number one, they established business rigor here—it had loosened up a bit—and returned the company to profitability,” he said. “Number two, they developed a culture focused on speed of execution and a sense of urgency. They also developed a pay-for-performance model with the sales team and the entire company.”

Schutter came onboard in 2006, and since then the company has developed an executive team by bringing in professionals from big pharma companies, developing a broad base of experience on how to develop, market, and sell products. The success of these changes is in the numbers. In 2005, the company garnered $216 million in revenue. In 2006, with two products in development, that number grew to $293 million. For 2007, the company has reported $382 million in revenue and now has 12 products in the pipeline, either awaiting approval or in late- stage development programs.

“Our business strategy now is two-pronged. We want to continue acquiring products that fit within our therapeutic areas and bring in some opportunities currently in development,” said Schutter. “We have to be selective, obviously. Being selective and staying concentrated on certain therapeutic areas focuses our efforts and maximizes our current platforms and areas of expertise.”

Smooth transition
Since 2006, Sciele Pharma has transitioned from a small sales and marketing company focusing on cough and cold therapies to a full-fledged pharmaceutical company with FDA-approved products and research and development capabilities that make it possible to bring those products to market. Although the company has been solidly focused on women’s health and cardiovascular for years, pediatrics and diabetes were added in the last 12 months.

In 2005, the company acquired two products from Andrx Pharmaceuticals, now part of Watson Pharmaceuticals. One product, called Altoprev, is for lipid disorder. The other, Fortamet, is an extended-release metformin product for Type 2 diabetes. At the end of 2007, Sciele collaborated with Novo Nordisk, a world leader in primarily Type 1 diabetes insulin products. Novo had Prandin, a product to treat Type 2 diabetes they were not promoting that, while not a priority for a multi-billion-dollar company, worked well for Sciele. As of January 1, Sciele took over the promotional rights.

“Novo had another product in development, a combination of Prandin plus Metformin called PrandiMet. It’s at the FDA right now,” said Schutter. “We expect it to be approved by the third quarter of this year, and we’ll be launching that product for Novo. This will provide us three unique product offerings specifically for Type 2 diabetic patients.”

In mid-2007, Sciele Pharma acquired a small pediatric company, Alliant Pharmaceuticals. Sciele Pharma already had begun discussions to acquire a lice product in development, now under review with the FDA, as well as a product for attention deficit disorder, which is in Phase III clinical development. The executive team realized the growth potential in pediatrics and found Alliant a perfect fit for Sciele Pharma’s platform of sales and marketing.

“Alliant had a small, home-office staff, and it outsourced almost everything,” said Schutter. “It was basically a sales and marketing company, and its pay-for-performance model for the sales reps was the same as ours. The vast majority of Alliant’s sales reps are still part of our team.”

Focused growth
As Schutter looks at Sciele Pharma’s growth potential, he is aware that the benefits the company had as a smaller pharmaceutical company must not be overlooked in the future. The company’s goal is to continue at the same growth rate it’s had in the past, and the guidance for 2008 is around $450 million. However, maintaining 20%-plus annual growth becomes more challenging as the company grows.

“We’ve built a lot of our business on $50 million to $100 million products, and as we grow to a half-a-billion-dollar company, we will need to continue to launch three to four new products each year, or we may need bigger products to move the needle,” he said. “Our biggest challenge moving forward is executing on all of our current and pipeline products and finding new and bigger opportunities.”

Another challenge will be operating the four therapeutic divisions with an autonomous structure to maintain the entrepreneurial spirit and nimbleness that made the company so successful to date. A focused vision, coupled with an experienced executive team, ensures success as Sciele Pharma moves ahead.

“We’ve brought in a lot of talent from other pharmaceutical companies with a broad base of experience and understanding of how to develop, market, and sell products. By expanding our talent pool beyond Patrick and Darrell, we have another layer of management with seasoned executives who can continue to take us to the next level,” Schutter concluded.

< Previous Story

CURRENT ISSUE

CATEGORIES

HEALTH SOLUTIONS