Streamlining CROs

New Owners: VLSI

Cats and Dogs

IBIS to Ibis Plaza

New in Town

Deaths

Corrections or additions?

Covance Buys Parexel

These articles by Barbara Fox and Melinda Sherwood were published

in U.S. 1 Newspaper on May 5, 1999. All rights reserved.

Drug testing is like stock brokering. Whether the stock

is bought or sold, the broker earns a commission. And whether the

drug succeeds or fails, the clinical resource organization (CRO) gets

paid for doing the test. It’s a growth industry. More than 1,000 new

drugs are expected to go through testing in the next decade.

Operating in this lucrative arena, the world’s second largest CRO

— Carnegie Center-based Covance — now aims to be the first

largest, or at least tie for first. Covance announced last week it

would buy out Boston-based Parexel and attain a market value of $2.2

billion and 1999 revenues of $1.3 billion. The combined companies

would be just about as large as the current world leader, Quintiles

Transnational Corp., located in North Carolina’s Research Triangle.

Covance paid about $825 million in stock — exchanging 1.184 shares

of Covance common stock for one share of Parexel. The day after the

deal, Covance stock dropped 19 percent and Parexel went up 20 percent.

The new company will be called Covance Parexel Inc., and though both

CEOs are currently yoked together as co-chairman, Covance gets to

name the headquarters — Princeton.

"We have the capacity to grow by several hundred with ease,"

says Paul Surdez, spokesperson. Earlier this year Covance rearranged

950 workers, consolidating offices from three buildings into two,

including a new building, Carnegie 206, the first at the Carnegie

Center to have a company name and logo plastered on the side.

Though company histories list 1987 as the founding date, Covance has

roots in a home-based business founded in 1976 by Hein Besselaar.

It was bought by Corning in 1989, moved to the Carnegie Center, spun

off from Corning, and went public at the end of 1996, trading on Nasdaq

as CVD. Areas in which Covance pioneered: using robotics in clinical

packaging, using interactive voice response technology, and using

optical scanning as a data management tool. Two of its systems are

in the permanent collection for IT research at the Smithsonian.

Covance has 7,300 employees worldwide, including about 950 at the

Carnegie Center, and it operates in 17 countries. In addition to contract

research and administration of Phase I to IV clinical trials, it offers

health economics consulting and biomanufacturing. Covance claims a

competitive advantage derived from support services such as design

packaging, central distribution centers (warehouses in Allentown,

Pennsylvania, as well as in England and Switzerland), central laboratories

for specimen analysis (in Indianapolis, Geneva, Sydney, and Cape Town),

and interactive voice response systems.

The president and CEO, Chris Kuebler, is an alumnus of Florida State

who came to Covance in 1994 after working for 20 years at Abbott Laboratories

and Squibb. Covance is by far the largest of Princeton’s CROs, but

there are 14 others, including the second firm founded by Hein Besselaar,

PharmaNet, with 150 employees at the Carnegie Center, and P.P.D. Pharmaco,

with offices on Lenox Drive.

Parexel was founded in 1983 by Josef H. von Rickenbach, a Swiss-born

pharmaceutical executive who has an MBA from Harvard. The firm went

public in 1995 (Nasdaq: PRXL) and last year had annual revenues of

more than $325 million, offices or labs in more than 25 countries,

and 4,300 employees worldwide. It claims a competitive advantage in

launch services that Covance lacks, such as medical marketing and

education, and it also is known for its training expertise.

Quintiles Transnational Corp., until now the largest CRO, was founded

in 1982 by Dennis Gillings, a professor at University of North Carolina

who did biostatistical consulting. Unlike his competitors, who concentrated

on the medical research aspect of drug development, Gillings took

an information management approach and honed an infrastructure that

could accept data from multiple global sources. Quintiles went public

in 1994 and has added a pharmaco-economic research company and a contract

sales and marketing organization.

Gillings is still the CEO and claims to have the industry’s largest

database of medical and pharmacy data, refreshed daily, which provides

real-time information based on medical and pharmacy transactions —

particularly useful for product launches. He claims that aging populations,

increasing healthcare spending, and revved up drug discovery programs

will spur growth in the CRO industry.

"The CRO industry tends to mirror the pharmaceutical industry

as a whole," says Patricia Leuchten, founder and principal of

a new Nassau Street consulting firm, PharmaLink. "With all of

the mergers of the pharmaceutical giants, it is not surprising that

two of the largest CROs have merged to provide an even broader scope

of services."

Covance (CVD), 206 Carnegie Center, Princeton 08540-6681.

Chris Kuebler, chairman and CEO. 609-452-4440; fax, 609-452-9375.

Home page: http://www.covance.com.

— Barbara Fox

Top Of Page
Streamlining CROs

For smaller pharmaceutical and biotech companies to

outsource their clinical trials is the trend for the next decade,

says Patricia Leuchten, founder of Princeton’s newest pharmaceutical

consulting firm, PharmaLink at Thompson Court on 195 Nassau Street.

"It will be important for pharmaceutical and biotech companies

to be efficient with the way they interact with their CRO partners,"

says Leuchten.

A native of the Scranton area, Leuchten majored in molecular biology

at Lehigh, graduating in 1987, and worked in Wilmington, Delaware,

before coming to Princeton’s CRO hub in 1989. She most recently worked

at PPD Pharmaco, the North Carolina-based CRO with a Lenox Drive office.

For a senior level executive to put together a request for information

from a CRO is a waste of time, Leuchten believes. "Yet some biotech

companies contract out as few as three or four studies a year, so

it doesn’t make sense to hire a full-time person. I am targeting biotech

companies who don’t have enough need for a full-time person on board."

Through collaborators she can do market research, licensing, and web

product projects.

She is also working with the large pharmaceuticals, to streamline

the outsourcing of clinical trials with contract resource organizations.

And for the CROs, she is providing strategy consulting and professional

coaching. "Because I am working on both sides of the fence,"

says Leuchten, "I am helping facilitate partnerships."

PharmaLink, 195 Nassau Street, Thompson Court,

Suite 21, Princeton 08542. Patricia Leuchten, founder and principal.

609-252-9020; fax, 609-252-9022.

Top Of Page
New Owners: VLSI

VLSI Technology, 311C Enterprise Drive, Plainsboro

08536. Anita Letzsen, regional sales manager. 609-799-5700; fax, 609-799-5720.

Home page: http://www.vlsi.com.

The big Dutch firm, Philips Electronics, has finally struck an agreement

to buy VLSI Technology; the integrated circuit design company will

become a fully-owned part of Philips’s semiconductor unit. Here on

Enterprise Drive is a sales and engineering office; the headquarters

for VLSI is in San Jose, California.

As prices plummet for chips, chip manufacturers are trying to diversify.

In the wake of a failed mobile phone venture with Lucent Technologies,

Philips hopes to use the VLSI purchase to enter the mobile phone handset

market. In February Philips made a hostile bid of $17 per share, but

this transaction — an all cash deal for $1.05 billion plus the

assumption of some debt — values VLSI at $21 per share.

Top Of Page
Cats and Dogs

Here’s a neighborhood that’s going to the dogs, and

the neighbors are likely to be pleased at the prospect. The empty

lot on the corner of Alexander and Roszel Road, formerly the site

of two 1950s style ranch houses, will soon be transformed into a large

veterinary hospital that will house both the Princeton Animal Hospital,

currently on Route 1 North, and the Carnegie Cat Clinic. Both businesses

are owned and operated by husband and wife veterinarians, Jim and

Terry Miele.

Construction on the site started a month ago, when the Mieles razed

their home and the adjoining Carnegie Cat Clinic to build the 11,380

square-foot, two-story colonial brick hospital. The Cat Clinic, meanwhile,

is operating out of the Mieles’ third business, the Plainsboro-West

Windsor Animal Hospital on Princeton-Hightstown Road.

Architect Warren Freedenfeld of Boston has designed the building,

which will include a few elaborate touches that may rival the upscale

elements of the new buildings already underway next door on Roszel

Road, the 300,000 square feet Commons at Princeton. The new animal

clinic will have arched windows, round stair tower, and exterior woodwork

and columns. It will have surgical suites, and separate wards for

cats and dogs.

V.J. Scozzari and Sons in Lawrenceville is excavating the basement

and doing site work on utilities and a storm water control system.

The frame should be up by June, says Greg Scozzari, and the job should

be completed by late this year.

The Mieles purchased the property at 726 and 730 Alexander Road back

in 1991. The only way they could afford the land at the time was to

move in. The husband and wife team moved their five kids, a cat, dog,

and several frogs, gerbils, and mice into the small ranch-style home

next to the clinic. "We’ve always believed in delayed gratification,"

Jim Miele says.

Plainsboro-West Windsor Veterinary Associates,

332 Princeton-Hightstown Road, Cranbury 08512. 609-799-3110; fax,

609-897-0838.

Princeton Animal Hospital, 3440 Route 1 North,

Princeton 08540. 609-520-2000; fax, 609-520-2000.

Top Of Page
IBIS to Ibis Plaza

Impact Business Information Solutions, 3535 Quakerbridge

Road, Ibis Plaza, Suite 104, Hamilton 08619. Srinivas Vangala, president.

609-689-1066; fax, 609-689-1069.

When Srinivas Vangala decided to move his software firm from a home

office in Robbinsville, he drove down Quakerbridge Road and realized

that the acronym for his firm matched the name of an office center,

Ibis Plaza. "I decided that was a good place to be," says

Vangala, and he moved on April 1.

Shrikant Nadkarni, based in Edison, is the firm’s accountant, and

Barry Szaferman of Szaferman Lakind et al, at Quakerbridge Executive

Center, is the corporate attorney.

The firm does Java applications for Fortune 500 clients and most often

works on a fixed price bid, subcontracting work rather than hiring

more consultants. The reason: it’s hard to find good help.

"When you do find a person typically you can’t afford them,"

says Vangala. "We do the development and install the work at the

customer’s site. We work with people whom we know have the skills.

We are quite happy with the business we have been doing in the past

few years."

Vangala is the son of a physician, and one of his two sisters is also

a doctor; she is chief of pediatrics at Magee Hospital in Pittsburgh.

Vangala is married and has two school-age children; he earned his

engineering degree from Madras University in 1980 and, after working

as a consultant, he immigrated to this country in 1987. The following

year he took a job with Bristol-Myers Squibb, and by the time he left

10 years later he was senior director for software development, responsible

for intranet web development across the corporation.

"The real reason I am in business is because I was an entrepreneur

prior to immigrating," says Vangala. "Business is what I have

always wanted to do."

Top Of Page
New in Town

Stratus Engineering, 2525 Route 130, Building E,

Cranbury Plaza, Cranbury 08512. Tom Foley, vice president of projects.

609-409-9790; fax, 609-409-9788. Home page: http://www.stratusservices.com.

This architectural and engineering firm, which was operating from

corporate office in Manalapan, has moved into its permanent location

at 2525 Cranbury Plaza. Founded in 1997 by five partners, the firm’s

clients including Con Edison New York, Lucent Technologies, and Hoechst

Celanese.

Top Of Page
Deaths

Madelaine Herenchak, 72, on April 30. Until 1995 she was

an instructor at Princeton University.

Isabel Temesy, 67, on April 30. She had worked as a secretary

at the Princeton Packet.

Ann M. Centrone-Momo, 38, on May 3. She was a pharmaceutical

sales representative for Pfizer Drug Co. and the wife of Carlo Momo,

owner of Teresa’s Pizzetta Cafe, Pizza Colore, Mediterra, and the

Witherspoon Bread Company.

Corrections or additions?


This page is published by PrincetonInfo.com

— the web site for U.S. 1 Newspaper in Princeton, New Jersey.

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