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
Chris Kuebler, chairman and CEO. 609-452-4440; fax, 609-452-9375.
Home page: http://www.covance.com.
— Barbara Fox
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,"
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
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."
Suite 21, Princeton 08542. Patricia Leuchten, founder and principal.
609-252-9020; fax, 609-252-9022.
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.
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
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.
332 Princeton-Hightstown Road, Cranbury 08512. 609-799-3110; fax,
Princeton 08540. 609-520-2000; fax, 609-520-2000.
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
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."
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
an instructor at Princeton University.
at the Princeton Packet.
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.