Under Construction - Pharmaceutical Executive

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Under Construction


Pharmaceutical Executive


"But I didn't realize the difficulties there would be. What I envisioned as a $15-$20 million investment on my part turned into perhaps $75 million before we got it approved and could do an IPO in 1997."

In the meantime, the cholesterol market was transformed by the introduction of a new class of drugs. "Statins took over the market for cholesterol, and people largely forgot about niacin and other drugs such as gemfibrozil," says McGovern.

"We've done a great deal of research into niacin's method of action and its pharmacokinetics," he continues. We determined that to optimize niacin, the secret is a 'Goldilocks approach.' It has to do with the rate of absorption—not too fast and not too slow. Once we understood this, we developed a proprietary position through the development and acquisition of numerous patents. What we've done is crack the code on niacin."

Layers of the OnionNiaspan launched in 1997, the only such product approved by FDA to date. But Kos was by no means out of the woods. "Originally, Niaspan's ramp wasn't a rocket ship," says Christopher Kiritsy, executive vice- president and chief financial officer. "I remember when investors said Niaspan at peak was going to be a $25 million product."

The problem was that, though the world had grown much more aware of cholesterol, it wasn't nearly as aware of HDL cholesterol.

"Niaspan and Advicor are pioneering a form of treatment," says Richard King, executive vice president of commercial operations. "We spent about three years in a highly educational mode, working with the cardiology groups and key-thought-leader cardiologists to generate understanding. Once the understanding was there, they became evangelical."

One of the lessons Jaharis learned at Key is that it's possible to grow certain products by starting with a core of high-prescribing specialists and gradually expanding the market as each new group of physicians understands and accepts the message—"peeling the layers of the onion," as Adams calls it. But Kos, despite its rapid growth, is still a small company. Growing the sales force has been a challenge.

"You couldn't hire enough people, and you couldn't put the management infrastructure in place for a 400-person sales force from the get-go," says Bell. "At our first sales meeting in 1997, we had 87 reps and managers. That was way too few, but it was what we could afford. Our idea was to get it up to a couple of hundred as quickly as we could. There were two controlling elements. One was how much cash we had and how much we had to pay for them, and number two was how quickly we could go through the recruitment process."

Kos has tended to cherry-pick reps from its larger competitors in cardiology."We looked for those with strong pharma experience and relationships in the cardiovascular area already,' says King. "We paid more for that type of individual, but we realized early on it was the right thing to do."

The Right BalanceIn 2001, Adrian Adams was president and CEO of Novartis UK, when he got a phone call from Jaharis. Says Adams: "I'd heard his name, and I'd certainly heard of Kos. He said he'd heard about me from a number of people and asked if I'd be interested in joining Kos. At the time I was happy, so I said, 'Send me some information.' Mike replied, 'Why don't you just get on a plane and come see us?'" A few days later, Adams was at Jaharis' apartment in New York, a few blocks from the Metropolitan Museum of Art, where a gallery of Greek sculpture and the rooms housing the museum's Byzantine collection are named for Jaharis and his wife.


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