King Without the Crown - Pharmaceutical Executive


King Without the Crown
While most of pharma tries to convince the world that R&D is the number-one priority, one specialty company boasts that it has no lab.

Pharmaceutical Executive

The second coming of King began in March 2004, when it became apparent that the Gregorys' mistakes had put the company in a nearly indefensible position: Inventories were through the roof, sales and marketing expenses were excessive, and King's product portfolio was facing attacks from multiple competitors. Not only did the Gregorys have no answer for any of these challenges, but their top-heavy management structure hampered the search for a solution. As part of its plan to eliminate the infamous founders, the board encouraged then-CEO Jeff to recruit a potential successor. He decided on Bristol-Myers Squibb's president of virology and oncology, Brian Markison, who left the company he'd been with for 22 years to become King's COO.

The Final Three
The plan was for Markison to work with Jeff for about a year, then succeed him. But a week before Markison's first day on the job, he got word that Jeff—having reached a point of irreconcilable differences with the board—would be leaving the company immediately. Committed to doing a CEO search, King's board interviewed about seven candidates, while Markison went to work on beefing up corporate compliance, identifying manufacturing inefficiencies, and coming up with a plan for how to defend King's brands against forthcoming generic threats. Impressed, the board put the incumbent in charge.

Markison sometimes comes off more as court jester than king. He jokes around with his executive team, many of whom he personally recruited to replace members of the old regime. At five feet seven inches, this 46-year-old with a buzz cut projects a demeanor more of family man than the man. But his colleagues, who feel free to answer his joking comments with barbs of their own, acknowledge his position—boss of a $1.77 billion (2005 revenue) public company that was teetering on the edge until he arrived. When the discussion turns to business, Markison's fellow execs pipe down and let him do the talking. He demonstrates a level of confidence that makes it obvious why he was chosen to lead a company that, in his own words, "two years ago, was about to become nonexistent."

Injecting Profits
That's when Mylan Laboratories announced its plan to buy King for $4 billion. Markison, who says he didn't find out that King was in merger discussions until two weeks after he joined the company, was theoretically in favor of the deal. "I think the idea"—joining a generic drug maker with strong manufacturing capabilities, with a branded company with expertise in commercial operations—"was brilliant." Not everyone agreed. The deal unraveled when billionaire investor and Mylan shareholder Carl Icahn became convinced that, given King's rocky past and imminent struggle against generics, it was not worth the $4 billion Mylan was offering to pay. And even Markison admits that Mylan was really "not prepared" to take on this kind of transaction. "They didn't have the right management team," he says.

Making the Cut

Markison knows a thing or two about choosing a management team. When he arrived at King, as he politely puts it, "we invited people to leave the company, and we invited people to join the company." More specifically, Markison wiped the slate clean of senior executives who had the old King on their breath. He replaced them with a group that, he says, he would pit against any team in the industry.


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