This approach to business development is grounded in King's decision to divide its branded pharmaceutical business, its biggest
source of revenue (87 percent in 2005), into three therapeutic areas: Cardiovascular/Metabolics, Neuroscience, and Hospital/Acute
Care (see "The Final Three," right). Each group has its own senior leader, as well as its own sales force, profit and loss
objectives, feasible R&D projects, and goals for lifecycle management. The approach is designed to create a better link among
corporate strategic goals, new business opportunities, and R&D—in essence, to create a formalized method for filling gaps
in each business segment.
King credits Adriann Sax, head of business development, with the idea to divide the business this way. Sax came to King by
way of Merck, where she was hired to start developing its cancer business. She was there just a few months when she received
a call from Markison (the two were colleagues from Bristol-Myers Squibb), who was looking for "somebody who's good in strategy,"
recalls Sax. Soon after she started with King, the company's then-head of business development was asked to leave. Sax, a
self-proclaimed "big mouth," says she "asked for the position" upon her predecessor's departure. Markison agrees with his
old friend: "I think she elbowed her way into it."
Joe Squicciarino, King's CFO and the most recent addition to Markison's lineup, is also a Sax supporter. But the natty, mustachioed,
former Revlon exec cautions against off-message remarks. Still, he can't rein in Sax: "Our flexibility, agility, and creativity
is like a buffet," she says. "We have some very unique capabilities—our commercial infrastructure, our R&D organization. You
can either have a little of everything or you can select what you want."
Unlike many pharmaceutical companies, where the relationship between R&D and commercial operations is likened to church and
state, King prides itself on its philosophy of meshing the two. Executives at the company, with the exception of Jolly, are
uncommonly—and refreshingly—forthright about their priority: making money.
At King, says Sax, "there isn't anybody who doesn't touch business development at some point." That includes King Jolly, who
says, "We have profiles, certain types of compounds that we look for to meet certain needs of our sales force, that meet revenue
and net-income requirements."
For example, there's Remoxy, the most advanced product currently being developed through the King–Pain Therapeutics partnership.
"What really got us excited about it is the large commercial opportunity," says Steve Andrzejewski. "It has a very high chance
of getting to the marketplace because it's not a new chemical entity; it's simply a new formulation."
King's definition of "R&D" is different than most other pharma companies'. In addition to the $74 million spent in 2005 on
the development of investigational drugs and on lifecycle management, the company spent about $189 million on acquiring rights
to research in progress from third parties.
"What we're doing is avoiding mistakes," Markison says of the company's approach to R&D. "It's common knowledge that there's
a research and development drought in the pharmaceutical industry. But really what that speaks to is compounds coming out
of discovery programs that are designed to feed these very large companies. We're not a discovery-laden company."
King does maintain a small discovery effort, but it exists as a sort of weeding-out tool, mainly for the purpose of helping
commercial operations identify viable business opportunities. "We have the expertise to really understand through due diligence
what we're looking at," says Markison, "and what we're going to take on in partnership mode."