Filling the Pipeline
Even with antibiotic Augmentin's (amoxicillin/clavulanate) patent already expired and Paxil's patent under challenge, investment
banks report that GSK remains a buy.
Catherine Sohn calls a "team huddle" with (from l to r) Greg Westerbeck, Govind Agrawal, and Kevin Foley, all directors of
worldwide business development.
That's because, according to a Lehman Brothers report, "GSK, by virtue of its sheer size, is becoming more like an industrial
conglomerate that just happens to operate in the pharma industry. Its product portfolio neutralizes it from a significant
hit from any one product, but by the same token, new products also have little influence on growth."
CH is part of that stabilizing portfolio, with well known consumer brands such as Aquafresh, Sensodyne, Nicoderm CQ, Nicorette
(nicotine), and Tums (calcium). "Although it can throw off double-digit profit growth, consumer is a single-digit growth industry,"
says CH president Jack Ziegler. "But it is very different from pharmaceuticals, which has its own set of opportunities and
issues, such as the enormous impact of launches and patent expirations. Some of our businesses are more than 100 years old;
there aren't any pharmaceuticals like that." (See "Brands Your Mother Knew Best," page 32.)
The Consumer Healthcare Executive Management team rendezvous in the UK. Standing (from l to r): Jack Ziegler, John Clarke,
Manfred Scheske, Ray DeRise, Keith Bradford, Bill Slivka, George Quesnelle, Rob Harvey, Ken James.
Sitting (l to r): Ian McPherson, Ellie Barger, Catherine Sohn, and Tom Borger.
Sohn puts it another way: "We're like the bond part of your portfolio-steady Eddie, over the long term, and not as susceptible
to patent expiration."
Sohn's cool description belies the frenetic pace she must maintain to build GSKCH's pipeline, and consequently, its future.
"Now that we're a $5 billion company," she admits, "one small, new-technology licensing agreement at a time will not generate
the kind of growth that we're looking for. We need additional partnerships, global acquisitions, or external Rx-to-OTC switch
For that reason, business development is more important than ever.
"Although our internal research and development resources are important, we are more likely to harness external creativity
than to spend billions of dollars developing it on our own," says Ziegler. "From that point of view, business development
is a key engine to grow the business, and that's why Cathy and her team are so essential."
To HBA, With Love
HBA's 1999 Woman of the Year, Tamar Howson, then senior vice-president and director of business development for SmithKline
Beecham and now senior vice-president of corporate and business development at Bristol Myers-Squibb, says Sohn has the skills
necessary to excel in business development. "Cathy possesses the ability to manage complex projects, has knowledge and understanding
of almost every function within the company, and she has the interpersonal skills to bring together diverse groups and align
them under the same goal. She possesses all those skills to a significant degree, probably because she came to business development
from a marketing background at SmithKline Beecham, where she developed good internal relationships with different functions.
She moved from pharma to consumer, and that seems to have been a very successful switch."
But Sohn believes that the secret to her success lies in the relationships she develops: "I help the company, university,
or researcher feel comfortable giving their 'baby' to us. GlaxoSmith-Kline Consumer Healthcare is a midsize company and the
most important message to convey is that we are big enough to have the research and development, regulatory, sales and marketing
infrastructure, yet small enough to treasure each asset that is made part of the business."
To promote its prescription asthma therapy to consumers, the Advair product team uses Consumer Health Care's best marketing
Strategic partnerships are increasingly a means for two companies to complement each other's strengths. Sohn's enthusiasm
for working with external partners is evident in the way she continues to build on and champion the relationships even after
signing the deal. "Our goal is to bring important new medicines to people while driving our business growth. Working in a
cooperative way with external companies benefits everyone."
Sohn says GSKCH's relationship with Block Drug was instrumental to the acquisition. Since it was Block's product distributor
in France for ten years, Sohn understood the connections between the companies' products and corporate philosophies. She was
able to gain the executive management team's consensus and submit a bid for the company in October 2000, shortly after it
became available. Even more important, those relationships established trust that allowed the acquisition to move forward,
despite the fact that the Glaxo Wellcome/SmithKline Beecham merger was still in progress. That $1.24 billion purchase grew
the business by more than 20 percent, catapulting it to its place among the top three consumer healthcare companies in the
world and to number two in oral healthcare.
New Rx-to-OTC Environment
Ziegler appointed Sohn integration co-leader-an unusual responsibility for a negotiator-because she had already gained the
trust of Block Drug's owners and senior managers.
"Cathy led her team in developing the proposition, helping me sell it to Jean-Paul Garnier and helping us sell it to the board,"
says Ziegler. "Once the deal was signed, she headed the team that made the objectives we promised to the board happen in terms
of timing, sales, and profits."