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Julian Upton is Pharmaceutical Executive's Online and European Editor. He can be reached at firstname.lastname@example.org
Envigo's new CEO shares with Pharm Exec his vision for the company’s future, the changes he’s seen in the industry, and his thoughts on that thorny subject, Brexit.
Dr. Adrian Hardy the UK-based products and research services company Envigo in 2002 and has held leadership roles in business development, sales, corporate development and strategic marketing. Previously he spent three years in product management for a subsidiary of Novartis and two years as an entrepreneur. He took over as CEO of Envigo earlier this year. Here he shares with Pharm Exec his vision for the company’s future, the changes he’s seen in industry, and his thoughts on that thorny subject, Brexit.
PE: What is your vision for Envigo going forward?
Adrian Hardy: The creation of a new vision and mission for our new company was crucial, and so we spent considerable time and effort making their development a bottom-up process with employee input from across our business. The vision we created together is “Working together to build a healthier and safer world.”
We aim to make Envigo a billion-dollar research partner to our customers, on par with the other market leaders in our segment. We are currently the third largest non-clinical CRO globally, but our ambition is to be #1.
What is distinctive about the culture of your company?
One of the most important is our “customer-centric” approach to managing customer relationships. This was one of the things that inspired us to create Envigo – the opportunity to merge the recognized scientific and technical quality, plus the customer-centricity of the two originator companies in order to create something stronger for the new company.
Another distinctive aspect of our culture is a focus on continuous improvement. We constantly analyze our processes, technologies, and resource deployment to improve our customers’ experience. One of our company values is “Always learning, challenging and improving” and we believe that this, along with targeted investments in people, process and customer relationships, will help us grow and succeed on our continuous improvement journey.
One more foundational aspects of our culture I’d like to share is our effors to take every measure we can to improve our market leading position in animal welfare. Envigo breeds laboratory animals and uses them in much of our contract research. We believe we have a moral responsibility to ensure the welfare and treatment of our animals.
What for you have been the key changes in the UK pharma sector since you began working in it?
One of the major changes is the dramatic growth in the development of biologics. In the 1980s-90s, it is estimated that 5-15% of all drugs in the pipeline were biologics, and today that’s in the 35-45% range, depending upon your source of information. This growth was driven by the completion of the Human Genome Project which has resulted in a pronounced focus not only on understanding the role of chemistry in the drug development process, but also on biology and genetics, which has opened up many new avenues of research. We have had to transform our organizations dramatically to keep pace with the changes. For example, we now hire far more scientists steeped with knowledge of biology and genetics. We also have had to broaden our service offerings to satisfy customers’ needs for expertise in biologics. And since biologics require different means of handling and testing than chemical entities, we have had to change our processes, technologies, and analytical methods dramatically in the past 20 years.
Tied closely to the revolution in biologics is the progress we have seen in personalized medicine and translational R&D. Increased knowledge of biology and genetics has again been a catalyst. The advances in diagnostic testing, such as biomarkers, imaging, and companion diagnostics have accelerated the development of personalized medicine and translational R&D - it really is quite exciting!
On the commercial side of drug development, there has been a significant increase in the outsourcing of R&D. Outsourcing R&D has helped many pharma companies manage their fixed costs better and focus more on their core competencies: discovering and marketing biopharmaceutical products. It has also empowered companies to find “best of breed” vendors possessing specialized expertise and capacity to manage studies efficiently and effectively.
Finally, we have witnessed an increased focus by payers to reduce the costs of medicines. This pricing pressure in the market has motivated pharmaceutical companies to find better and more efficient ways to bring drugs to market. And it has also caused them to challenge the development of “me too” products in pursuit or novel therapeutics that may have an increased impact on the health of people worldwide. The effects of pricing pressure and advances in technology have together encouraged pharmaceutical companies to make more informed decisions on the drugs they choose to advance through development.
What have been the valuable lessons you’ve learnt during your previous roles with Envigo’s predecessor company?
I have been very fortunate to be part of one of the leading non-clinical CROs in the industry for 15 years. I started out in sales, and I learned directly from customers what they seek in a CRO and what their specific needs are during their interactions with us. There is no better way to learn about a business than directly from its customers. One of the most important lessons I learned was how much customers value an honest and transparent relationship with their CRO. This is fundamental to the trust they have in our relationship with them and has profoundly influenced the way I will lead our company. As CEO I want our customers to be secure in the knowledge that Envigo will care for their molecule as though it were our own.
Another key lesson I learned early on is that customers have unique needs – that depends on the size of their firm, the type of molecule they are developing, the timelines and budgets they must adhere to, and so on. You should never make assumptions, but often a small biotech’s needs differ from a large pharma, in the sense that smaller firms generally require more consultation and advice from their CRO. And smaller firms frequently have more at stake. They may have very few molecules in development, so each one takes on a greater importance, and in some cases can make or break their company.
How have mentor relationships contributed to your career choices and progress?
Probably the most influential mentor in my career has been Brian Cass, our former CEO and now Chairman of the Board at Envigo. Through the 14 years I’ve worked alongside him he has steered the company through a going-private transaction, a significant global recession, and a major acquisition and integration of a company 50% bigger than we were at the time. Throughout, Brian’s example taught me how to manage success as well as hardship. For example, in late 2008 the market collapsed as a storm of events in both the pharmaceuticals industry and the global economy brought the preclinical CRO segment to a standstill. During that period all of the major CROs had to find ways to reduce costs, drive revenues in the worst of market conditions, and simply survive. At his side, I learned first-hand how to manage through the tough times, which included enacting a series of cost-cutting measures that were necessary to insure our survival. And due to all these efforts that Brian led, we lived to see another day.
Following the market collapse, when recovery seemed in hand, I was Brian’s partner as we started to ramp up our capacity and prepare the company for better times. We developed a growth strategy, internally and externally, looking for new opportunities to grow our revenues and profits. This led to the Harlan acquisition in 2014. It was a huge and complex challenge, but we accomplished it in near record time. Less than a year and half later we had successfully integrated all of the assets of the two major businesses, including subsidiaries.
Finally, do you have any thoughts on Brexit you’d like to share?
Firstly, absenting the complex negotiations that are yet to take place between UK and the EU, we are all still at the speculation stage as to what the impacts may be to our industry or our customers. There are, of course, a few areas in particular where we are watching developments with interest. The UK academic sector receives around $1bn in R&D funding per year from the EU across many initiatives, most of which would likely stop. This is already being highlighted to the UK government, with industry bodies calling for them to earmark some of the contributions they will not be making in future to cover this shortfall.
Probably the main area we are watching for the future is the free movement of labor. We sometimes move employees between our UK and European sites both to make flexible use of our resources, and to provide opportunities for career and skill development. If the UK was to have similar freedom of movement provisions to those existing now (such as EEA membership), there would be little change. If not, permission to work may be required both for those entering the UK and British citizens working in the EEA. We do anticipate that, at the least, this process could become more bureaucratic in the absence of alternative agreed measures.
So we see there is much uncertainty, and we continue to monitor our business for potential Brexit impacts, and will develop strategies to manage whatever outcomes arise. We remain optimistic that no matter the outcome we will find ways to continue to grow and protect our business.