Chairman and chief executive officer, Johnson & Johnson
Born: November 26, 1948, in Brooklyn, New York.
Education: Quinnipiac University, BS, 1971.
Family: Son of a Broadway stagehand (father) and a theater costume seamstress (mother); married Barbara Dearborn, 1969; children: two.
Career: Johnson & Johnson, 1971–1982, sales and marketing positions with McNeil (later Ortho-McNeil) Pharmaceutical division; 1982–1984, manager of ICOM Regional Development Center in Southeast Asia; 1984–1986, executive vice president and managing director of Korea McNeil; 1986–1989, executive vice president and managing director of Ortho-Cilag Pharmaceutical; 1989–1992, vice president for sales and marketing of Janssen Pharmaceutica; 1992–1995, president of Ethicon Endo-Surgery; 1995–1998, Johnson & Johnson company group chairman and worldwide franchise chairman of Ethicon Endo-Surgery; 1998–2001, member of Johnson & Johnson's executive committee and worldwide chairman of Pharmaceuticals Group; 2001–2002, vice chairman of the board of directors and member of the executive committee; 2002–, chairman and chief executive officer.
Awards: One of two men honored by Chief Executive magazine for heading the Best Company for Leaders, 2003.
Address: Johnson & Johnson, One Johnson & Johnson Plaza, New Brunswick, New Jersey 08933; http://www.jnj.com.
■ William Weldon, who went to work for Johnson & Johnson (J&J) fresh out of college in 1971, assumed leadership of the international health-care giant in April 2002. Weldon became only the sixth chairman in the company's 116-year history and took on the daunting challenge of leading one of America's most consistently successful companies into the 21st century. In Weldon's first full year as chairman and chief executive
officer, J&J posted a profit of nearly $7.2 billion on worldwide sales of just under $41.9 billion. This represented an increase of roughly 9.1 percent in net income and a 15.3 percent increase in total revenue. In leading J&J to yet another sales increase, Weldon honored a long tradition of the company, which had not seen a revenue decline in more than 70 years.
Although Weldon spent his entire working life with J&J, he first attracted widespread attention in the spring of 2001 when, as vice chairman and head of the company's pharmaceu ticals group, he engineered the takeover of Alza Corporation in what was then J&J biggest acquisition ever. Alza, which became a member of the J&J family but continued to operate under its own name, specializes in the development of drug-delivery systems, primarily transdermal patches. Analysts viewed the Alza deal favorably. Jerry I. Treppel, an analyst with Bank of America Securities, told Carey Krause of Chemical Market Reporter that J&J's acquisition of Alza's Concerta, Ditropan XL, and Doxil pharmaceuticals would provide "high-margin, high-growth, new pharmaceutical revenues." Equally positive in his assessment of the deal was David Lothson, an analyst with UBS Warburg, who told Krause, "The acquisition makes terrific sense for J&J and is being done at a price that is attractive for both sets of shareholders" (April 2, 2001).
Johnson & Johnson, headquartered in New Brunswick, New Jersey, is perhaps best known to consumers as the company behind such everyday health-care standbys as Band-Aid bandages, Tylenol, and Johnson's Baby Powder. But J&J is, in fact, a family of more than two hundred operating companies in countries around the globe. Its workforce numbers more than 110,000, about half of whom work in the United States. Founded by Robert Wood Johnson in 1886, the company was family-owned until 1944 when its stock was first offered on the New York Stock Exchange. Although the company is immediately recognizable to the public for its popular over-the-counter health-care products, it also developed and markets such top-selling prescription drugs as Procrit (marketed as Eprex in Europe) for anemia, Remicade for rheumatoid arthritis, Risperdal for schizophrenia, and Topamax for epilepsy.
The son of a Broadway stagehand and a costume seamstress who both worked in the New York theater, Weldon was born in Brooklyn, New York, on November 26, 1948. The family later moved to nearby northern New Jersey, where young Weldon attended Ridgewood High School. A student of no particular distinction during his high-school years, Weldon excelled at athletics and played on the basketball and football teams. After graduating from high school in 1967, Weldon enrolled at Quinnipiac University in Hamden, Connecticut, to study biology. Midway through college, he married Barbara Dearborn, whom he met while in high school, after which, he told BusinessWeek , he grew more serious about his studies.
After earning his bachelor's degree in 1971, Weldon inter-viewed for a job as sales representative with J&J's McNeil Pharmaceutical unit, which is now known as Ortho-McNeil Pharmaceutical. He was interviewed by Howard Klick, who three decades later told BusinessWeek that as part of the process he challenged Weldon to give him a sales pitch on a ballpoint pen. "He was hungry," recalled Klick. "He had fire in the belly" (May 5, 2003). Klick said the young college graduate outdid himself in selling the pen to his interviewer, taking it apart to demonstrate how it worked and extolling its writing properties. Klick hired him on the spot.
After a couple of years as a sales representative, Weldon began climbing the ladder at McNeil, taking on a series of marketing management positions of increasing responsibility. In 1982 he was named manager of J&J's ICOM Regional Development Center in Southeast Asia, a post he held until 1984, when he was named executive vice president and managing director of Korea McNeil. Two years later Weldon was named executive vice president and managing director of Ortho-Cilag Pharmaceutical in the United Kingdom. In 1989 he returned to the United States as vice president for sales and marketing of J&J's Janssen Pharmaceutica.
In 1992 Weldon was appointed president of Ethicon Endo-Surgery (EES), a newly created J&J company specializing in the development and marketing of surgical instruments and related medical devices used in both minimally invasive and traditional surgery. This was a change for Weldon, whose previous J&J experience had been in the pharmaceutical end of the business. But he adapted quickly. J&J had big plans for EES and decided that Weldon was the man to help lead the fledgling company into a leadership position in the field of endoscopic surgery, an area of medical therapy with a vast potential for growth. As J&J infused the new company with millions to get it off the ground, Weldon worked doggedly to make EES a major force in the medical-instruments market.
To develop new products, Weldon brought in a large number of engineers and equipped them with cutting-edge computer-aided design (CAD) systems. He also called on expert counsel from the Harvard Business School to help EES put in place a multifunctional, team-based environment that was able to sharply reduce the time it took to develop new products. To market its rapidly growing product line, the company hired a worldwide force of two hundred sales representatives. In a little over a decade the size of the EES sales team roughly tripled.
Weldon spearheaded EES's drive for market share, traveling extensively to discuss the company's products with surgeons and hospital administrators. According to BusinessWeek , he delayed a flight from San Diego back to EES's Cincinnati headquarters so that he could further press his company's case with a potential customer who was having second thoughts about committing to EES products. During his years with EES, Weldon earned a reputation for setting even higher goals for the company than the top managers back at J&J headquarters in New Brunswick. As Nick Valeriani, vice president of sales and marketing for EES, told BusinessWeek , "We'd have a great year and Bill would say, 'Nice job. Why couldn't it have been 25 percent higher?'" (May 5, 2003).
Weldon's hard work paid off. Under his direction, by 1996 EES had propelled itself into the market leadership position in both endoscopic and traditional surgical instruments, surpassing United States Surgical Corporation, the previous market leader. Although Weldon was a hard taskmaster at EES, he also ensured that his best-performing employees at the J&J subsidiary were amply rewarded and, thus, better able to resist the temptation of offers to go elsewhere. Not everyone flourished under Weldon's style of leadership. Those who failed to adequately convince him of their willingness to be team players, according to BusinessWeek , felt alienated by Weldon. Of his former boss at EES, one former executive told the magazine that Weldon was "an intimidator and a dominator" (May 5, 2003).
In 1995, three years after he joined the newly founded EES as its president, Weldon was named a J&J company group chairman and the worldwide franchise chairman of EES. Three years later he returned to the pharmaceutical side of the company as worldwide chairman of J&J's Pharmaceuticals Group and a member of the company's executive committee.
In the late 1990s J&J's pharmaceuticals business badly needed a shot in the arm. In 1998 five promising drugs on which the Pharmaceuticals Group was pinning much of its hopes for the future were shot down in the late stages of development. According to a report by Robert Langreth in Forbes , new J&J medications for the treatment of stroke and diabetes failed in large-scale human trials, while drugs designed to combat multiple sclerosis and premature labor were rejected by federal regulators. To make matters even worse, J&J lost in a battle over the rights to a new formulation of Procrit, its bestselling anemia medication. Impressed by what Weldon had done at EES, Ralph Larsen, then chairman and CEO of J&J, hoped the Brooklyn native could find a way to reinvigorate the giant company's pharmaceuticals business.
Weldon moved quickly to get the pharmaceuticals business moving again. By the end of 1999 he had helped engineer J&J's purchase of Centocor, a Malvern, Pennsylvania, biotechnology company that had within its product line three drugs of particular interest to J&J. Heading the list was Remicade, which was already being marketed for the treatment of Crohn's disease and was expected to soon receive approval for treating rheumatoid arthritis. The other two drugs were Reo-Pro, an anticlotting medication, and Retavase, a form of tissue plasminogen activator (tPA) used in the early treatment of heart attacks. J&J was also attracted by Centocor's position as the world's leading producer of monoclonal antibodies, technology that could be used as a platform for a wide variety of potential applications. The Centocor deal was valued at roughly $5 billion.
In February 2001 J&J's board of directors elected Weldon and James T. Lenehan, worldwide chairman of J&J's Medical Devices & Diagnostics Group, vice chairmen of the corporation. Under terms of their new appointments, Weldon and Lenehan joined J&J's chairman and CEO Larsen and senior vice chairman Robert N. Wilson in the Office of the Chairman, J&J's top management group. In his new position Weldon continued to be responsible for the Pharmaceuticals Group and the Consumer Pharmaceuticals & Nutritional Products Group but was given the additional tasks of overseeing corporate-business development and the Corporate Office of Science & Technology.
Less than two months after taking over as a corporate vice chairman, Weldon announced an agreement to acquire Alza Corporation, headquartered in Mountain View, California. Ernest Mario, Alza's chairman and CEO, told Paul Jacobs of the San Jose Mercury News that he and Weldon had begun talks only a month earlier about "putting the two businesses together to reach more patients with our products" (March 28, 2001). Under the terms of the acquisition agreement, Alza was to continue operations under its own name from its California base. Weldon said he expected that the merger would create for Alza more markets for its pharmaceutical products as well as new applications within the larger J&J family for the company's drug-delivery systems. The latter segment of Alza's product line included transdermal patches, which deliver measured dosages of medication through the skin, implants, and time-release capsules.
On January 22, 2002, seven months to the day after J&J finalized its acquisition of Alza, Larsen announced that after 13 years at the helm of J&J he was stepping down and would be succeeded as chairman and CEO by Weldon, effective April 25, 2002. Larsen stayed on for a few months after passing the torch to Weldon but left the company completely on July 1, 2002. At the same time Weldon was named to succeed Larsen, the company announced that Jim Lenehan, Weldon's fellow vice chairman, would become J&J's president, succeeding Robert Wilson.
In assessing the task that lay ahead of him, Weldon told Lewis Krauskopf of the Bergen Record that "the challenges are going to be to build on the outstanding record that Ralph [Larsen] has built going forward" (January 23, 2002). Weldon singled out the regulatory environment as one of the more daunting challenges facing not only J&J but the health-care industry as a whole. He pointed to the insistence by federal officials on broader studies with greater numbers of subjects before giving the green light to new drugs.
Although Weldon said that J&J's widely diversified product base would serve it well in the future, many outside observers speculated that the selection of the head of its Pharmaceuticals Group to lead the company offered a clue to the direction in which the company was moving, at least in the short term. Analysts observed that Weldon's selection made sense in view of the large investments J&J had made in its acquisitions of both Centocor and Alza.
Industry observers agreed, however, that Weldon's biggest challenge would be maintaining healthy earnings growth at J&J, a task made progressively more daunting as the company's revenue base continued to expand. The company's performance in 2002, two-thirds of which occurred on Weldon's watch, was reassuring for J&J stockholders. The company posted net income of nearly $6.6 billion on sales of roughly $36.3 billion. Diluted earnings per share in 2002 came in at $2.16, compared with $1.84 a year earlier. This represented an increase in earnings per share of about 17.4 percent, continuing J&J's lengthy string of double-digit annual earnings gains.
Under Weldon's direction, J&J continued to grow through acquisition. By far the biggest purchase during Weldon's first 18 months as CEO came with the news in February 2003 that J&J had outbid two other major pharmaceutical companies for Scios, a major force in the biotechnology industry headquartered in Sunnyvale, California. Although the CEO of Scios, Richard B. Brewer, declined to reveal the names of the other suitors to the San Jose Mercury News , he made it clear that J&J's all-cash offer of $2.4 billion was too good to turn down. The deal represented further expansion into the bio-technology field by J&J and brought into the company's growing family of life-saving drugs Natrecor, a genetically engineered medication developed by Scios for the treatment of patients with congestive heart failure. Under the terms of the acquisition, Scios would continue to operate under its own name in Sunnyvale.
Although they were dwarfed by the Scios deal, J&J made two smaller acquisitions before the end of 2003. In November 2002 the company announced its plan to purchase OraPharma, a small drug company in Warminster, Pennsylvania. Ora-Pharma developed Arestin, a time-release antibiotic used in the treatment of gum disease. Two months later J&J announced that it was acquiring 3-Dimensional Pharmaceuticals, which had developed technologies that J&J researchers felt could be used to enhance the larger company's drug-research capabilities.
In early 2004 Weldon announced J&J net income of $7.2 billion on sales of $41.9 billion for 2003. Diluted earnings per share for the year were $2.40 in 2003, up 11.1 percent from the previous year. Particularly impressive was the company's performance in the final quarter of 2003, when earnings jumped 33 percent to 62¢ per share from 46¢ in the comparable period a year earlier. Of the company's impressive showing, Weldon told the Associated Press that "each of our business segments made important contributions to the overall growth while continuing to invest in building our businesses for the future" ( AP Online , January 20, 2004).
Weldon and his wife, Barbara, lived in Somerset County, New Jersey, not far from J&J's headquarters in New Brunswick. The couple had a daughter and a son. According to a profile of Weldon in BusinessWeek , the J&J CEO maintained a strong interest in basketball. He reportedly insisted on the last-minute addition of a basketball court to plans for a new J&J facility. In November 2003 Weldon was elected treasurer of the Pharmaceutical Research and Manufacturers of America. He was also a member of the Business Council and served on the board of trustees of Quinnipiac University, his alma mater.
See also entry on Johnson & Johnson in International Directory of Company Histories .
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