Chairman and chief executive officer, Abbott Laboratories
Born: 1955, in Minneapolis, Minnesota.
Education: Stanford University, BS, 1978; MBA, 1980.
Family: Married (wife's name unknown).
Career: McKinsey and Company, 1980–1984, management consultant; Abbott Laboratories, 1984–1994, sales manager in medical diagnostics, then various management positions; 1994–1998, senior vice president of diagnostic operations; 1998–1999, executive vice president; 1999–, chairman and CEO.
Address: Abbott Laboratories, 100 Abbott Park Road, Abbott Park, Illinois 60064-3500; http://www.abbott.com.
■ As chairman and chief executive officer of the major pharmaceutical and health-care products company Abbott Laboratories, Miles D. White aggressively pursued new research and acquisitions strategies for his firm. He oversaw a substantial increase in research funding for the development of new pharmaceuticals while trimming Abbott's drug portfolio to focus on the most promising therapies. Under his leadership Abbott's management team was restructured, and working conditions were improved in order to attract and retain the best scientific talent. Analysts and colleagues described White as creative and driven and as an intelligent strategist who was a catalyst for change.
White gained his earliest experiences as a leader when he was a high-school student at Culver Military Academy in Indiana. There White was taught leadership skills based on the servant-leader model, which emphasized the importance of serving others before taking any directive action. He was able to
put these skills into practice in his roles as captain of a sports team and club president. Such opportunities inculcated White with the keen awareness that being an effective leader entailed acquiring an understanding of the needs of others, whether they be fellow team members or stakeholders, and then working to meet those needs.
Although he majored in mechanical engineering at Stanford, White was drawn to leadership positions that inevitably led him in different directions. As a senior White served as the financial manager for all student businesses at Stanford—he was the first undergraduate to ever hold that position. White's taste for executive-level work led him to attend business school, though he remained uncertain about the direction in which he would ultimately go. Rather than accepting a managerial position directly after earning his MBA, White joined McKinsey and Company in 1980 as a consultant. He honed his skills in critical thinking at McKinsey and then looked for management positions in Silicon Valley. He interviewed with the Chicago-based Abbott only as a favor to a mentor; yet Abbott proved to be the first company to offer White a management position, and in 1984 he became sales manager in Abbott's domestic diagnostics division, with responsibility for eight people and $80 million in sales.
White was then promoted through a series of management positions in Abbott's diagnostics division, including in marketing and research, before being named head of the division in 1994. As revenues from diagnostics had been growing at less than 4 percent annually when he took charge, White was aggressive in pushing the division into new markets. In 1996 he spearheaded the $867 million acquisition of MediSense, allowing Abbott to move into the expanding area of blood-glucose monitoring for diabetics. Under his guidance Abbott's diagnostic sales grew 11 percent in 1998—four times the industry average—and the division's overall business grew from $2.1 billion in 1993 to $2.7 billion in 1997 in an increasingly competitive market.
Amid concerns about the firm's earnings growth and its position in relation to larger competitors such as Pfizer, Abbott's chairman and CEO Duane Burnham as well as the president and COO Thomas Hodgson announced their planned retirements in 1998. Abbott set up a horse race for succession by elevating White and two other divisional chiefs to executive vice president positions. The performance of White's diagnostics division was viewed by analysts as relatively flat in comparison to Abbott's growing pharmaceuticals business, which accounted for almost half of the company's sales and profits; White also lacked any pharmaceutical experience and was regarded by many observers as the candidate least likely to be awarded the top job. Despite such predictions White's detailed plan for invigorating Abbott and his confidence in handling pressure impressed the company's board of directors, who ultimately tapped him for the post. In 1999 White assumed leadership of the $12.5 billion firm, where he would face the challenge of reenergizing a company that analysts saw as vulnerable.
Although the company White inherited had produced steady earnings for decades, it had also failed to keep pace with competitors in terms of spending on research and acquisitions. At the time of White's appointment Abbott spent $600 million on pharmaceutical R&D, well under the $1–2 billion analysts thought the company needed to spend in order to maintain a steady pipeline of new drugs. Abbott's existing pipeline was especially tight when White took the reins, with one drug, Hytrin, going generic and production of another, Abbokinase, being halted by the FDA because of manufacturing problems—the two situations together would lead to losses of about $700 million in sales. Unlike other pharmaceutical and health-care product companies, Abbott had yet to pursue any large mergers to either expand its product line or ease pricing pressures.
White quickly took action to address Abbott's research problems, indicating that he would double R&D funding for pharmaceuticals within the first three years of his tenure. To bring discipline to the previously fragmented research program, White restructured Abbott's management team to coordinate research at the companywide level and recruited the well-known scientist Jeffrey Leiden to head the pharmaceuticals group. White's high expectations for results shaped his decision to cut back in fields of drug development that were less promising for Abbott, including cardiology, urology, and renal disease. Most controversially White halted the majority of Abbott's basic research on HIV—beyond the one protease inhibitor already in the pipeline—an area in which he thought the company could not successfully compete. He remarked, "I think if we are going to spend $1 billion on research and development, I should expect scientists who think they are exceptional to do better than come up with a me-too product" (Klein, January 13, 2003).
In order to quiet talk of a looming takeover and further fill Abbott's weak drug pipeline, White pursued an aggressive acquisitions strategy, completing over 60 acquisitions, licensing agreements, and marketing arrangements in the early years of his tenure. The deals included an option to buy 50 percent of SuperGen, a developer of cancer drugs, and a $17 million payment to NeuroSearch A/S for the right to develop its drugs for nervous-system disorders. Not all of White's acquisitions went so smoothly, however: In June 1999 he sought to acquire Alza Corporation, a company with several drug-delivery technologies, for $7.3 billion. The deal collapsed due to antitrust concerns and a drop in Abbott's share price in the wake of FDA sanctions. The failed Alza acquisition along with continuing regulatory problems at Abbott's manufacturing facility raised concerns about White's leadership. Although praised for bringing vitality and initiative to the historically conservative Abbott culture, analysts noted White's rough start and questioned his ability to effectively change the company's direction in a highly competitive environment.
Although doubts lingered about White's leadership, Abbott's stock rebounded by 2001, rising to $50 a share from a low of $29; company earnings rose as well. Hence, despite the collapse of the Alza deal, White was in a position to continue aggressively pursuing acquisitions. In 2001 he successfully engineered a nearly $7 billion agreement with BASF to buy its Knoll Pharmaceuticals division. With the purchase of Knoll, Abbott became the ninth-largest pharamceutical company in the world, up from its prior rank of 14th. Although the deal dramatically increased Abbott's debt while adding only $400 million to its operating income, Knoll brought an interesting drug pipeline that included Humira, a not-yet launched therapy for treating rheumatoid arthritis.
As appealing as drugs like Humira were, White had also sought Knoll out in order to provide Abbott with a global infrastructure and expanded R&D capacity, including a new manufacturing facility in Massachusetts. After the acquisition White and his management team were under pressure to quickly integrate the two firms in order to move Humira quickly to market. As described in Pharmaceutical Executive , analysts credited White and other Abbott executives with facilitating a smooth transition through their careful hands-on approach and "commitment to preserving and empowering personnel" (December 2003). Humira was successfully launched in early 2003, with sales projected to reach $650 million in 2004.
Along with acquiring other firms, White strongly emphasized the importance of attracting and retaining the best scientific talent. He improved working conditions at his company by increasing vacation time and adding child-care services. As was consistent with his own informal style, White ordered the construction of volleyball and soccer fields at Abbott headquarters. To create a workforce that better reflected the company's stakeholders, White oversaw a number of diversity initiatives, increasing the number of minority personnel in management positions by 78 percent in five years and fostering leadership opportunities for women. Abbott was named to Fortune 's list of the "50 Best Companies for Minorities" every year since the list was conceived in 1998; the firm was also placed among the top 10 on Working Mother 's list of the best companies for working mothers.
After several years of acquisitions and a ramping up of research operations, in 2004 White announced that no new major purchases lay in Abbott's immediate future. Still White began the year with the $1.2 billion acquisition of TheraSense, the maker of diabetic testing tools, moving Abbott from the number-five to the number-three position in the blood-glucose monitoring market. In lieu of looking for more external opportunities, White then focused on consolidating Abbott's operations to concentrate resources on core areas of strength—a strategy which entailed spinning off the $2.5 billion hospital-products division, Hospira. After years of struggling to meet regulatory standards, Abbott was informed by the FDA in 2004 that its manufacturing facility was largely in compliance with industry regulations, allowing the company to move forward with its medical-diagnostics division. Although analysts remained uncertain about the long-term effects of White's strategies, several agreed that Abbott was strong enough to no longer be considered a serious takeover target and that White's aggressive and creative leadership had made a substantially beneficial impact on the company.
See also entry on Abbott Laboratories in International Directory of Company Histories .
Barrett, Amy, and Richard A. Melcher, "Drugmaker, Heal Thyself," BusinessWeek , October 11, 1999, p. 88.
Burton, Thomas M., "Abbott's White Wins CEO Job: Clark to Leave," Wall Street Journal , September 16, 1998.
Clinton, Patrick, "From Good to Great, Act Two," Pharmaceutical Executive , December 2003, pp. 42–52.
Gibbs, Lisa, "Building a Promising Pipeline," Money , February 2003, p. 48.
Klein, Sarah A., "Medicine Man," Crain's Chicago Business , January 13, 2003, pp. 1, 4.