Quintiles Transnational Corporation - Company Profile, Information, Business Description, History, Background Information on Quintiles Transnational Corporation

4709 Creekstone Drive
Riverbirch Building
Suite 300
Durham, North Carolina 27703-8411

Company Perspectives:

As an ethical, competitive, and profitable company, Quintiles' mission is to advance scientific knowledge for improved health care.

History of Quintiles Transnational Corporation

Quintiles Transnational Corporation is one of the fastest growing full-service providers of contract research, sales, and marketing to the international pharmaceutical, biotechnology, and medical device industries. The company also offers a wide array of policy consulting and disease and health information management services to the worldwide healthcare industry. Quintiles' broad range of product development services include clinical trial management, pharmaceutical sales and marketing, data management and biostatistics, regulatory toxicology, centralized clinical trial laboratory services, health economics and healthcare policy consulting, and the formulation and packaging of clinical trial materials. With its headquarters near Research Triangle Park in North Carolina, the company has more than 60 offices with over 8,200 employees in 22 countries, including Argentina, Austria, China, Finland, India, New Zealand, Scotland, Singapore, South Africa, and Japan. In 1996, Quintiles provided services to 11 of the world's largest biotechnology firms, and 49 of the world's 50 largest pharmaceutical companies. Perhaps most impressive of all the company's achievements is its average net revenue growth rate which exceeded 50 percent from 1992 to 1997.

Early History

The founder of Quintiles Transnational Corporation is Dennis B. Gillings, a native of London, England. Having received a Diploma in Mathematical Statistics from Cambridge University, and a Ph.D. in Mathematics from the University of Exeter, in 1971 Gillings decided to leave England and accept a research and teaching position at the University of North Carolina at Chapel Hill. As a professor in the Department of Biostatistics, Gillings published extensively in academic, scientific and medical journals. In 1974, looking for a way to apply his research to a practical problem, Gillings signed his first consulting contract with a large European pharmaceutical company to compile data about, and analyze the performance of, one of its newest products. Gillings was soon providing statistical consulting for clients throughout the world on a regular basis.

From 1974 to 1982, Gillings and a growing part-time staff provided contract services in the field of statistical consulting for a large number of firms in the pharmaceutical industry. It was during that time that the "contract research organization" (CRO) industry began to develop. Initially, contract research organizations were formed to provide the pharmaceutical and biotechnology industries with independent product development services. In order to manage the drug development process more efficiently, and to lower costs and maximize profit, the large pharmaceutical firms and biotechnology companies began to outsource product development to contract research organizations. Deriving all of their revenues from the research expenditures set aside in the research and development budget of pharmaceutical and biotechnology companies, the contract research organizations grew rapidly. Early on, the CROs primarily provided pre-clinical trial services but during the late 1970s and early 1980s, CROs developed into full-service providers, offering not only pre-clinical trial services but clinical and post-clinical marketing services for the introduction of new drug therapies.

Because of the direction of his research, and his extensive European contacts, Gillings was poised to take advantage of the emergence of the contract sales industry during the early 1980s. Originating in the United Kingdom, where regulatory cost containment pressure was brought to bear by the British government, pharmaceutical firms were forced to search for more cost-effective methods to introduce and market new drug products. As a result, pharmaceutical companies throughout the United Kingdom started to outsource all of the sales and marketing activities related to the introduction of a new product.

Recognizing the trends in the marketplace, and knowing his own talent for providing statistical consulting to pharmaceutical companies at a cost-effective price, Gillings decided to establish his own firm. Incorporated as Quintiles, Inc. in North Carolina in 1982, the small firm was staffed by Gillings himself and a few part-time employees, mostly those whom he had already worked with at the University of North Carolina. Gillings correctly predicted the worldwide spending increase on the development and introduction of pharmaceutical products. As the competition among pharmaceutical companies became more intense during the early and mid-1980s, he created a firm with a focus on innovation, highly focused research and development, rapid product introduction, and cost-effectiveness. These attributes were valued by pharmaceutical firms which were looking to maintain or increase their market share. By 1985, Quintiles, Inc. had arranged to provide contract services worth millions of dollars to a number of large pharmaceutical firms in the United States.

Expansion and Development in the Mid- to Late 1980s

During the mid- and late 1980s, under the leadership of Gillings, Quintiles embarked on a major expansion plan, both within the United States and in Europe. In January of 1987, Quintiles Ltd. began operations to serve clients in the United Kingdom. Originally established in London, the company's office moved to Reading in 1989 to take advantage of greater office and laboratory space, a move that resulted in considerable expansion of Quintiles' British operations. In 1988, the company opened an office in Cambridge, Massachusetts to provide contract services to pharmaceutical and biotechnology firms located in the northeastern section of the United States.

By the end of the 1980s, Quintiles was providing a range of contract services to assist companies in converting a laboratory discovery into a product that was ready for sale in the marketplace. Before a new drug can be marketed, it must undergo extensive testing and approval by the appropriate regulatory agencies in the country where it will ultimately be marketed and sold. The initial stage of the drug development process is pre-clinical research. During a period of one to three years, the new drug is tested on animals. After this period, if the drug is determined to be safe for human consumption, it undergoes a series of clinical tests on human beings. Tests on human beings usually are conducted in four phases including: phase I, in which the drug's safety is monitored and its pharmacological data is gathered over a period of six months to one year, having been tested on between 20 to 80 individuals; phase II, in which the drug is tested on approximately 100 volunteer patients in order to determine its effectiveness and dosage response; phase III, in which the drug is tested on thousands of people in order to determine its safety and efficacy on a large scale; and finally phase IV, which takes place only after a country's regulatory approval, in which the drug is tested once again to prove its safety, to determine new dosage strengths, to confirm its cost-effectiveness, and to analyze data on its long-term safety when used by patients under normal circumstances.

Quintiles specialized in contracting clinical trial services, including pre-clinical research and the four phases of a drug's testing in areas such as endocrinology, gastroenterology, and genitourinary and musculoskeletal diseases. Quintiles provided such services as: study design, in which the company designed and prepared the initial drug study; investigator recruitment, in which the company arranged physicians to administer the drug to patients; study monitoring, in which the company made an investigational site analysis, assisted in patient enrollment, and collected data from the test; and clinical data management and biostatistical services, in which Quintiles employees created customized databases in order to meet the specific needs of client formats. By the end of the 1980s, Quintiles was one of the fastest growing and most respected of all of the contract research organizations.

The 1990s and Beyond

The growth of Quintiles during the 1990s was truly remarkable. As its reputation grew, the company began to expand at an unbelievable rate. In August of 1990, Quintiles Pacific, Inc. was established to provide contract services for the biotechnological and pharmaceutical firms in the western United States and around the Pacific Rim. In November of the same year, Quintiles Ireland Ltd., was established in Dublin, and a joint venture was formed with CRC Research Institute to market the company's contract services to pharmaceutical firms in Japan. As the activity of the company grew, management decided to form a holding company, Quintiles Transnational Corporation, located in North Carolina, to provide a headquarters for the co-ordination of all of its offices worldwide.

In 1991, Quintiles GmbH was established in Germany to augment the company's contract services to European clients, and Quintiles Laboratories, Ltd. was created in Atlanta, Georgia to provide contract clinical trial laboratory services to companies that were developing healthcare products. In 1992, the company established Quintiles, S.A. in Paris to augment its contract services to clients in southwestern Europe, and also acquired Toxicol Laboratories, Ltd., a British-based international contract toxicology laboratory. Quintiles Australia Pty., Quintiles Asia, Inc., Quintiles Belgium, S.A., and Quintiles S.r.l., located in Milan, Italy, were also formed to expand the company's operations worldwide.

In 1995, in addition to opening an office in Copenhagen, Denmark, and establishing Quintiles East Asia Pte Ltd. in Singapore to provide contract research services to firms in that region of the world, management implemented a highly aggressive acquisitions policy. In March of that year, the company acquired Syntex Pharmaceuticals Ltd., a well-known pharmaceutical and biotechnology product development firm based in Edinburgh, Scotland. Combining the pre-clinical services of the company's operation in Ledbury, England with Syntex Pharmaceuticals, Quintiles was able to provide its worldwide customers with an extensive range of pre-clinical and toxicology contract services. Syntex, one of Quintiles most important acquisitions, specialized in identifying, quantifying, and evaluating the risks to human beings that result from the production or use of biotechnology or pharmaceutical products. In addition, the company purchased Benefit, a health economics firm with offices in France, Germany, Italy, France, and The Netherlands, and San Diego Clinical Research Associates, a world-renowned clinical research organization that concentrated on the regional monitoring of allergies and of infectious and respiratory diseases.

Continuing its frenetic pace of growth and expansion, in 1996 the company opened offices in Pretoria, South Africa, Vienna, Austria, Helsinki, Finland, Madrid, Spain, and Buenos Aires, Argentina. Acquisitions included The Lewin Group, Inc., a Fairfax, Virginia-based healthcare policy research and consulting company with a global reputation, and PMC Contract Research AB located in Uppsala, Sweden, giving the company the ability to provide contract drug development services to all of the Scandinavian countries. Quintiles' two most important acquisitions in 1996 were BRI International and Innovex Ltd. BRI International, based in Arlington, Virginia, is a leading international contract research company specializing in regulatory compliance consulting and medical device development. Innovex Ltd., located in Marlow, England, is one of the world's leading contract pharmaceutical firms which specializes in the sale and marketing of drugs for international pharmaceutical companies. The acquisition of Innovex made Quintiles the world leader in providing contract services to pharmaceutical, biotechnology, and healthcare companies around the globe.

With such a worldwide network of companies and offices, Quintiles management thought it best to reorganize the company in order to integrate its holdings and take advantage of the synergies that each acquisition and office provided. Company operations were organized into three operating divisions: The Contract Research Division, which provides services such as those involved in clinical trials, regulatory affairs, and medical device consulting; The Innovex Division, which provides the company's marketing and sales services; and The Lewin-Benefit Division, which provides services in the areas of health economics and healthcare policy consulting, and disease and health information management contract services. This reorganization enabled the company to provide full-service, vertically integrated, product development, sales, and marketing services to all of its clients worldwide.

Through the mid-1990s, company revenues increased at a phenomenal rate, making Quintiles one of the most highly regarded firms in the contract research services industry. The company's stock has become the darling of Wall Street as stock brokers and analysts see its future promising even more success than its past.

Principal Subsidiaries: Butler Clinical Recruitment, Inc.; The Lewin Group, Inc.; Medical Technology Consultants; Quintiles, Inc.; Quintiles Canada, Inc.; Quintiles Laboratories, Ltd.; Quintiles Latin America, Inc.; Quintiles Pacific, Inc.; Benfit B.V.; Innovex (Spain) S.L.; Medical Action Communications, Ltd.; Quintiles AB; Quintiles England, Ltd.; Quintiles Ireland, Ltd.; Quintiles Scotland, Ltd., Quintiles S.r.l.; Quintiles Laboratories, Ltd.; Quintiles Asia, Inc.; Quintiles East Asia Pte. Ltd.; Quintiles Pty. Ltd. (Australia); Quintiles Hong Kong, Ltd.

Principal Divisions: Contract Research; Innovex; Lewin-Benefit.

Additional Details

Further Reference

"A Season of Growth," The Economist, February 25, 1995, pp. 5--9T.Freudenheim, Milt, "High-flying Quintiles to Buy Innovex in $747.5 Million Deal," New York Times, October 8, 1996, p. 7D."Medical Action Is Acquired for $37.6 Million in Stock," Wall Street Journal, June 12, 1997, p. 11A."Quintiles Completes Purchase of Innovex," New York Times, November 30, 1996, p. 41."Quintiles Transnational Corporation," New York Times, March 3, 1997, p.10D."Quintiles Transnational Corporation," Wall Street Journal, August 1, 1996, p. 4B."Quintiles Transnational Plans to Buy BRI International," New York Times, August 1, 1996, p. 4D.Weber, Joseph, "Turning Genes into Vaccines," Business Week, June 24, 1996, p. 154.

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