Quintiles Transnational Corporation History

Company Perspectives:

Quintiles Transnational Corp. strives unceasingly to exercise strong LEADERSHIP in our industry and to be the unquestioned FIRST CHOICE Contract Pharmaceutical Organization in an increasingly competitive marketplace. We will DELIGHT our CUSTOMERS worldwide with the fullest range and highest quality of information and services, and with a spirit and a DEDICATION that bring professional esteem and admiration. We demand the utmost level of EXCELLENCE, CREATIVITY, and SKILL from all our staff and management so that we add value to our customers by driving to PERFORMANCE goals in ways that are quantifiable. We thrive on continuous IMPROVEMENT and QUALITY enhancements through attention to detail, consistent feedback, state-of-the-art systems, TRAINING and TEAMWORK. We seek unendingly to bring our customers' PRODUCTS and SERVICES to MARKET ever sooner and to play a creative role in their achievement of earlier and greater commercial SUCCESS. Throughout our commercial pursuits, we will respect and hold in esteemed honor our EMPLOYEES, to whom we owe our very existence. We will maintain and enhance our reputation and integrity by demanding the highest possible ETHICAL STANDARDS and demonstrate by example an unyielding dedication to employees, customers, vendors, and shareholders. A SHARED VISION of success among these stakeholders will enhance the quality of life for all people of the world as we vigorously pursue our mission in an era of unprecedented OPPORTUNITY.

Key Dates:

1974:

Dennis Gillings signs first contract to provide statistical and data management consulting for pharmaceutical clients.

1982:

Quintiles, Inc., is incorporated in North Carolina.

1997:

Quintiles completes successful secondary stock offering.

1999:

Quintiles is the first company in industry to break the $1 billion mark, when it reports net revenues of $1.19 billion.

1999:

Company joins the S&P 500 Index.

2003:

Board of Directors agrees to merge with Pharma Services Holdings Inc; Quintiles becomes a private company.

Company History:

Quintiles Transnational Corporation is a comprehensive provider of contract research, marketing, and sales to the global biotechnological, pharmaceutical, and medical device industries. Quintiles also provides a full range of policy consulting and disease-and-health information management services to the international healthcare industry. The services offered by the company include centralized clinical trial laboratory management, data management and biostatistics, regulatory toxicology, pharmaceutical sales and marketing, health economics and healthcare policy consulting, and the development and packaging of clinical trial materials. With offices in more than 49 countries, Quintiles operates through three major groups: Commercialization, which is responsible for strategic marketing services and sales force deployment; Product Development Services, which is responsible for all phases of clinical research and outcomes research consulting; and PharmaBio Development, which is responsible for creating unique alliances that help customers obtain Product Development and Commercialization services. Quintiles has access to unique patient-level healthcare information and data products from Verispan LLC, a joint venture co-founded by Quintiles and McKesson Corporation.

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 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.

Early to Mid-1990s

The growth of Quintiles during the first half of the 1990s was truly remarkable. As its reputation grew, the company began to expand at an unbelievable rate. In August 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 that 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.

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.

Late 1990s to Early 2000s

Quintiles announced in February 1997 that it had become a publicly traded company. Quintiles decided to use its new funds for geographic expansion, service additions, acquisitions, capital expenditures, and other working capital. As a result, acquisitions became one of the company's major activities over the next several years. In fact, in February, the company began its acquisition activities when it acquired Debra Chapman Consulting Group Pty Limited and Medical Alliances Australia Pty Limited, located in Sydney and Melbourne, Australia (respectively). The acquisition helped the company to provide additional contract sales and healthcare recruiting services in Australia and New Zealand. Mid-year, Quintiles bought CerebroVascular Advances, Inc., of San Antonio, Texas, a clinical research company dealing in stroke clinical trials; Butler Communications Inc., of Raleigh, North Carolina, a company that specialized in communication programs to help patient recruitment for clinical trials; and Medical Action Communications Limited, of Egham, United Kingdom, a leading international medical communications consultant. Near year-end, Quintiles acquired Intelligent Imaging, Inc., of Plymouth Meeting, Pennsylvania, an information management company that specialized in digital medical imaging services for clinical trials and the healthcare industry; Clindepharm International Limited and Rapid Deployment Services, both of South Africa, which were the country's leading contract research and contract sales organizations (respectively). Quintiles also opened up offices in Hong Kong; Beijing, China; Moscow, and Mexico City. Quintiles' purchases helped to increase demand for its global services and, as a result, improved its financial statistics.

In early 1998, Quintiles continued its string of acquisitions, which had now made it the world's largest contract researcher, when it acquired Belgium's leading contract sales organization Pharma Networks N.V.; San Francisco, California-based Technology Assessment Group, an international health outcome assessment company; Taiwan's leading contract research organization More Biomedical Contract Research Organization Ltd.; and French T2A S.A., a leading contract sales organization. Mid-year, Quintiles opened a clinical trials and product distribution facility in Singapore; acquired a clinical trial materials production and warehouse facility in Scotland; bought South Africa-based ClinData International Pty Ltd.; and acquired British Cardiac Alert, a provider of a centralized electrocardiogram monitoring service. Near the end of the year, Quintiles acquired The Royce Consultancy plc, a leading British pharmaceutical sales representative recruitment and contract sales organization; New Jersey-based Data Analysis Systems Inc., a major pharmaceutical company specializing in sales force planning and territorial optimization systems; New Jersey-based Simirex Inc. and Simirex International Ltd, which operated clinical packaging services; Paris, France-based Serval, a contract sales and marketing company that expanded Quintiles' ability to provide contract sales services across Europe; and New York City-based Q.E.D. International Inc., a provider of product marketing and communication services. Quintiles also opened offices in Shanghai, China; Bulgaria; Hungary; Israel; and Spo Paulo, Brazil. With numerous major purchases of core businesses and expansions into new strategic areas during the year, Quintiles reported that it made $1.19 billion in net revenues during 1998, becoming the first company in its industry to break the $1 billion mark.

In early 1999, Quintiles acquired a drug development facility from Kansas City-based Hoechst Marion Roussel; Oak Grove Technologies Inc., a major provider in Good Manufacturing Practice compliance services; Scott-Levin, a major provider of U.S. pharmaceutical and managed-care market information and research services; ENVOY Corporation, a provider of healthcare electronic data interchange and data analysis services; and South Africa-based Medlab Pty Ltd., a clinical trial laboratory. During the last half of the year, Quintiles acquired Scotland-based Minerva Medical plc, a clinical research organization that specialized in patient recruitment and management of primary-care clinical trials involving chronic diseases; SMG Marketing Group, Inc., a leading healthcare market information company with healthcare facility databases; New Jersey-based Medcom, Inc., a provider of physician meetings and educational events; MediTrain, the Netherlands' leading multimedia pharmaceutical sales representative training company; and Medicines Control Consultants Pty Ltd., South Africa's leading pharmaceutical regulatory consulting company. Quintiles opened an office in Warsaw, Poland. In November, Quintiles joined the Standard & Poor's 500 (S&P 500) Index, a leading U.S. stock market index, as a healthcare services leader in product development, commercialization, and electronic healthcare transaction processing.

Quintiles realigned its operating units, early in 2000, due to recent changes in the development of drugs and the introduction of new medicines; and their impacts to the healthcare industry. Quintiles added two new units--Early Development and Laboratory Services (which dealt with worldwide preclinical, clinical trial materials, manufacturing and packaging, laboratory, and Phase I operations) and Quintiles Integrated Strategic Solutions (which dealt with services and strategies and that helped Product Development, Commercialization and Informatics)--to its current four operating units (Clinical Development Services, Commercialization, ENVOY Corporation, Quintiles Informatics). In April, CEO Dennis Gillings purchased over 390,000 company shares with the hope of a turnaround with his struggling company that had been plagued over the past year or so with poor performance and badly run units. Gillings, who founded the company, now owned about 5.5 percent of the shares. During the year, Quintiles acquired the clinical development unit of Pharmacia Corporation, a Stockholdm, Sweden-based company. Quintiles opened offices in Norway; Greece; Czech Republic; Romania; Thailand; the Philippines; Chile; and Kobe, Japan. As an industry turndown was occurring, Quintiles made a major reduction in staff positions, along with numerous layoffs, with the hope to help its bottom line.

Pamela Kirby took over as chief executive officer of Quintiles, in April 2001, with Dennis Gillings named as Chairman. Kirby concluded that Quintiles was moving in basically the right direction but was concerned about the company's decline in stock price during the previous year and into 2001. As a result, Kirby began to slowly transfer Quintiles to a more lucrative business, that of contract sales. In addition, after acquiring so many companies over the past few years, Quintiles had become a very large organization when compared to its competition. As a result, its revenue growth had lagged somewhat when compared to its major competitors, especially as the industry emerged from its recent financial slump. In particular, Kirby saw Quintiles struggling with weak demand due to the result of consolidation in the pharmaceutical industry and a reduction in the number of new (developmental) products. During the year, Quintiles opened the Japan International Desk in Princeton, New Jersey in order to expand the Japanese pharmaceutical market. In addition, Quintiles bought Swiss-based OEC SA, a company that provided drug safety services to the pharmaceutical industry; and Pretoria, South Africa-based Ungerer Laboratory and Bavaria pd CC in order to expand its network of centralized clinical laboratories.

In early 2002, Quintiles bought certain assets of Bioglan Pharma Inc., the U.S. subsidiary of U.K.-based Bioglan Pharma Plc. During the middle of the year, Quintiles and McKesson Corporation formed Verispan, an informatics joint venture that became the leading U.S. provider of patient data delivered. Within the year, Quintiles Chairman Gillings announced his intent to buy Quintiles for $1.3 billion. A lawsuit ensued stating that the offer was unfair and inadequate. The board of directors for Quintiles ultimately rejected the offer, but then put the company up for auction.

In April 2003, Pharma Services Holding Inc.--the team formed by Gillings and One Equity to bid for Quintiles--won the auction with a $1.75 billion offer. Later in the year, the Quintiles board of directors agreed to merge with Pharma Services, which resulted in Quintiles becoming a private company led by its founder and chairman Dennis Gillings. As a private company, Gillings promoted the idea that the company could better concentrate on being more long-term oriented rather than being tied down to the uncertainties of short-term quarterly reports. Gillings also vowed to continue to grow the company by purchasing key companies and partnering with drug development firms.

As the largest company in the pharmaceutical outsourcing services industry, Quintiles saw good growth in the first year of being a private company. In the first six months of 2004, Quintiles saw an increase of almost a billion dollars in new business. As a wholly owned subsidiary of Pharma Services, Gillings continued to promote increased business development efforts and to increase its margins in order to maintain its market lead in providing a full range of integrated products and services to the pharmaceutical and biotechnological industries.

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.; Verispan LLC (43%).

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

Principal Operating Units: Product Development Services; Commercialization; PharmaBio Development.

Principal Competitors: Covance Inc.; IMS Health Inc.; PAREXEL International Corporation.

Further Reading:

• "Big Doses of Capital Cure Cash Deficiency," Business North Carolina, February 1998, p. 95.
• "Focused on Increasing Margins: One Year after Going Private, Quintiles is Recording New Business Wins and Service Revenue Growth," R & D Directions, September 2004, p. 66.
• Freudenheim, Milt, "High-Flying Quintiles to Buy Innovex in $747.5 Million Deal," New York Times, October 8, 1996, p. 7D.
• "The Joys of Going Private: So Far, So Good for Quintiles, Whose Founder Couldn't Stand the Public Markets," Investment Dealers' Digest, December 8, 2003.
• Leo, John, "From 'No Man's Land,' He Returns to the Helm," Triangle Business Journal, April 9, 2004, p. 5.
• Marcus, David, "One Equity Partners Dennis Gillings Quintiles," Corporate Counsel, August 2003.
• Nilsen, Kim, "CEO UPS His Stake in Quintiles," Triangle Business Journal (Raleigh, N.C.), June 23, 2000, p. 4.
• "Quintiles Transnational's Chairman's Plan to Buy Company Criticized," Mergers & Acquisitions Report, October 21, 2002.
• "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.
• "A Season of Growth," Economist, February 25, 1995, pp. 5-9.
• Smith, Lisa, F., "Durham, N.C., Marketing Services Firm Reports Record Earnings," Knight Ridder/Tribune Business News, January 26, 1999.
• Vollmer, Sabine, "New Strategy by Quintiles May Pay Off," Triangle Business Journal (Raleigh, N.C.), April 13, 2001, p. 1.
• Weber, Joseph, "Turning Genes into Vaccines," Business Week, June 24, 1996, p. 154.

Source: International Directory of Company Histories, Vol.68. St. James Press, 2005.

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