A conversation with Patheon’s interim CEO
Contract Pharma
Peter Bigelow was named interim chief executive officer of Patheon on Dec. 1 of 2010, less than a year after joining the company. We met a few days later at Patheon’scommemoration of its facility expansion in Manati, Puerto Rico. At that time, we had an informal conversation about his new role and his 28-year career in large pharma prior to Patheon (see Biographical Note), then spoke on the phone a few weeks later for the following interview.
Speaking at the Manati expansion event on December 6, Mr. Bigelow remarked, “Last week our board of directors made the decision to change the top leadership at Patheon. They asked Wes Wheeler to leave the company and named me interim chief executive. While this change may appear to be abrupt, I can assure you that the transition has been smooth, well thought-out, and seamless. The board made this change to ensure that we have the leadership to capitalize on our successes to date and build a sustainable, long-term future.”
He added, “I’m personally honored that the board chose me and showed their confidence in allowing me to lead the company as it conducts its search for a permanent CEO.”
During our initial chat, Mr. Bigelow stressed that the “office of the president” would enable that seamless transition, and repeatedly praised the team around him. “We’ve got the best people in the industry,” he told me. —GYR
Contract Pharma: It’s been a few weeks since you took over the reins at Patheon. How’s the transition going?
Peter Bigelow: I’ve been really busy, but I feel that it’s gone extremely well. Our employees are incredibly supportive. People are taking this change in stride. We had a meeting with our board last week that went very well. I’ve spent a lot of time talking to our customers and explaining the change. It’s important to let them know that there’s no change to the rest of the team, and no change to our strategic plan. I’m really pleased with the way all parties have responded.
CP: As the only publicly-held pure-play CDMO, Patheon sees its finances and performance held up to greater scrutiny than that of its competitors. Do you think that this transition is also being held up to a microscope?
PB: There are some aspects of being public that do require quicker disclosure and more transparency, but it’s hard for me to say. I’ve never gone through something like this with a non-public company.
CP: Your history pre-Patheon is on the sponsor side. Particularly, you came from Wyeth, which was outsourcing 100% of its APIs and also outsourced a good portion of its OTC products. How does that experience inform your role on the provider side of the equation?
PB: I think I have a really good sense for what’s important, on the customer side of things. I’m accustomed to the focus on reliability and quality that’s so important to customers. Sure, in the end, there’s lots of negotiation around price, but unless the provider has developed a reputation for reliability, consistency, and high quality, a customer isn’t going to be willing to hand over the family jewels. That’s probably the biggest thing for me: really understanding the importance of reliability. We may seem to spend more time talking about price, and timelines and delivery issues, there’s a much higher set of values that a provider needs to have in order to get customers to do business with them.
CP: What progress is the company making in Puerto Rico? You recently commemorated the expansion of the facility in Manati.
PB: As you saw during your visit, we continue to get Manati ready for producing the products currently made in Caguas. That process is going quite well. The one piece of breaking news I can share is that one of the products we make in Caguas has received extended regulatory timelines. It’s a complicated product that’s sold in many markets. As our customer has
dug into what it will take to get its site changes approvedin those markets, it’s going to take longer than we thought for the transfer.
Other than that, the operation ins Puerto Rico is running well, and the technical part of the moves is going well. Validation batches are progressing, we have product down in stability, we’re moving a lot of operations one at a time, and that’s going quite well.
CP: Does your operations background help give you perspective on operational hurdles like this?
PB: Maybe I’m a little biased, but I think I have good background for what we’re doing these days. I’ve spent most of my career in manufacturing, and in plants, assessing issues and solving problems. I think the background I have is pretty useful for the company right now. We have a lot of execution in front of us, to improve productivity, bring on the right talent, focus our priorities and make the right investments. I think having a strong operations background is very important to help lead Patheon at this point.
CP: How difficult is it to balance the tactical aspects of operations with guiding the strategic role of the company?
PB: I think there’s a lot to it. We have a very strong PDS [Pharma Development Services] business, so it’s important to make sure that’s on the right track for growth. At the same time, you have to make sure the plants are running well and that the right manufacturing strategies are in place. I’ve been around the business enough to be comfortable in all aspects of the business we’re in. I certainly have a very good staff around me. The people in our organization are really pulling their weight in their segments of the business.
CP: Where’s the biggest area of growth for Patheon?
PB: First, there’s the idea of really partnering with some customers, to the point at which we move from transactional to real strategic partnership. For some of the big pharmaceutical companies, we can look at big bundles of product. That’s a real opportunity and we have to continue to get to those relationships. The other thing is continuing to build on our PDS momentum. So we have to build strategic partnerships as the consolidation of the pharma business really gets serious, and we have to keep building our reputation and reach in the development business.
CP: What impact do you think we’ll see from more “big pharma guys” like you moving into the contract services side of the business? Do you think there’s any “brand recognition” that goes with long-time veterans, to the point at which it might influence a pharma company’s outsourcing decisions? I mean that in a “I know Pete! He’s someone we can do a strategic partnership with!” way.
PB: I think there needs to be a level of credibility within the CMO market. When I look around, I do see some really good experience among a number of CMOs. I don’t think it’s a new concept necessarily, but I do think there’s a benefit to that notion of having credibility, of bringing in customers, of having those instincts about what’s important to a pharma company.
CP: Do you think any segments of the CMO business are capable of seeing double-digit jumps in revenues?
PB: The macro view is important. We all have to ask, “What’s the pharma industry in general going to do?” It seems like that growth isn’t there in the pharma industry overall. That said, there may be some pockets of innovation, such as prefilled syringes, some areas where having made the right strategic decisions might enable some CMOs to see that level of growth. It’s all about making the right decisions, in terms of investing in capabilities.
CP: Best of luck with the transition!
PB: Thank you very much!
Gil Roth has been the editor of Contract Pharma since its debut in 1999. He can be reached at gil@rodpub.com.