Quintiles (NYSE:Q) is now a public company with all of the visibility, scrutiny and required disclosures that come with being public but Chief Operating Officer John Ratliff says that the pharmaceutical services provider is ready.
“From our vantage point, we’re very comfortable in a public setting,” he told WRALTechWire in an exclusive interview. “We’ve been running the company as if it were public when we were private.”
Speaking by phone from the New York Stock Exchange, Ratliff noted the Durham company’s executive team has experience in public companies. He said the company is also prepared for the quarter to quarter expectations that come with being public. While private, Quintiles operated with both a short term and a long term vision.
In today’s IPO, Quintiles registered 23.6 million shares priced at $40 per share, the top end of the company’s targeted range. That total included nearly 4,000 more shares than Quintiles initially planned to offer. At the $40 per share price, Quintiles raised more than $947 million.
Shares ended the day up 5.28 percent at $42.11 with more than 19 million shares traded.
More pharmaceutical outsourcing
The growth of Quintiles has come as pharmaceutical companies’ own cost-cutting efforts meant ratcheting up the outsourcing of various services that they used to do in-house. Quintiles changed as pharmaceutical needs changed. Initially just an outsourced provider of clinical trial services to pharmaceutical companies, Quintiles expanded to become a strategic partner to pharmaceutical companies, taking on a greater role throughout the cycle of drug development and commercialization.
Quintiles believes that the climate for providing pharmaceutical services is strong. CEO Tom Pike, appearing this morning on CNBC, said that research and development spending is stabilizing and more pharmaceutical outsourcing is taking place. Given those trends, Pike said that Quintiles is well-positioned to help pharmas.
“We know we’re successful if we can help them with the probability of success,” he said. “That’s doing a trial faster, doing it more efficiently, helping them make better decisions.”
The company has been particularly active in making acquisitions to round out its service offerings. In the two years leading up to today’s IPO, Quintiles paid more than $280 million buying companies that added to Quintiles’ capabilities in clinical testing, genomics and drug commercialization. Those deals included the $39.7 million acquisition of Durham company Expression Analysis in August 2012, a deal that brought to Quintiles greater expertise in genetic sequencing and advanced bioinformatics.
‘Strategic differentiation’
Ratliff said that Quintiles will not change its strategy now that it is public. But he noted that the needs of pharmaceutical companies are evolving. Quintiles has broadened its portfolio of services with an eye on addressing those needs. The breadth of services that Quintiles offers gives it “strategic differentiation” as a pharma company gauges its needs on issues covering the gamut of consulting, personalized medicine, drug reimbursement and regulatory expertise, and more.
“We’re the only company that can provide that interconnected offering to our customer set to address those demands,” Ratliff said.
Quintiles’ competitors would disagree. CROs such as Covance, Parexel and Wilmington-based PPD are all expanding their offerings as they position themselves as strategic partners to pharmaceutical companies. But Quintiles is by far the largest CRO. In 2012, the company reported $4.8 billion in total revenue in 2012, a 12 percent increase compared to 2011 results. Net income last year was $177.5 million.
Most of the money raised in the IPO will be used to retire debt. But Ratliff said that additional cash from the offering would be invested into the company and could also be used for acquisitions. Ratliff declined to discuss any hiring or expansion plans for the company in the Triangle, where Quintiles already employs more than 2,000. He said that Quintiles does not disclose specific plans by region. But he said that the Triangle’s talent pool has been a robust contributor to the company’s personnel.
