Editor’s note: WRAL TechWire offered an inside look at Fortrea and its plans on June 7. This story is being reposted. to reflect Monday’s news that the spinoff from Labcorp is complete.
RESEARCH TRIANGLE PARK – So what does former Quintiles CEO Tom Pike have in mind for his new job as CEO at Labcorp spinoff Fortrea? Wall Street got a sneak preview in early June.
The Labcorp spin-off of its Clinical Development business hosted an investor call to share details on the new company, named Fortrea. The call included an opening overview of the new company and its positioning by CEO and Board Chairman Pike. Chief Operating Officer Mark Morais, Chief Medical Officer Oren Cohen, and Chief Financial Officer Jill McConnell also joined, among others.
According to Pike, the CRO (Contract Research Organization) plans to differentiate itself from its competitors by interviewing key members of the pharma industry and refining strategies to address pain points. New technology and a focus on data and analytics will also be priorities. The company plans to partner with a diverse pool of pharma companies, big and small, with investments in a variety of therapeutic areas.
A Focus on Culture
One of the points of differentiation is the investment in “magnet” expertise, which Pike defined as “hiring people that are so impressive that they’re a magnet for our sponsors to work with.”
Expertise also ties into the culture of the new company, a topic Pike returned to frequently. He sees culture as a major competitive advantage for the new organization.
“One of the unique things that we get to do, is we get to rebuild a culture,” said Pike. “As good as the Labcorp culture is, we’re gonna pull the good stuff, the ethics, the integrity, the focus on science from the Labcorp culture and we are going to develop a world-class service culture to serve bio-pharma.”
Pike spoke about the potential of the employees to contribute to the new culture. “We will be one of the best places to work in this industry.”
Pike also sees the company as being at an ideal scale. Currently between 19,000 and 20,000 staff, the organization is at a “Goldilocks” size, according to Pike. There’s enough staff to get the job done but not so many layers that leadership isn’t attuned to the organization. This provides the opportunity to be very effective for smaller biotech companies as well as Big Pharma.
“Not too big and not too small,” said Pike.
Pike sees the company at a pivotal moment with lots of room for growth ahead and shareholder value. Labcorp and the new Fortrea company are already heavily involved in Oncology but plan to diversify into rare and neurodegenerative diseases, cell and gene therapy, and medical devices, among other areas. In the near term, the company will work on improving margins and moving into its own unique focus.
The new Fortrea represents Labcorp’s wholly-owned Clinical Development business and will be offered to shareholders through a tax-free transaction. The result will be two independent, publicly-traded companies, Labcorp (LH) and Fortrea (FTRE). The spin-off is currently expected to complete in mid-2023, subject to final approvals by the Labcorp board and the SEC.
Fortrea will focus on providing Phase I-IV clinical trial management, and market access and technology solutions to pharmaceutical and biotech organizations on a global scale.