Princeton-based Covance Inc. conducts clinical trials worldwide for pharmaceutical and biotech research companies, and while New Jersey has lost portion of its pharma industry, the state remains an excellent location, Covance CEO Joseph Herring told a meeting of business executives Tuesday evening.
"Within an hour and a half of here, two-thirds of all the decisions for the global (pharma) industry are made — so if you want to see your clients, you might as well be in New Jersey," Herring told a joint meeting of Financial Executives International and ACG NJ at the Westin in Princeton. He said New Jersey is close to "not only the top pharma companies, but also burgeoning biotech companies, midsized pharma companies and specialty companies." Covance, he said, is in New Jersey "to be close to the decision makers in our client organizations."
Herring said the state must focus on stemming the out-migration of the pharmaceutical industry, even as the pharmaceutical industry overall is being transformed from a U.S. industry into a global business. "New Jersey has to offer incredible incentives to keep the nerve center of the pharma industry here. Even though a lot of our work is done in other countries, there is more (pharmaceutical) knowledge in New Jersey than any other place in the world, by far," he said. "So for God's sake, save this industry for New Jersey, no matter what it takes. Because when it leaves, it ain't coming back."
Covance has about $2 billion in annual revenues and about 1,000 employees in Princeton, including about 700 who comprise the global headquarters of the company's clinical trial business. He said Covance does safety or efficacy work for one-third of all prescription medications on the market today, including 38 of the top 40 drugs.
Herring said Covance faced a major challenge when the 2008 credit crisis slashed pharma and biotech spending. Covance decided to wind down portions of its business and focus on clinical trials.
"The good news was that our corporate culture was to take care of clients, so we started growing our clinical and central lab business like no one believed we could grow," he said. He said one of the core principles of the company is to "preserve the opportunity to participate in the market rebound," and to that end, the company is investing $250 million in IT systems. He said preserving future opportunity also means "putting your arms around your best people. Tell them you trust them, you respect them, you care about them and they are important to the company's future. If people know you care about them, they will do unbelievable things for your company."