Josef von Rickenbach, the chairman and CEO of Parexel, will retire from his daily CEO duties at the CRO after a 35-year tenure, passing the baton to Jamie Macdonald, who was previously the helmsman of INC Research.
It is the end of an era and the dawn of a new one at Parexel. In 1982, von Rickenbach and chemist Anne Sayigh started Parexel as a regulatory affairs consulting firm, and over the past 35 years, it has grown into one of the world’s largest biopharmaceutical contract service providers with about 18,900 employees and operations in more than 100 countries.
Von Rickenbach has been Parexel’s CEO since the beginning. He led the company through its IPO in late 1995 and more than 40 mergers and acquisitions. Before PE firm Pamplona Capital Management took Parexel private for about $5 billion in September 2017, its annual service revenues reached $2.12 billion for the fiscal year ended that June.
Now looking back, von Rickenbach considers creating and running Parexel an “amazing privilege.”
“I wish I were 25 years younger, I wish I could do it all over again,” he said in an interview with FierceCRO.
“From a tenure perspective, you could almost say it’s about time,” he said. “I’m proud of what we’ve built, I’m very happy with where the company is at, I’m very confident that we’re handing over a great ship to Jamie. It’s a good time. You should never wait with these things until things are bad, you want to do it at the top.”
The long tenure von Rickenbach served draws comparison with Fred Eshelman and Dennis Gillings, the creators of PPD and Quintiles (now IQVIA) respectively, which remain Parexel’s competitors.
Eshelman founded PPD in 1985, brought it through an IPO in 1996, and stepped down as executive chairman in late 2011 when the company was taken private by the Carlyle Group and Hellan & Friedman in an all-cash deal valued at about $3.9 billion.
Gillings incorporated Quintiles in 1982, oversaw its IPO in 1994 and then took it private in 2003. He handed the reins to Tom Pike in 2012 and fully retired as executive chairman at the end of 2015, two years after the company’s second IPO.
Von Rickenbach’s successor Macdonald is no stranger to the top job at a major CRO. He spent 11 years under Gillings at Quintiles before leaving for the COO job at INC Research (now Syneos Health).
INC Research saw strong performance under Macdonald’s leadership as CEO from 2013 to September 2016, including a successful IPO in 2014. The company’s service revenue for 2015, for example, grew 14.2% to $914.7 million, with adjusted EBITDA of $221.4 million, an increase of 52.4% compared to 2014.
As von Rickenbach focuses on building a new world-class board as chairman, it will be up to Macdonald to drive the next stage of growth, starting March 15.
“I’ll support [Jamie] in any way I can, fully well knowing that he’s going to run the company,” said von Rickenbach. “Make no mistake, I’m not a meddler.”
Macdonald said he looks forward to von Rickenbach’s staying on as chairman.
“There’s obviously a lot of corporative history and knowledge that I’m looking to glean. I think probably the hidden thing that is a real plus is Joe’s strategic vision,” he said. “I think he’s been ahead of a lot of his peers and counterparts in anticipating the needs of the industry. If you look at the expansion into Asia, the use of technology, the integration of commercial services alongside clinical, Joe really had seen those trends coming."
Besides increasing R&D spend and continued globalization of the market, Macdonald stressed the use of technology and data as a key industry trend Parexel will continue to capitalize on.
“[Where] Parexel has an excellent position, is really introducing further automation into the process of selecting the right drug candidate, developing the protocol, selecting a strategy that involves countries and investigators, and really finding patients that are protocol-eligible and can be consented and participate in trials around the globe,” he said.
In its recent effort to seek electronic and data excellence, Parexel partnered with Microsoft. As the first milestone of the collaboration, a cloud platform called Perceptive Cloud that hosts Parexel’s informatics solutions has been created.