Monday, March 30, 1998
Chiron Corp.'s incoming president and CEO, Sean Lance, has
accepted what could be the single most interesting job in biotech today. He
is being asked to take a company that Wall Street regards as a slow-growth laggard
with a research operation run more like a university lab than a business, and
turn it into an efficient commercially oriented machine with high growth, high
margins and an exciting pipeline.
In addition to continuing the rationalization of the company's
multiple business units, investors will be looking to see how Lance redeploys
assets, how well he focuses the corporate culture on commercialization while
retaining and attracting top-notch scientists, where he identifies CHIR's competitive
technological advantages, how well he gets the platform working to revitalize
the company's pipeline, and what new opportunities he identifies to partner
or in-license new products.
Lance does not start until May 1, and clearly needs some months
to review the company's programs in detail before making final decisions. But
in a discussion with BioCentury, he outlined his initial thoughts about how
to approach the job ahead. These include identification of CHIR's technological
advantages, more critical review of projects and increased integration between
the company's businesses.
For several years, Wall Street has been saying that the company needs to strengthen its earnings and shed or revamp its less attractive business units. Excluding one-time items, CHIR's income from continuing operations in 1997 was $72 million ($0.41 per share) versus $57 million ($0.32 per share) in 1996. The company had 1997 product sales of $839 million and revenue of $1.2 billion, compared to 1996 product sales of $805 million and $1.1 billion in revenue. CHIR's 50 percent share of the pretax profit from its blood screening business with Ortho Diagnostics Systems Inc., reported separately as equity in earnings of unconsolidated joint business, was about $106 million in 1997 and $102 million in 1996.