G&W Laboratories, a small generic drugmaker, recently broke onto the pharma scene publicly with two substantial deals in 10 months for plants and products. The first deal was last summer when it bought an Actavis ($ACT) plant, and this month it announced a deal to do the same with Teva Pharmaceutical Industries ($TEVA).
G&W, based in South Plainfield, NJ, is a fourth-generation, family-owned company founded in 1919 by Carl Greenblatt on his return from World War I. In fact, Aaron Greenblatt, the great-grandson of founder Carl, was named chief executive a couple of weeks ago.
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| Aaron Greenblatt |
In an interview the next day, Aaron Greenblatt explained how it is that G&W is on such a growth trajectory. Last year, the company had 280 employees, all in South Plainfield, and manufactured creams, ointments, gels, topical liquids, and suppositories. By focusing on being the place to go for hard-to-source products, G&W has grown its revenues 5 times in 5 years. That is starting from a small base, he points out, but when the Teva deal closes, it will have tripled its manufacturing and employee base. It will have about 900 employees and plants in New Jersey, North Carolina and Pennsylvania.
The Actavis deal last June was for a plant in Lincolnton, NC, with 300 employees that Actavis was preparing to close. The facility makes some of the same kinds of topical products that G&W does at its New Jersey facility. But it also added oral liquids to its mix. With Teva it got two dozen products from a company that it already partnered with on some products, and it will move G&W into the solid-dose arena. The deal also saves jobs for about 280 Teva employees.
The Actavis deal "was a great opportunity to back up our South Plainfield operations and get into oral liquids and take on a great facility with talented people and a culture of quality and a general culture that is a fit," Greenblatt said. "With Teva, besides a great relationship with a great partner, we think it will lead to more opportunity. It fits our strategy of broadening our base to be more relevant to customers, so that when they think of a quality partner on a tough-to-source generic product, regardless of dosage form, they will know we have it."
Greenblatt says other deals may follow. It is seriously considering ophthalmics and transdermals, products he said fit its "strategy of being the tough-to-source one-stop shop." Sterile injectables have been discussed. While it waits for the right opportunity, he says the company will use the platforms it has and has acquired to drive differentiation in products. "You may see us do something different with a product and put a brand on it," the new CEO said.
"Because we are privately owned, we can wait for the right product, not get into a bidding war for mature products," he said.
To G&W the right deal means not only the right product or products, but also the right culture for any plant or people it takes on. Aaron talks a lot about culture. "We think that is one of our differentiators, so we are putting in an effort to protect and strengthen that," he said.
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| Kurt Orlofski |
There is little question that a company whose core values include things like unity, humility, faith and gratitude, along with growth, ethics and integrity--and which donates 10% of its profits to charity--has given a lot of thought to the culture it embodies. He thinks that is one of the reasons that his small company has been able to attract some big talent, people with a lot of experience with larger companies, like Teva, Pilva, Perrigo, Sandoz and Sanofi ($SNY). That includes its nonfamily president, Kurt Orlofski, who previously was CEO of Wockhardt U.S.
"We don't have all the answers and so we are looking for talented people to help us figure things out," Greenblatt explains. "We have attracted executives who have reached the top ranks in the industry and are looking for an environment with the values they have, and a culture they can survive in. We are a beacon for people looking for a place they can come to work and feel that they make a difference," Greenblatt says sincerely and without embarrassment. "We are a fourth-generation company, so we have no exit strategy and very little bureaucracy. It is affecting people. I know because I not only hear it from the executives we have attracted but from their spouses."
The growth has been transformative. "We have the stability of a fourth-generation company but the excitement of almost a startup. There is a great deal of excitement you don't often see in 100-year-old companies."
-- Eric Palmer (email | Twitter)