In 1987, a small team of pioneering young researchers working in the Philadelphia region launched Cephalon with the vision of building an integrated biopharmaceutical company with a presence in major markets around the world. Among the pioneers was Dr Frank Baldino Jr, now CEO and chairman of Cephalon, who decided that the company should be located in the Philadelphia suburb of West Chester.
“The reason I put the company here was access to venture capital,” he says. “When I started Cephalon 17 years ago, there were precious few venture capital dollars in the region. Most money came out of California, which was the big Mecca for biotech thanks to companies like Amgen and Chiron. But I put the company here because I live here and, second, the technology was here.
“Plus there are more medical schools in the City of Philadelphia than anywhere else in the world.”
Being one of the first small-molecule biotech companies in the business, Cephalon needed access to those medical schools. It also needed chemists, of which there were plenty in the region due to Dupont, the mammoth chemical producer, being nearby in Wilmington, Delaware.
“The biotech industry employed very few chemists in the early days,” Dr Baldino reflects. “Our approach was to use a small-molecule process to make drugs. Fortunately for us, and unfortunately for Dupont, Dupont had downsized its business, making it possible for us to hire brilliant chemists. We did not have to recruit our major scientific group.”
Cephalon is within 100 miles of all the major pharmaceutical companies, another key source of employees. “Some of these pharmaceutical companies, like Merck and SmithKlineGlaxo, are just around the corner,” Dr Baldino says.
“When you are looking for talent to create and commercialise a product, this does not come from an academic who had made a discovery or a financial guy who has come out of a financial institution. This talent and training comes from major pharmaceutical companies. To be able to recruit that kind of talent is a lot easier here than anywhere else in the world.”
Cephalon has been successful. In the 17 years since it started, it has raised more than $3bn in the public markets. “Today we generate $300m a year in cash,” says Dr Baldino. The company is ranked among one of the top five profitable biotech companies and one of the fastest-growing biopharmaceutical companies in the world.
Today it employs about 3000 people in 11 manufacturing facilities and offices worldwide. Among them are: Salt Lake City, Utah; Eden Prairie, Minnesota; Guildford, England; Martinsried, Germany; Maisons-Alfort, France; along with offices in Switzerland, Austria and Spain.
“Our biggest European presence is in France, where we have three manufacturing facilities,” he says. “Two are research and development (R&D) facilities with 700 employees. Paris is our European headquarters.”
Like most US companies, Cephalon has grown its European business through mergers and acquisitions, although its operations in the UK are homegrown. “We started there to do more clinical R&D,” says Dr Baldino. “We also launched a joint venture with Novartis to sell its products directly.”
Cephalon remains firmly focussed on the US and Europe. The company has no immediate plans to expand into Asia, although, unsurprisingly, China could prove enticing.