Prescription Pipeline

It was early in her career, but Leah Brown was doing well. At age 24, she was an engineer for New York Telephone Co. (now Verizon Communications) in New York City. She often threw elaborate parties at her uncle’s swank Upper West Side apartment. She worked hard–60-hour workweeks were the norm–so she could have the lifestyle she wanted: nights out on the town, designer clothing, and a comfortable living. It was the ’80s and life was good–until her uncle contracted HIV.

Leah’s relationship with her uncle changed from confidante and best friend to primary caregiver. In that role, she felt a growing frustration while trying to gain access to the best healthcare and pharmaceuticals for her ailing uncle. His health deteriorated rapidly and on Dec. 27, 1987, he died. The loss of her uncle, Alan Brown, was devastating. Just 16 years her senior, Alan had been there for Leah her entire life. “Through that experience, I really wanted to make an impact on the healthcare community, but with me not being a clinician, I had to find a very unique way where I could transfer my skill sets to the healthcare industry.”

Brown, who received her law degree from the University of Kentucky, spent the next 15 years at a large consulting firm where she worked with hospitals to meet healthcare regulatory compliance issues. Though she was gaining valuable experience within the industry, she put her entrepreneurial dream on hold. “I was content with this career, but because of a reorganization I found that I was out of a job,” she says. “So this was the break I really needed to say, ‘OK, Leah, it’s finally time to implement what you’ve always dreamt to do.’ You know, sometimes you just have to be pushed into it.”

She may have been pushed into it, but in less than seven years after its founding, A10 Clinical Solutions Inc. (No. 100 on the be industrial/service companies list with $19.7 million in revenues) now ranks among the largest black-owned businesses in the U.S. And despite that stellar achievement, Brown, the company’s president and CEO, believes that the pharmaceutical industry will continue to fuel future growth.

A Growing Industry
Based in Cary, North Carolina, A10 Clinical Solutions, named black enterprise’s Emerging Company of the Year in 2008, has two lines of business. The first, its clinical trials management business, accounts for about 85% of A10’s revenues. Here, the company provides staff and oversees observational studies for pharmaceutical and biotech companies and government agencies. All drugs sold in the U.S. must go through a four-part clinical trials process, as mandated by the Food and Drug Administration.

Phase I: Researchers test a new drug or treatment in a small group of people
for the first time to evaluate its safety, determine a safe dosage range, and identify side effects.

Phase II: The drug or treatment is given to a larger group of people to see if it
is effective and to further evaluate its safety.

Phase III: The drug or treatment is given to large groups of people to confirm
its effectiveness, monitor side effects, compare it to commonly used treatments, and collect information that will allow the drug or treatment to be used safely.

Phase IV: Studies are done after the drug or treatment has been marketed to
gather information on the drug’s effect in various populations and any side effects associated with long-term use.

A10’s clinical trial management business is done in conjunction with phases II and III. Clients include GlaxoSmithKline, Johnson & Johnson, Merck, Pfizer, and Amgen. A10 provides the technical resources, often clinical research associates and registered nurses, who work as members of the investigative team to assess and monitor the safety and efficacy as the drug is used by larger control groups.

Its second line of business manages healthcare clinics at large corporations. Within those clinics, A10 provides primary care, preventive care, and wellness programs. It also provides senior management with reports detailing the true health of

the corporation. The sales pitch: If A10 can keep employees well, it helps clients’ bottom lines with regard to insurance premiums, productivity, and decreasing absenteeism. The company sees this area as a growth opportunity. “Clinical research is truly our engine, but our clinical care is taking off big time,” asserts Brown.

The pharmaceuticals industry is one of the few in the U.S. that has experienced growth in recent turbulent years. According to IMS Institute for Healthcare Informatics, a market research firm specializing in pharmaceuticals, the industry has grown 6.2% annually over the past five years. And while that growth is expected to slow to 3% to 6% over the next half decade, global sales are still expected to reach $1.1 trillion by 2015. Much of the growth will be fueled by emerging markets, as IMS projects 17 such markets, led by China, will collectively contribute 28% of total spending by 2015. This compares with 12% in 2005.

A Matter of Trust
As is often the case, Brown had challenges in the startup phase. Denied capital from banks, she used her severance pay and personal savings, and took out a second mortgage on her home to launch her venture. It took nearly 18 months of marketing her business and trying to meet with the right people before A10 landed its first piece of business–doing clinical study documentation for Talecris Biotherapeutics. “I was basically at my last dime and telling my children, ‘We’re going to be on a park bench soon.’ Because I had mortgaged everything.”

While those first contracts helped propel steady revenue growth for A10, scaling up was not entirely without its share of pain, as Brown will admit. “It took me too long to hire top management executives to the team,” she confesses. “So I was managing a lot of the business, and I was down in the weeds where I should not have been. My talents, which I soon realized, were not being in the weeds, but really being the

strategist, the vision for the company, and the face of the company.” As the company was growing, Brown was handling functions herself such as accounting–which can be time-consuming with a company that routinely puts together large teams to handle clinical trials.

When a company doesn’t have the financial infrastructure and proper accounting processes in place, it’s a problem–even when revenues are increasing. Brown thought about hiring a team, but her fears crept in. “I’m growing a business, and now I have to turn over my accounts receivable, my money, to somebody I don’t know. That was hard. I had to give someone power to look into my bank account,” Brown recalls. “It was like, ‘OK, they’re going to come up, and they’re going to mess it up.’ They don’t care because it’s only a job.”

It was her godfather, a CPA, who talked her into staffing up after she called him for accounting advice and complained that she wasn’t sleeping because she was stressed about handling the finances and administrative minutiae that CEOs needn’t focus on. “Once they came on board, it was kind of like letting the apron strings go.” With management in place, Brown was able to focus on her strengths. “I was able to get things off of my plate and really concentrate on the stuff that I was good at–client relations, being able to architect the project, scope it out, define it, blueprint what the client needs,” she recalls.

China Bound
A10 participates in GlaxoSmithKline’s mentoring program in which suppliers are paired with managers and executives within the corporation to improve supplier business processes and gain a better understanding of how to do business with the pharmaceutical giant and across industries. Denise James Gatling, director of global supplier diversity and business development for GlaxoSmithKline, lauds Brown for her success. “Her attitude about being in our mentoring program, I think, was what helped Leah be successful,” says James Gatling. “One of the reasons we developed it was so that we could identify what the gaps are and to help close that gap for these suppliers to be able to compete in these nontraditional areas.”

Brown says that the mentoring has helped the company with its problem solving, using a concept called “Idealize Design.” During A10’s bi-annual staff retreat, the executive team arrives at a solution to a problem. Using this method, the team first envisions a solution in a perfect world where there are no resource or financial barriers and then methodically works backward to figure ways around the real-life barriers that exist. “It’s amazing how we are able to work backward from the perfect ideal and implement a plausible fix to what we thought were daunting problems,” says Brown. “We have implemented amazing ideas that were direct results of our Idealize Design sessions.”

Bob Stanley, chief financial officer and chief operating officer of A10, believes the company’s growth rate is sustainable. “Pharma is going to continue to grow. The pipelines in many of the major pharmaceutical companies have been depleted over the course of the last decade or so,” he says. “The demand for them to bring new products to market, especially in the context of the 24/7 global world that we’re in today, is going to just rapidly continue to grow. I think that positions us to not only grow along with the pharma industry but to be able to actually step in front of it by the way in which we partner with them.”

Looking ahead, Brown sees the significance in gaining overseas exposure, projecting 2011 revenues of roughly $25 million. Many of A10’s clients have a global presence and look for suppliers that can go where they do. “I’ve traveled frequently lately to China, South Africa, South America to see how we can extend our work to countries and areas that need it most,” says Brown. “I’m in the midst of figuring it out and trying to make money at the same time.”