Last week, Invitrogen reported its first-quarter 2005 results, posting a 4-percent gain in organic revenue year-over-year (see BioCommerce Week 5/5/2005). During a conference call following the release, the firm revealed that it had recently embarked on an effort to visit a large number of "key" potential customers around the globe.
This week, Ben Bulkley, Invitrogen's senior vice president of commercial operations, talked with BioCommerce Week about the endeavor. Bulkley has been with Invitrogen for 18 months and previously worked at GE Medical Systems, where he ran one of their service businesses.
What have been some of the biggest changes in the industry that Invitrogen sells to in recent years?
Pharma and academia have a need to solve some profound problems. I see a change in how these clients are looking at the supply base to solve some of those problems. Pharma outsourcing [is a] well-known trend in the industry, and we can help in that process.
Invitrogen participates in what is known as the systems biology, or integrated science, field, which is relatively new. What are the key challenges the company faces as part of this segment?
It's hard because by the very nature of it, you're trying to integrate a lot of different disciplines — not just biology, but chemistry and physics — and a lot of different players and experts face organizational challenges within, say, a biotech or pharma, but also outside. Here again, they don't have necessarily all the capabilities, so they're needing to reach out to the supply base to augment what's needed. Mind you, this is a long journey. This is not something that's done in a quarter.
We work with some experts in the field of systems biology, and we're building up our own capabilities here as well. It's really fundamental to what we're becoming as a company. We're buying, and also investing, across such a wide range of workflows from basic research all the way through to pre-clinical and production with the idea that all of this is connected.
Let's talk about some of your comments in the recent conference call. You mentioned the firm had visited more than 70 execs at 20 key big pharma accounts, correct?
To be exact it was somewhere between 20 and 30, and it was academic institutions, biotech and pharma. It was very purposeful. It's not unusual that a company like Invitrogen would be talking to clients. What might be a little bit different is that it was done in such a concentrated way, where we were fanned out all over the world and the team that was mobilized would follow a client no matter where they were. So, we had one team having a full, 360-degree view. At the end of the week, the debriefing on what we heard not only reflected into the business, but naturally a lot of opportunities came up that we now have in the pipeline. The organization, the logistics, and the commitment is maybe what was unusual.
How long did that take to do and what was the goal?
The goal was two things. One was to build some relationships that we didn't have. So, we targeted clients and people that we thought we should be acquainted with. So, these are senior vice presidents, presidents, executive presidents, provosts and so forth that we thought we should get to know. Secondly, more than anything else, having given a little context around this notion of systems biology and connecting all the different capabilities that exist within our business and where they're headed, you get a reaction and listen to where they take the discussion to see what's at the top of their mind. It was very striking what we heard back. I'm not sure we can go into detail. It's kind of sensitive [information].
Can you tell us who any of these clients or potential customers were?
Usual suspects. There's a few that are a little less routine, but you would not be surprised if I read off the list. They would be at the top of anybody's customer list. Maybe at the academic accounts we're a little bit different because of our depth in academia. I would tell you, [but] they wouldn't want me to tell you [who they are].
Can you tell me any of the questions you asked them?
Certainly. Where are you headed with your investments? How are you deploying you resources? How do you look at a company like Invitrogen? And what do you seek from your supply base and how is that changing? How do think about quality and the need for quality in faster cycle times and mitigating risk and so forth?
Were there any answers that surprised you?
The answers were very context-specific. There were some clients that were so much further ahead. It was refreshing to see some clients who really had their act together.
Is this endeavor something that Invitrogen plans on repeating?
Absolutely. We'll do this at least annually, because in the end, the questions is, 'Did it work?' It was very intense. The focus we were able to get in such a short amount of time was really fulfilling for us. We are in the 'voice of customer season' anyway, and we have hundreds of interviews going on. In this case, more with end-user scientists, they tend to be more senior engineers, but not exclusively. We're trying to understand where the science is going. So [we have] this very intense senior-level engagement and the process we go through to collect voice of customer for our strategic development.
When do you anticipate seeing a payoff from this effort?
There has been some business we've been able to transact already. [But] that wasn't our expectation going in. We didn't expect to walk away with an order book. It was more, 'How does this influence our long-range road map?' and 'What relationships have we built that will help us build up longer-range growth plans with clients to develop some interesting science?' In both of those, we see the emergence of long-range collaborations and partnerships unfolding.
You also mentioned 'immediate opportunities for volume [sales] and longer-range collaborations, especially to build the depth of our relationships at that level.' Can you explain further what types of collaborations you're talking about?
For example, as you saw, we did something with the Mayo (late last year, Invitrogen and the Mayo Clinic announced they would co-develop biomarkers and technologies to detect them. Invitrogen has an option to license technologies from the collaboration either exclusively or non-exclusively in exchange for funding several biomarker research programs at Mayo — ed.). There's a potential for more of those. I would get ahead of myself to say who, where, and what kind. But what the Mayo represents is a template for what we want to do with a very few strong institutions around the world — and it's not restricted only to academia. Biotech and pharma play a role here, but we may not disclose what we do with pharma and biotech to protect their interests.
Your comments highlighted a problem faced by researchers in both academia and industry, that of having to deal with too many distributors. What are you telling clients you can do to alleviate this problem?
First we ask them, 'what is the extent to which you buy and who do you buy from?' The way we tee this up is to say, 'Look, we have such a terrific range of technology-based products that by design have been developed to be best in class that we can bring to you some efficiencies in how you relate to your supply base.' Because if you're dealing with 500 suppliers in one lab, you probably don't need five salespeople selling to you. We can help you with that, and in return there are economies of scale, and perhaps more importantly there are economies of science, where we can put together different workflows with a solution. Today, for them, it can be very fragmented across workflows. The value here is we can work with you on putting something together that serves an efficiency, or a quality, or a speed, or cost objective of some kind. That's kind of the opening discussion. From there, we get pretty consistent feedback in the interest to explore how we can help them.
Can you give some examples of how Invitrogen is helping customers 'optimize production from an upstream and downstream perspective,' as you mentioned?
The classic case is that researchers put together an enormous amount of effort upstream to put together a cell line, and as it moves downstream there are processes that are used to improve on that cell line for production purposes. The question is, what capabilities can be placed upstream to bring in a cell line that is ready-made for production? Now, that's a tall order, but perhaps there are some things that can be done to save some time downstream.