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Healthcare IT Vet Takes Reins at Accelrys; Declares Discipline Key to Growth

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Mark Emkjer wants to put Accelrys through boot camp. “I think we need more discipline. I think we absolutely need to obsess about our clients,” he told BioInform last week, just 72 hours into his new position as president of the Pharmacopeia subsidiary. Emkjer, who replaces former Accelrys COO Mike Stapleton, said he thinks this client-centered strategy will bring the company to its eventual goal of $200 million in revenues.

Emkjer is a 23-year veteran of the healthcare industry, most recently serving as president and COO of Sunquest Information Systems, a provider of laboratory, radiology, and pharmacy IT systems that was acquired by UK-based healthcare firm Misys in mid-2001.

While a newcomer to life science informatics, Emkjer is “a firm believer that this market is going to explode.” Coupled with his own background in software management, Emkjer is confident that Accelrys will soon meet its goal of profitability. “I’m not a scientist, but I am a proven software executive, and the processes are all identical. It’s obsess about your client, it’s deliver on time…In this space, historically, many companies have had a focus purely on the science without looking at the [business] metrics, and unfortunately I think that era is over with,” he said.

This client focus comes with a hearty serving of Emkjer’s mantra,”discipline.” This discipline isn’t just about getting the sales force in lockstep: It’s a look-before-you-leap philosophy that extends from customer relationship management to product development to acquisition strategy.

In line with fashionably sober post-Enron business mores, Emkjer noted, “one of the things I’m going to focus on is making sure that the disciplines are here to be profitable.”

He commended Dennis Rossi, the company’s vice president of life science marketing, for “the discipline he’s instilling in the organization — he’s absolutely where I stand on that. I think you have to spend some time up front to not only survey the market, understand your client base, but deliver those high-priority items.”

Another area singled out for this approach is product development around the company’s newly launched Discovery Studio line of enterprise tools. “Most software companies spend very little time up front defining,” he said. “They spend a lot of time building a product, and then they spend the majority of their time fixing the product so that it meets the market’s needs. I feel the opposite. You have to spend your time on the front end, do extremely detailed definition, granular definition. And then you roll a product out that clients can use and get a return on investment with immediately.”

Finally, he said, “Financially we have to be prudent. We have to know where to invest.”

Minor Attitude Adjustments

Accelrys is still grappling with the challenges of integrating the products of the numerous software companies that comprise it, is a fact of which Emkjer is well aware. Moving these various products to a single platform is a wise move, he said, but he differs just a teensy bit in his outlook. “I tend to err on short term, make sure your clients are getting new science, new functionality, vs. just a platform shift,” he said. While this view is “contrary to what’s been said here,” Emkjer noted, “it’s a lot easier and less expensive to maintain a client, in my opinion, than to go find a new one.”

Emkjer intends to deviate slightly from Accelrys’ traditional attitude toward acquisitions, as well. An aggressive acquisition strategy — even with the balance sheet to do it — isn’t a good idea if it’s not well thought out, he said. Emkjer came to this view after acquiring 12 companies, many of which “could have turned out better.” Planning the integration, organization, and cultural aspects of a merger before signing the dotted line can mean all the difference, he said. However, he was quick to note that Accelrys has “done a pretty good job, because they bought so many companies so quickly, of bringing those components together.”

Track Record

Emker’s tougher focus and call for discipline shouldn’t imply that he views Accelrys as a den of decadence and corruption. On the contrary, he’s “more than impressed” with the company’s employees and its performance relative to competing informatics players. Nevertheless, he said, “I would say we need to be more disciplined about our approach to client service, we need to be more disciplined in terms of prioritization of products.”

Emkjer boasts an impressive track record of turning around his previous employer. When he joined Sunquest in 1999, the company’s stock was valued at $8/share and it was earning 48 cents/share. When Sunquest was acquired in 2001, the stock price had tripled to $24 and earnings increased to $1.39/share. Cash on hand increased from $27 million to $72 million over the same period, while the company’s employee turnover rate decreased from 25 percent to 7.8 percent.

Emkjer credited two factors for his success at Sunquest: focusing the company on its core interests and investing in its infrastructure. He installed a client relationship management system, computer telephony integration, and configuration management systems in order to “measure every single thing we did” — a move that drastically improved customer satisfaction rates, he said.

All Eyes on the New Guy

To guide him in an unfamiliar and challenging market at the helm of a company that’s experienced its share of turmoil over the last year, Emkjer is relying heavily on his experience and track record to guide him in an unfamiliar and challenging market. As a newcomer in the informatics space, Emkjer will certainly be heavily scrutinized.

Some observers are skeptical of Emkjer’s chances for success. “We don’t know him yet,” said Stefan Loren, an analyst with Legg Mason who covers Accelrys. “And he replaces somebody who was extremely well respected.”

It is still unclear whether Emkjer’s predecessor, COO Mike Stapleton, left the company under his own choice. Sources close to the company have said that Pharmacopeia’s upper management is still reeling from the aborted acquisition attempt of Eos earlier in the year, and that Stapleton’s departure may be the result of lingering frustration within the Accelrys unit over that episode.

“Mike [Stapleton] was a guy who understood the software business pretty well,” said Loren. “The software business, when you’re selling to a pharmaceutical company, is very different than the software business when you’re selling to healthcare companies.” While Emkjer has the sales experience, questions remain about his ability to convince a market with “different ideas and different agendas,” Loren said.

However, Loren noted, experience in healthcare is better than some alternatives: “We’re not getting somebody that was selling peanuts or anything,” he said.

Emkjer said he’s well aware of the consolidation/fragmentation cycle in the informatics space, but remains certain that the “megatrends related to life sciences, drug discovery, chemical discovery,” combined with a dose of good-old-fashioned business discipline, will see the company through to its $200 million revenue goal.

— BT

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