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more than just executive boasting. It has no debt, $204 million in cash on the books, and a market capitalization of more than $3.2 billion. Even in the economic downturn, it was able to boost total revenues by 7 percent in the first half of this year, compared with the same period a year ago. It had 8,826 employees worldwide entering this year. And Covance has hired another 500 people so far this year, Herring says.
Covance’s strategy is essentially to get more mileage out of the Gene Expression Laboratory than Merck did. Demand at one big drug company for this kind of genomic analysis service tends to ebb and flow, meaning that all the expensive space, equipment, and people aren’t likely being fully utilized all the time, Herring says. By putting this asset inside a contract services organization like Covance, which can seek out dozens of clients for this work, it can make more efficient use of the existing resources, he says.
On a higher strategic level, this is essentially a bet Covance is making for the future of personalized medicine. “Everybody believes it is in everybody’s best interest—patients, payers, and pharmaceutical companies—to prescribe the right drug to people who are actually most likely to benefit,” Herring says. Demand is growing for this service in the pharma business, Herring says. At least four of Covance’s clients have specifically inquired about its ability to do gene expression analysis in the past four or five months, he says.
“This really provides us with a service that we think has growth potential, and we’re a growth company,” Herring says. “What Seattle is getting is a growth company.”
Before we hung up, Herring went out of his way to put his best foot forward with the locals. He pointed out that Covance is a “great corporate citizen,” and that its employees are active in local charities and volunteering. He mentioned that he’s been here in Seattle many times, often because of flight stopovers on his way to meetings in Asia. He’s a fan of the outdoors. “We’re a good company to have in your community,” he says.