No. 62: Endo Pharmaceuticals

By Baselinemag  |  Posted 2007-04-09 Print this article Print

Its shackles removed, this drug company breaks into a sprint.

There is something about round numbers that makes a company take stock of its situation. For Endo Pharmaceuticals, the number is $1 billion.

That's the sales level that Endo, maker of Percoset and other pain-relief drugs, is poised to surpass this year. As it does so, the company's top technology executives have a long list of changes they're itching to make.

Among the most important is to speed Endo's ability to communicate with the U.S. Food and Drug Administration and with outside business partners. The need for such inter-organization collaboration is becoming increasingly common in business. Where some companies are addressing it by moving toward service-oriented architectures that facilitate information sharing, Endo has taken the more straightforward route of implementing an application from Documentum.

"We're not putting in Documentum for the sake of having a really big document archiving system," says Daniel Carbery, Endo's senior vice president of operations. "It's to work with a lot of outside research partners, which is our model. Our infrastructure becomes a barrier very quickly."

Executives concede that Endo, which is based in Chadds Ford, Pa., has sometimes taken a short-term view of technology. For instance, the company's implementation of SAP in the late 1990s was said to be a showcase tactic by Kelso & Co., the private equity firm that for a long time was Endo's controlling shareholder. "Kelso's strategy was to build Endo and then to flip it to a Merck or Johnson & Johnson," says Gary Fling, who joined as chief information officer last June. "There was a mandate not to invest in any more than the bare-bones operation." Kelso declined to comment.

Those constraints fell away when Kelso sold its remaining shares in March 2006. Endo invested some $9 million in technology improvements in the second half of last year, including on Documentum, and will spend another $20 million to $25 million this year, some of it on consultants like IBM Global Services.

"The internal folks that we have don't know what the best practices are—we kind of have to go external," Fling says. He adds, "We're not going to go through this long deliberate as-is analysis. We're just going to decision it and go."


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