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Patheon Day One Town Hall

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Good morning. It’s great to be here in North Carolina If you take away two messages from today the first of which is the day you join Patheon was the day you joined Thermo Fisher Scientific and that is how this company has grown over the years, because of the wisdom of the team around the world. And as you get to interact with your colleagues around the world, you'll get a sense of the passion that they have and the wisdom they bring and they will want to know how together we can make the combined company even better and I think that’s super important. In one way it's a celebratory day one but on another day it's kind of business as usual as we've got a lot of work to do, so that gets to the second point which is maintain our focus on our customers. The differentiator for Thermo Fisher over the long term is we are not a service provider. We are not a technology company. We are a company that enables our customers' success and if we do that well every day, my God what a bright future we'll have. So welcome to the company, focus on customers. We've had a successful day one on those two points. In terms of the agenda for today, I'm going to give you a very quick orientation to the company. I'd like to, before I get into Thermo Fisher, also thank Jim Mullin. Jim Mullin is somebody that I've known for a very long time when he was CEO of BioGen, was the first time I interacted with him. He has done a remarkable job in leading the business, you know. He's looking forward to both retirement as well as looking forward to supporting Michel and I to ensure that the business has an incredibly bright future. So on behalf, I'm sure of all of the Patheon colleagues I want to thank Jim for his leadership in the organization. In terms of Thermo Fisher Scientific, today we have 65,000 colleagues working around the world. We will finish the year with over $20 billion revenue and we are known by our customers for our unmatched depth of capabilities. The way that the customers will think about us is we provide great technologies and services. We have very deep applications expertise and obviously you know that in your own business about the depth of knowledge you have about drug development and manufacturing. And those customers that work with us in the laboratory, they see us very differentiated because we help them be more efficient and productive in how they operate their laboratories. And those are some of the things that the customer base ultimately sees us as. We have a number of strong brands, these are some of the brands that if you’ve spent any time in a laboratory you might be familiar with. And now 2020 seems awfully close and it's hard to think about a vision that’s only a couple of years out but this vision was put together and introduced on January 1st of 2010 and the context was coming out of a recession. And the company was a little bit under 10 billion dollars in revenue and what we said is we are going to be -- you know use the decade to grow a lot, make the company one of the world's most admired, make sure that our customers really value the company, that our technologies are very relevant and that we have a fantastic culture and ultimately have some happy shareholders so they’ll leave us alone. You know, it's seven plus years into the journey, we've made a lot of progress and what we've decided is the leadership teams will introduce the vision for 2030 in January of next year. Our mission we truly do enable our customers to make the world healthier, cleaner and safer. For any of you that read the newspaper this morning, you may have seen an article about Novartis launching a new therapy for pediatric and young adult cancer, really a breakthrough technology. That technology would not come to reality without the Core B technology used in that and that is proprietary to Thermo Fisher Scientific. So the first thing when that drug was approved yesterday, we got a letter from Novartis saying “Thank you for enabling this to happen,” right and they were – that’s one example of how we enable our customers to make the world healthier, cleaner and safer. And I want to just put a few words on why do we actually do this transaction in the first place, right? And why do we put any companies together and how do we think about it because I think that provides some of the context, right? So from the Thermo Fisher perspective, we are excited about the market that you serve, right? It's a large market, it's growing, it's fragmented and the customer base which we know well wants a large capable supplier to meet their requirements, that if you leverage size, scale and high quality you have an opportunity to really do a great job with the customer base, so we really like the market. And the company, Thermo Fisher, has a huge presence in serving the biopharmaceutical industry, right? You know, we'll finish this year with over seven billion dollars in sales to biotech and pharmaceutical customers and we believe the combination of the entities really does create a very unique platform to serve those customers better. We have a large clinical trials’ logistics business and you will get a sense of that from Michelle and over time and that’s very complementary to this. As well as the fact that in the biologics business within Patheon, we are a leading supplier of bio production technologies and both businesses will benefit from those organizations working together, you know. And then from a cultural perspective, both companies are very similar and that’s important because integrations need to go smoothly and you have to assess whether the cultures are compatible and in this case we are very excited about that fit From a Patheon perspective, we are moving the clinical trials business into the Patheon umbrella, unto the PSG umbrella and that creates the largest CDMO in the industry so that creates more scale. There are great opportunities to leverage the Thermo Fisher commercial presence around the world as well as the technologies that we have in bio production. Good alignment from the mission, so the Patheon board, the management team felt comfortable that the organizations are compatible and that ultimately from a colleague perspective there'll be great new career opportunities over time as well for the combined organization. So as we looked at it we felt like it was a very natural evolution to bring the organizations together and hence we are here today. With that, I'm going to hand it over to Michel who is going to give you more on the pharma services group I also would like to welcome Michel to the company leadership team, as we know that we will benefit from his participation in helping shape the direction of the company as well with that, Michelle. As you know in Patheon, over the last six years we've been trying to expand our set of capabilities through acquisition, through capital investment and have been able to expand sort of what we serve. And the critical area that we wanted to expand into was anything and everything to do with clinical trials, you know. We have a big development business, we make clinical trial material, it obviously made a lot of sense to combine that with you know more clinical trial capability. So many years ago we reached out to Marc and said, "Why don’t you sell us your, you know clinical trial business?" Well, here we are today. The good thing is, and the one thing I'm most excited about is we are now bringing these capabilities together and what we have, what you see depicted here on the slide is really a unique set of capabilities. If you look at the competitive set, most people participate in one or two segments. We are really the only one at scale that will serve our customers this broadly. Why does that matter? Marc referenced it. Our customers from the smallest to man and a molecule to the world's largest pharma company, they want simplification. They want less partners, they want to have more strategic relationships so that they have a more meaningful interaction with their outsourced providers. And that’s what we can offer better than anyone, particularly now with sort of the added capabilities. The good thing about, you know this chart it's not just that we cover these different areas we are leaders in each of them. The clinical trial business that Marc referenced is the absolute leader in the space, as we are in development, as we are in API, as we are in biologic. So we are really putting together not just you know, a random set of capabilities but really ones that will serve our customers really well. So it matters to our customers but most importantly at least to me, it matters to patients. That’s why they are at the heart of the circle. That’s why I wake up every day. I hope that’s why everybody wakes up every day to try to advance the course for the patients and when we do this really well, the benefits of these joint capabilities ultimately accrue to the patient. If we can get drugs to the market faster because we develop them quickly, because we run the clinical trial efficiently patients will benefit from life saving medications sooner. If we do it in a way we are reliable which is why we've put so much focus on OTD, then we can make sure that there will be no disruptions and people that need these crucial medicines every day get supplied to them efficiently. And if we can help our customers be more cost efficient by outsourcing their capabilities to us, obviously again ultimately that accrues to the patient and they'll have access to more of healthcare around the world. So a new group was created. So you have Thermo Fisher Scientific $20 billion, Marc as the leader of it then the business breaks in five groups. Each group is referenced by a three letter acronym. We are going to learn many three letter acronyms. I know a few of them but there's a book and you know, we're going to learn. So we're all part of PSG and it's exciting that a new group got created. One, I have the privilege of leading it which I sincerely appreciate and humbled by but I think it also speaks to the strategic importance of this acquisition. And as Marc referenced, Thermo Fisher had been attracted by the industry and then sort of investigated in the industry who would be the best fit and ended up with Patheon sort of as the target here. But a new group gets created not so often in Thermo Fisher so again I think we should be proud that, you know we're going to contribute significantly because let there be no mistake, it also comes with an important set of responsibilities right? The expectation is by being a new group that we will significantly contribute to the overall success of Thermo Fisher. And what is assembled in the group is what we had in Patheon, plus the clinical trial business that Thermo Fisher built over time. Here you see the leadership team. The group, this is just 16 people on the slide. The group is 12,000 people strong. Think about that for a minute and think about sort of we've always in Patheon talked about the power of the network, right? If we really unlock the potential as it exists, we now have the power of 12,000 people thinking everyday how we better serve pharmaceutical customers. I will hand it back to Marc for a minute to give us a sense of how we will do this integration. You know, the first principle really is around the day you joined Patheon was the day you joined company right, which is about you know ensuring that the colleagues around the world are excited about the combination and the future that we hold You know, at the very high level do no harm is one aspect of our integration principles and serve the customers well. Well that's what we're trying to do and if you do that over time you'll create all the benefit. Maybe the most important message around integrations is be prioritized, right? It's not about changing a lot, it's about leveraging one or two things differently. That really makes a difference and as you see some of the capabilities come together, a great integration is taking advantage of these companies without distracting all of the goods things that are going on. And we're pretty good about making sure we stay prioritized. So that's the, you know the core view. The company has been successful over a long period of time because each of the parts that have joined the company, have made the whole better. I don’t mean about just the people or their capabilities but the ideas, right? And it's -- all of the wisdom in Patheon, we want that to become part of Thermo Fisher and leverage across the company, we do that a lot and that's how the company will grow right? And when I think about it -- when I joined the company 16 years ago, it was almost exactly the size of Patheon, it was $1.9 billion in revenue and it was 8,000 colleagues. In over a 16 year period, by staying focused on customers and having colleagues around the world , we want to make the company better, you know. We've you know basically had a more than a 10 fold increase in size but more importantly, a much bigger impact on that in terms of helping our customers be successful. So that's what we're trying to do with the integration. Michel is going to give you the details and then we're going to go into the discussion. So your role. So my ask to you, and Marc mentioned it, most importantly stay focused. Safety first, never compromise in quality and deliver a wonderful customer experience. That's what we do every day, that's what we did yesterday, that's what we will do later today when we're are done with this and that's what we'll do again tomorrow but really very important, that is your biggest contribution to the successful integration, is to make sure that you know we stay focused. Consume all these materials. As I mentioned, you know they're really very good and I hope that you'll learn from them and get a lot of value, you know out of them. And then assimilate, right? We got to completely assimilate into Thermo Fisher. There's a personal branding guide as part of your day one kit, it's translated in all the local languages, where we have facilities. So hopefully it helps you to sort of make sure that we start on this journey on assimilating into Thermo Fisher. And you guys got lucky because you just got hired by one of the world’s most admired companies and you didn’t even need to interview, right? I had to interview with Marc and I tell you it wasn’t so easy. So we're now a whole part of this really spectacular company and I think as part of this assimilation, I hope you take a couple of minutes to get familiarized with the scope and the impact that we as Thermo Fisher have on the world, it's really quite remarkable. So with that, we'll open it up to questions, difficult questions over there and then the more easier ones over here. So in addition to answering some of the questions here in the room, we’ll also take, you know from around the world. I'm Monica. I'm a PDSPM and I just want to find out what does Thermo Fisher consider as success and then how do you measure it as a company? We think about success really around, you know our various stakeholders' right? So from a customer perspective we use what we call the customer allegiance scores, a kind of a net promoter score which will be familiar here and we want to make sure that our customers want to do more business with us, right and so we're very focused on that. From an employee perspective, we do a lot of surveying to make sure that we really are on the journey to be one of the world’s most admired companies. And from a stakeholder -- a shareholder perspective, it’s about delivering strong financial performance, right? And the key metrics there are going to be revenue growth you know margin expansion and ultimately earnings that we get with good cash flow. And the team here knows that discipline through both revenue and the DA and the metrics we use are very similar. Good morning, my name is Christine and I work in quality assurance. First I just want to say how exciting that this is. You mentioned that PPI and the Patheon way are very similar and for us just to wait and see how it rolls out but can you give us an example of one thing we might have to look forward to? Sure So practical process improvement, you know operates in a number of ways. There's a structure training process that, you know helps bring tools to the various colleagues, but there's also a very much of a cultural aspect of having everybody accountable when we come to work, to identify ways of working better. And I've seen through various Kaizen Events around the world, just remarkable improvements in the business, based on just great ideas. My favorite example was, you know we once had a process on one of our instruments business. From the time a customer placed an order, that they want to request a quotation, it took 17 days to get to that customer, actually the details of what it would cost to buy their configured instrument. If you think about it, this particular product was about a million dollar product. You want to spend a million dollars with us, it took 17 days to find out you know what it would cost and when it would show up. And the team turned out to an hour and they didn’t -- there was no consultancy, there was no experts, they basically redesigned the process. So that if you want to spend a million dollars with us in an hour, you'll know what it's going to take, right? And I think that's what our PPI, it's just engaging our colleagues to make the company better. And I think the way I think about it is that ultimately it's there to make even stronger what we have, right? So I think one of the many things we found out as we were doing, as Thermo Fisher was doing due diligence and we started spending more time and I had the opportunity to meet more people, is how similar these cultures are. So the drive that we have around continuous improvement, always finding a better way, never being satisfied, those are tenets of the culture as they exist, in Thermo Fisher. I think the big benefit we'll see is that there's so much more experience in Thermo Fisher that we now can leverage. So from Toronto, we have a question. We've done some communication to our clients about the news, can you give us a sense of any initial feedback from the customers about the combination? Yeah. I mean I'd say there was a bunch of feedback obviously when we announced the deal back in May, you know. I think sort of I had to summarize it. I'd say people obviously were very well aware of Thermo Fisher so needed no introduction, great. Excellent reputation right, so they really saw this as you know two great companies coming together. You know the second thing they worry about, their own projects you know logically. So I think once we explained that you know this is in a separate group, we're going to take these capabilities together, you know we're not going to get distracted in the integration, what I heard were people were really excited. And you know even as late as earlier this week in Manza, we have a big engagement going with Merck and Merck needed some cold storage capability which we don’t have in Patheon, Thermo Fisher has right? So I think over time, over the next couple of weeks, you'll see the first very tangible examples of what you know, this sort of overall joint capability will do for clients. It will play out on the long run but we will be surely communicating to all of you a couple of these tangible examples what customers say, “Hey, this is really helpful you know, you really added value to me,” and that is our big opportunity over time. From St. Louis, can you talk a little bit about Thermo Fisher's philosophy on learning and development opportunities and a couple of sites I've already asked about, mobility of positions between the organizations and how quickly might that happen? Sure. So in terms of -- we have a significant amount of web based training available on the internet site. We also have a number of training programs around the world that are very important, sometimes they are implemented locally, sometimes they are implemented in other parts around the world, so a huge commitment to investing in our colleagues around the company. In terms of mobility, there is sort of two different ways to it. One is we're very transparent on job openings, we post them and you can apply to any position that you are excited about applying for and be considered as a candidate. So we encourage you know, our colleagues to do it. It’s not required. If you love what you're doing, you love the site, that’s great but if there's something you know that looks interesting to you or works from a family perspective you know, apply and then sometimes we ask, right? There's both. So we’ll just say you're doing something and we need that skill set elsewhere and again, we engage in a dialogue as well but we really do encourage our colleagues to have long successful careers here and to do that and pursue it in whatever way makes the most sense for each of you individually and for the company. We talked a little bit on the presentation, the culture, you know Cincinnati was also asking anything else that comes to mind to talk and describe the Thermo Fisher culture? Yeah. So you know, there's a huge focus on inclusion as part of the culture because what we want to make sure is we are getting the best thinking out of everybody, right? And therefore having a diverse and inclusive culture is very much part of how I would describe the culture as well and that's obviously a journey. So it's supposed to be a couple of the characteristics as to how I would describe it. I think the other thing I'll add as I have experienced it, it's an organization that's very interested in learning. This is not -- when I showed up and ended up meeting a bunch of people, it's not like we'll tell you how we do it, you know. As Marc mentioned earlier, all these acquisitions have helped them, what they call to take the best thinking which I think is a pretty brilliant sentence, right? If you really apply that, you will make your processes and your thoughts and your ideas better and better and better and of all the people I have encountered, that's a recurring theme. People are very interested to learn our business and I think again for us to completely assimilate in Thermo Fisher, we got to make sure that we take good use of that and you know welcome them as family members and learn from them. Because if you do all that, the scale at which we now can sort of move the ball forward is really unrivaled. I think that's it. Thank you all for your time and attendance and thank you and welcome to Thermo Fisher.

Video Details

Duration: 23 minutes and 32 seconds
Year: 2017
Country: United States
Language: English
License: Dotsub - Standard License
Genre: None
Views: 20
Posted by: edgefactory on Sep 7, 2017

Patheon Day One Town Hall

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