JOSEPH MOSNIER: [This is] an interview with Mr. Dennis ...

Dennis Gillings

JOSEPH MOSNIER: [This is] an interview with Mr. Dennis Gillings of Quintiles

Transnational Corporation at their offices in the Research Triangle in North Carolina.

My name is Joe Mosnier. This is cassette 6.10.99-DG. This interview is being conducted

for the Southern Oral History Program's series, North Carolina Business History. Thank

you very much for sitting down with us for the series. I appreciate that. Let me ask you,

just to open, if you could give a quick sketch of your [life], even reaching back say to

where you were born, childhood, how you ended up those years later teaching at Chapel

Hill.

DENNIS GILLINGS: I was born at the end of the Second World War in London,

England and was educated in the inner city of London through to the age of eighteen.

Then I attended the University of Exeter. Actually, starting at the age of nineteen, I

attended the University of Exeter in the southwest of England reading mathematics for a

bachelor's degree. From there, I went to the University of Cambridge to do the

equivalent of a Master's degree in mathematical statistics. It was actually called a

diploma in mathematical statistics. Then I returned to Exeter as a faculty member, doing

my Ph.D. at the same time. Subsequent to that, I came to the University of North

Carolina here at Chapel Hill initially as an assistant professor and then rising through the

ranks. I made a full professor, if I recall [correctly], in 1980. My corporate life had

started in a consulting role before that-.

JM: Can I jump in with that? Let me ask just a little bit more--. Anything in

particular that you would think - taking the measure from today's distance — was

especially significant about your family, about early influences or mentors that would

have some substantial role in making you the man that you are?

Interview number I-0072 in the Southern Oral History Program Collection (#4007) at The Southern Historical Collection, The Louis Round Wilson Special Collections Library, UNC-Chapel Hill.

DENNIS GILLINGS

JUNE 10, 1999 DG: Yeah. I've been asked that a lot. I always find it difficult to pinpoint people.

There were a couple of people at the University of Exeter that had a considerable

influence on me. One was Professor John Ashford who was the professor of statistics

because he suggested I should go to the United States. That led me ultimately to come to

here. Another was a physician, Dr. Norman Pearson, who was my boss at the Institute of

Biometry and Community Medicine while I was at the University of Exeter doing my

Ph.D. I was working as a faculty member for him in this institute. So those two people -

he being an epidemiologist and Professor Ashford being a statistician, did have some

influence. Ashford guided me, actually, to the United States.

JM: What's the specific story about how this Chapel Hill position came to your

notice?

DG: Well, it definitely came out of the blue. In fact, it was John Ashford who

came back from a tour of the United States. He was giving a lecture tour. It was just

prior to my taking, if you like, a leave of absence and making a journey across Africa by

Land Rover. He said to me, "Would you like to work in the United States?" I didn't

really know what to say because I hadn't thought really of that. Apparently, he'd given a

lecture at University of North Carolina here at Chapel Hill and the chairman of the

Department of Biostatistics, who is Dr. Bernie Greenberg, had identified a position that

he'd been searching for for between one and two years and had been unable to find within

his department. Apparently, I fitted the bill. So, that came out of the blue. I did then

meet Dr. Greenberg in Germany about a month later, or maybe just a couple of weeks

later, at some professional meetings for statisticians. As a result of that, [I] got offered a

job, which I turned out to accept at the conclusion of my African sojourn.

2 Interview number I-0072 in the Southern Oral History Program Collection (#4007) at The Southern Historical Collection, The Louis Round Wilson Special Collections Library, UNC-Chapel Hill.

DENNIS GILLINGS

JUNE 10, 1999 JM: Had your ambition been and was it then to be an academic?

DG: No. Sometimes that makes me uneasy. I found earlier on, I didn't know too

well what I wanted to do. I was reasonably good academically, and I feel I followed my

nose. You do well in school and you go to the university, and you do well at bachelor's

and you go on. Then a decision time comes and then, in this case, I was carrying on.

Then someone was offering me a job that was very attractive - certainly by English

standards because the salaries of professors, even though they may be modest in an

American environment, were very substantial relative to the British environment as it

existed then.

JM: What were your impressions of Chapel Hill, when you arrived, as a place to

live and a place to begin building a career?

DG: Well, it was certainly a beautiful place. I had a little difficulty relating to it.

I was definitely from London and enjoyed larger cities, and I suppose I hadn't really

thought [about] what I was coming to. Back in 1971, this was a pretty rural area. The

Research Triangle, as we know it today, hadn't really developed. It didn't seem at all

like--. My only sort of contact of the US had been through the movies and things like

that, so it seemed vastly different. Back in those days, although I did a lot of travel, there

wasn't quite the interaction that goes on today. So, I think there was a less clear picture

of what another country was like.

JM: Obviously your thoughts and professional time were given over to work at

the University, did it seem — as much as you can recall — a place that was in a very

dynamic period of its economic history?


DENNIS GILLINGS

JUNE 10, 1999 DG: That wasn't clear to me then. It became clear to me as I saw a lot of

companies building up in the Triangle, and I saw the universities continuing to expand.

Also, the airport and road systems expanding far quicker than I'd ever experienced in the

past. So, I believe by about the early '80s, I had really recognized that. But, I would say

that during the 70s, it certainly wasn't so obvious to me.

JM: How about your sense of the state's political regime in those years?

DG: Generally, whichever party was in, I felt very positive because they were

very supportive of education, it seemed to me. It did seem that North Carolina had made

a big investment in education. I was very much positive to that, very much so. So, I

found each successive governor pretty attractive from my point of view.

JM: Jim Hunt would've been serving his two terms in those eight years after you

arrived, 72 to '80.

DG: That's right.

JM: Before giving way to Jim Martin.

DG: Well, Holshouser-

JM: Oh, I beg your pardon. You're exactly right. Holshouser was 72, 76 and

then Jim Hunt.

DG: And then Jim Hunt, that's right.

JM: Indeed. Indeed. Holshouser the first Republican governor of North

Carolina.

DG: That's why I said both parties. When I first came, it was Bob Scott,

Governor Scott, if I remember.

JM: That's right.


DENNIS GILLINGS

JUNE 10, 1999 DG: I was fortunate, a bit fortunate, to meet all of them. So, I do remember them

as individuals.

JM: Anything especially noteworthy in this context of your early few years at this

university?

DG: One thing, I have to mention Bill Friday, which is part of the reason that I'm

at this interview. I distinctly remember Bill Friday as the president of the university

system and he would always say hello to you. In particular, he always said hello to me. I

was always impressed with that because he said it definitely as though he recognized me.

He may have had a talent to do that, but it seemed very genuine. I couldn't have been

more please when he always, every time I passed him, he said hello and it was very nice

feeling. He's a wonderful man.

JM: Tell me about this call out of the blue, as you previously described it, from

Hoechst in 75.

DG: Yes. Well, there was a statistician at Hoechst that made the call, and he

happened to have gone to school with Professor Gary Koch, that's spelled K-O-C-H.

Gary was the co-founder of Quintiles with myself and a strong colleague of mine at the

University of North Carolina at Chapel Hill. Apparently Ken had asked Gary's advice

about someone who might do a specialized piece of consultancy on a study. As a result

of that conversation, the statistician at Hoechst called me, and so to me this came out of

the blue. The problem roughly as follows, fifty-six people in the then West Germany had

died while at the same time they were on a drug that was for diabetes. It was an oral

sulphonyl urea. I think it's marketed today under the brand name of Diabeta. This

association that all these people had died, and they were at the same time on the drug,


DENNIS GILLINGS

JUNE 10, 1999 was a bit damning. There was great concern that the drug should not be brought into this

country, so I was asked to write an expert report reviewing what the reasons were for

these deaths and whether there was any association with the drug.

JM: Was it that episode specifically that immediately gave rise to this notion that

there might be a wider range of consulting work available to you if you sought it out, or

how did the consulting practice unfold?

DG: I suppose. I was so successful in that particular project that until this day I

[still] don't know whether I discovered something or whether the company already knew

it. On this project, I found out that all the patients were elderly and had excretion

problems through their kidney and liver. So, the drug built up in the system, obviously,

with people that had these problems, and they died from hypoglycemia, too low blood

sugar. My recommendation was that the drug just needed to be labeled so that these sorts

of people were not prescribed the product. I think that turned out to be an accurate

prediction. Now, what I don't really know is whether they already knew that. I thought

it was sufficiently easy to find out, so that I couldn't believe they wouldn't have known it.

But, who knows? I was sent these fifty-two hospital charts in German, or fifty-six I

should say. That's all I received. So, there was a lot of detective work that's related to

them figuring all that out. Now as result of that, I suppose there was a fair degree of

positive response because the report was very well accepted and it seemed to eliminate a

potential labeling problem about the drug. As a result of that, Hoechst asked me to do

several other pieces of work. Then other companies asked me to do several pieces of

work. That was definitely the founding event of that consulting in the pharmaceutical

sector. No question about it.


DENNIS GILLINGS

JUNE 10, 1999 JM: How did all this consulting work expand in the late 70s?

DG: By about 1980,1 might be employing about twenty students and research

assistants to help me with projects at any one time, but they would wane and lull and

surge and wane. It was by that time I realized that if this was to carry on, I would be

forever trying to find people and get rid of people. It seemed that if there was a sufficient

constant throughput, I might be able to set up a company. That's what happened in early

•82.

JM: Talk a little bit about the germination of that idea - how you thought your

way through putting a business together? Did you have mentors? Did you have models?

Were you flying by the seat of your pants? How does one do that, a university professor?

DG: I really--. Maybe it was by instinct. The only thing that I did was visit a

lawyer to find out what sort of companies you could set up. I discovered that you could

set up a company that was like an extension of your own alter ego, which was a

subchapter S. Basically, all your profits became part of your own taxable salary or

earnings. Or, you could set up a C corporation, which was a real entity that was no alter

ego. It was an independent entity, which had its own tax structure. There were different

advantages [to each one], but the one point I gathered was that a C corporation was a real

corporation with longevity in its own right. I plumped for that [one] because I thought

there would be more permanence attached to that. But apart from that, there wasn't really

any other advice, because I found the building where we would do it. I found the

business to put through the company and [I] employed the people. I did get the advice of

an accountant, obviously, to help set up the payroll system. That seemed pretty obvious


DENNIS GILLINGS

JUNE 10, 1999 that that's what we would do. In that sense, I followed my nose, but I didn't think you

had to be very smart to do that.

JM: You stepped away, in a formal sense, from the university in '82?

DG: No. Not until '86. Then formally, not until '88. What happened, from '82 to

'86, the company began growing strongly, but since I had good staff, it wasn't a full-time

effort by me. Probalby, I would say [it was] a half time [effort] - pretty much evenings

and weekends would take care of it. So for the three years, '82 to '85,1 was easily able to

continue my professorial appointment. What then happened was I began to see the

opportunity to expand even further, so I realized that if I carried on expanding and put my

full efforts into business development for the company, then I would have to give up my

professorship. What I decided to do was take a two year leave of absence to make sure

everything worked out. That was from the period '86 to '88. Then in '88,1 did tender my

resignation.

JM: By that point I suppose business had developed well enough that it didn't

seem obviously risky a move to step away from a tenured faculty position? You felt

comfortable with that decision?

DG: Certainly by '88. I felt pretty comfortable in '86, but there's no reason to not

have a security blanket. To other people, though—. I remember definitely some

colleagues saying, "How could you possibly give up a tenured slot for something that

was risky and totally unknown?' I suppose I didn't quite see it that way because in the

University there's a lot of what's known as soft money, which is grants and contracts from

the government and other sources. I really didn't see myself doing anything much

different. Perhaps the only difference was it was one hundred percent soft money instead


DENNIS GILLINGS

JUNE 10, 1999

of fifty or sixty percent. But, other than that, I felt that it was similar and in addition

there weren't a lot of rules that someone else set. I could set the rules myself.

JM: Give me an example of a bread and butter project early on in that early '80s

phase.

DG: Bread and butter. Well, we had--. I remember a cancer project where there

was a drug for colon cancer that turned out not to be efficacious. But of course that was

the charge, to try to figure out if it was or wasn't. It was an oral product that you would

take, and the idea was that it got to the colon cancer quicker than if you had an injection.

So, it was quite intriguing, but never worked out. I did a variety of studies. I'm not sure

anything was bread and butter. I was pretty good at the statistical side, but hadn't

necessarily worked in each of these therapeutic areas. I can go over--. We did [studied]

depression [medication]; we did peripheral vascular disease; we did sleep; we did

anxiety; cancer, as I just said; and arthritis. All those therapeutic areas were done

certainly in the first couple of years, so none of them were bread and butter because I was

continually learning new therapeutic areas and more about the biometric measurements

that would be the outcomes for those particular diseases.

JM: How did you find key colleagues, staff? What sorts of instincts and rules of

thumb did you use to put the group of professionals together?

DG: At Chapel Hill we had lots of good students. Students always need extra

dollars, so that was a remarkably potent weapon. They would work all hours of the day

or night. We would pay fifteen or twenty dollars an hour, which was very good money.

The students would work enormously hard and get things done very productively. There

was absolutely no problem. In fact, the students used to like it because they would work


DENNIS GILLINGS

JUNE 10, 1999 hard for a month, and they'd make a few thousand dollars, and they wouldn't have to do

anything. They'd go back [with time dedicated] solely to their studies. Now I also had

some research assistants who moonlighted. They were staff- programming staff and

other staff within the department. So, they moonlighted and that was good for them too.

JM: Tell me about building an entrepreneurial business in the mid-'80s in this

part of North Carolina.

DG: It wasn't very common, that's for sure. At least I didn't meet many other

people that did it. Maybe it was more common than I realize, what with my contacts

being mainly academic. You tend to stay often within your contacts. I suppose the other

part of that is my business wasn't all that easy to describe. We were doing what we

commonly call now "outsourcing" for the pharmaceutical industry in drug development.

At that time, for anyone to imagine that a big company like Glaxo might contract with

someone like me to analyze their studies didn't seem feasible because why wouldn't they

do it themselves? So, it was quite hard to explain. In point of fact, the explanation then

was far different from what it would be now because, I think it's fair to say, Gary and I

had a lot of skills. We probably had more skills than was present in most big

pharmaceutical companies at that time, so we were able to bring a skill level to the data

that was presented to the Food and Drug Administration that was a step up. Now a days,

of course, there's a lot more trained people and a lot more of that skill level would be

resident in the major companies.

JM: Were you ever offered the opportunity to come in house by anyone of them?

DG: Yes, yes.

JM: So people saw that as something that might make sense--.


DENNIS GILLINGS

JUNE 10, 1999 DG: That's correct. For me, it was a much better life being a professor with the

consulting than actually working for a corporation.

JM: Why were they outsourcing? [Was it] just a matter of not having the in-

house expertise? Why didn't they go out and get it?

DG: We tended to specialize in those early years in things that were quite hard

problems. Just take the fifty-six deaths. I don't know whether anyone in the company

would've solved that. Perhaps on the one hand there wasn't the confidence. Then, on the

other hand, there's always this thing - an external person that's a professor has a

reputation and an independence that lends greater weight to the conclusion. That's one of

those inescapable things that often happens.

JM: One of the things that's interesting about this study is exploring the extent to

which a regional distinctiveness is still evident in business. Were there times that it

mattered, in your effort to put this company and develop this company here, that you

were not a southerner?

DG: Oh no. I would say almost the reverse. It's probably fair to say that my

customers more came from New Jersey, but of course Glaxo and Burroughs-Wellcome —

at that time they were separate companies — were local customers. Everyone always

thought that we entirely developed because of those companies and that was not true.

The genesis came out of New Jersey, and then we gained other customers later.

JM: But you're selling a service, so place matters less, I guess.

DG: In fact, I often found that my English accent was an advantage. For some

reason it gets credited with intelligence. I don't know why. I get that sense in the United

States, maybe. You can judge [for] yourself whether you think I'm correct, but for some


DENNIS GILLINGS

JUNE 10, 1999 reason when it's put side by side with a native American [accent], for some reason it

sounds more intelligent. I'm not saying that with any degree of belief. I think it's

nonsense. It's an advantage, which I think I've benefited from. Very unusual that a

foreigner can actually benefit more than a native, or at least as much as native. I was

always struck by that.

JM: Any folks who stand out from these early years, mid- or late-eighties, as key

contacts, key sources of insight or perspective? Someone who you met along the way

who offered something to think about, that ended up being quite significant or opened a

door for you or gave you some regulatory insight perhaps?

DG: Some of the people, our customers [were important]. One I remember well,

Dr. John Nelson, who was the physician in charge of clinical research at Hoechst. He

was originally from Scotland. He was very focused on the point of the study and what it

was trying to accomplish. That focus and penetration of thought, I felt was a very good

thing. I did observe that and I got on well with him, I believe. Another colleague I might

mention, who was at that time at Bristol-Myers, was Dr. Joe Armellino. He certainly

taught me a lot about the development process for new drugs. So, I did find I was

learning a tremendous amount. I came at this from a narrow disciplinary skill and

quickly learned some of the business angles, like how to focus on what the key things

were and also some of the wider angles of what a pharmaceutical company is trying to do

and how does it get a new drug on the market. That did help me then with the next

iteration of the company, Quintiles, because I figured we could really manage a broader

process than just analyzing data from an individual clinical trial. We could manage all

the databases and we could actually run the clinical trials.


DENNIS GILLINGS

JUNE 10, 1999 JM: When did you really turn your efforts to that expansion of the services you

were selling or considered selling?

DG: Well, from '86 to '88 I put my attention at expanding the database

management and we expanded it across to the United Kingdom, so that it was

transatlantic. I did that first because I felt that Europe would become a single market.

Being from Europe or the UK, I was probably closer to that development. If it became a

single market, it would mean that drugs were developed in Europe much like they were

developed in the United States, which was not true in the '80s, so that made me decide I

needed to build a data processing and analysis capability [on] both sides of the Atlantic to

accommodate multi-national clinical trials. When that was successful, I figured that then

we could put in the expertise to manage the trials, design the trials, and monitor the trials.

So then, from '88 to '90, we began to put that in place.

JM: How dependent was that expansion on key hires at Quintiles? Did you have

to bring in--.

DG: Yes. Yes. I brought in Dr. Bob Butz who had worked for Burroughs-

Wellcome and then had branched out on his own. I was very impressed with him and so

he helped develop our clinical and regulatory capability. Also at that time Dr. Bill

Solliceto - he had been my research student and had joined the company right from the

outset — took over the management of the statistical and data responsibilities as I took on

a broader role, managing the whole company and developing the business of the

company. Bill was very influential in us making substantive progress. Then Rachel

Selisker, who is currently our CFO and has been always our CFO, she joined us in 1987.

She had been with us pretty much since 1982 because she had been the accountant that


DENNIS GILLINGS

JUNE 10, 1999 had audited all our accounts or really reviewed all our accounts. Then she joined the

company in 1987, so she has seen every dollar pass through the company. Then there

was another instrumental person, Sarah Creagh, who I brought in to manage the human

part of the business. This was an interesting story because we had a bunch of techies -

you know, programmers and statisticians. They saw everything as very tangible

scientific technology type things. When I proposed that Sarah come in as the heart of the

business, rather than the scientific structure of the business, people couldn't understand

what she would do. But that proved to be an immensely valuable appointment. That was

the case. There was also Sid White. I would like to mention him. Sid White had joined

us from the very earliest stage. He was an expert programmer and was able to, it seemed

to me, program anything and make any data analysis work. He was very instrumental.

JM: So there certainly was a connection to the university through folks—

DG: Absolutely. Yes, because of those people. Bill and Sid came directly from

UNC-Chapel Hill. A number of people [also had university connections], though.

Connie Morreadith, my secretary Bea O'Quinn, came out of the university. They had

either worked for me there or had moved onto other things and then came back.

JM: How easy or not was it to begin managing all of the business side rather than

the service provision side of a growing business? Did it suddenly start eating up all of

your time or were you able to—

DG: When it started eating up all of my time is really when we became

international because I needed to be both sides of the Atlantic at the same time. That did

transform everything into very high demand. No question about that. I probably

expanded internationally more quickly than anyone would've recommended I did, but I


DENNIS GILLINGS

JUNE 10, 1999 felt there was no time to lose. I calculated the European Union would come into effect at

the end of'92 or beginning of'93, 1992 or 1993. I'm blocking a little bit when it was. I

wanted to be there five years before that, so that was sort of by '87. In order to get the

full five years in, we had to be starting up there. We accomplished that. We started up in

the middle of '87, but we were really viable by the beginning of '88. So, we did have five

years before the European Union came about. To me that was important because that

was sort of roughly the same amount of time that the company'd been developed so far in

North Carolina. I felt we'd need the same amount of time to replicate it and may even

need longer because it was at a distance.

JM: Before we turn to the many issues related to international expansion, what

was your—. Here you are some years after having been working as a professor, you're

running a growing and dynamic business. Did you suddenly have to pay attention to tax,

fiscal, regulatory issues?

DG: Oh, yes.

JM: All that stuff. I'm wondering two things. One, whether or not the discoveries

you made and encountering all these things that were suddenly on your plate, how that

matched up against the perspectives you'd carried forward both as somebody who came

over from England and somebody who'd worked in the academy - that sort of academic

consideration versus practical. And also--. Well, let me just leave that with you.

DG: I actually think an education in England has some advantages because

there's a tendency to rely on a little more creativity in the earlier school years than rote

[learning] - turning back the answers to individual questions [to the teacher]. I have

noticed that as a big difference in my own education to what I see practiced here. We


DENNIS GILLINGS

JUNE 10, 1999 didn't have too many multiple-choice tests. In fact, I rarely took any the whole time I was

at school. The normal sort of test I would take, you'd study something for three months

and then you'd end up with a question that would ask you to amalgamate everything

you'd learned about that particular topic. So I was much more used to that method. I do

think when you are really exposed to that — if you succeed well in the educational system

— you develop a certain common sense and a certain way of figuring out how to proceed

with things. I would put that [describe that] as to then how I dealt with anything. I don't

know. Let's take legal issues. I tend to address [problems] in the early stages [of] legal

issues by asking myself, "What sounds right and what sounds wrong?" I think laws are

trying to generally get at a common sense good and evil, appropriate and inappropriate. I

remember writing up my first contract and I think I did a pretty good job. It just seemed

that in a contract there are certain things that you need to specify. I felt that was common

sense. As we began writing more and more contracts, then I began to recruit the talents

of a lawyer, but I did notice that they didn't change the structure that I'd put on it much.

They just added more words.

JM: Any sense at the time that there were areas of the law - areas of the state's

tax or fiscal policies — that were problematic for you as you tried to move your business

forward?

DG: Not really. I think we were fortunate that I founded a business that was

profitable from day one. The accounting issues seemed to me to be pretty

straightforward. Since you make more money than you spend, there is some bottom line.

You have some flexibility about whether you're [doing] accrual accounting or cash

accounting in the early stages. That I was not aware of, but of course Rachel advised [me


DENNIS GILLINGS

JUNE 10, 1999

on] what the most appropriate tax approach to that was. So on those technical things, I

always followed the advice [of experts]. Management issues I felt were reasonably

straightforward, because I think good management really is, again, identifying the

components of any problem and making sure each one is covered and followed up. Now

with respect to Human Resources, I think because there's a lot of laws about how you pay

people with pensions and fringe benefits and all the things associated with that, that as the

company grew larger - and as we began to bring in health insurance and sort of pension

related benefits and things like that - we did need advice on how to bring that in to the

structure of the company. We recruited a Human Resources person reasonably early on,

about 1988 or '89. We put someone actually in charge of Human Resources. That made

the development of that area pretty straightforward.

JM: How big is the company in '87 or so when you began to start looking

overseas? [What are numbers on] revenues and employees?

DG: Four million dollars of revenues and about forty employees. It was pretty

small.

JM: You mentioned you were profitable from the get go. Any occasion where

you had to go out and find a bank to give you working capital or something?

DG: Yes. One of the things that I calculated early on was that if we grew twenty

or twenty-five percent annually, we were totally self-sustaining. But, as we started

growing forty and fifty percent annually, we used up more cash in capital expansion than

we could generate profits. I came to this conclusion pretty quickly, actually. We did

have to start borrowing in order to finance that cash flow. To start with, we borrowed

through bank loans. I cosigned all the loans and they were secured against my house and


DENNIS GILLINGS

JUNE 10, 1999 things like that. As the company got larger, I think the banks were willing to continue

financing as long as all the assets of the company were put up. Then the next stage

really was to seek a little bit of venture capital. Now we weren't really a venture capital

company so much as we were at that time called mezzanine financing. It seemed clear to

me that [by] around 1990 we needed some financing like that for the main reason I've

just said. We were carrying on growing at that rate. The second reason [was] I felt that

we could then be valued high enough that we wouldn't overly dilute the ownership of the

company. So, for about twenty-five percent of the company, we were able to raise a

fairly substantial amount of venture capital.

JM: How did you go about that? How did you go looking for someone to fund

you, find the right sorts of perspective investors?

DG: It was odd how that turned out. There was a person called Epps Robinson

who was part of a limited partnership of what was then NCNB, which is now Bank of

America. At that time it was NCNB, before it was called NationsBank and then Bank of

America.

JM: I'm actually interviewing Hugh McColl on Monday.

DG: Okay. Well, at NCNB--. Sorry, I'm losing the question now.

JM: How you went about-.

DG: The venture capital. It was Epps Robinson. They had a limited partnership

and Epps Robinson sort of called me up out of the blue. It was funny. I don't know how

he learned about Quintiles, but he wanted to become an investor. That happened to be at

the same time that I was thinking we needed some infusion of capital through equity, but

I was a little bit queasy because it's your heart and soul, and you don't like to give up


DENNIS GILLINGS

JUNE 10, 1999 these shares all that easy. I must've discussed this with Epps for six months or more.

Then I finally said, "Look Epps. I don't really want this stage there to be a big

investment in the company, but I would really like someone on our board who was

knowledgeable about financial and business matters and capital formation. I feel that if

that person had a modest investment in the company, that would be the best of all

worlds." I think the actual figure he invested was $140,000. It was very modest and it

wasn't really for the capital. It was more so that he had put some money down and then

we would value his advice. Putting your money where your mouth is. That was the

proposal I gave to him and he accepted it.

JM: This was about 1990?

DG: This was about 1989 or 1990, something like that. From there, as we were

more comfortable with that, he introduced us to people that were venture capitalists that

would put more money in. That's how that whole thing evolved.

JM: Did that tend to be a circle of North Carolinians initially?

DG: It was really interesting because NationsBank had a connection with a

London bank called Panmure-Gordon. I don't know whether they owned them or what it

was, but there was a connection. Through that connection I was introduced to Richard

Thompson of Thompson Clive. Thompson Clive was a London based venture capital

group. Since we were international, I was quite interested in that. Thompson Clive or

Richard Thompson wanted to invest, and we came to an agreement. At the same time

Epps Robinson invested more, and then there was a third investor, David Smith, who

unfortunately now has recently died. David Smith had founded Praxis, which was a

biotech company and sold that company to then American Cyanamid. Then David had


DENNIS GILLINGS

JUNE 10, 1999 retired from that situation because he had made some money and was then looking to

make some investments. I had met David earlier because we had helped him with his

drug that he developed at Praxis. He also became an investor, so we had three different

investors that in combination raised money for about twenty-five percent of the company.

JM: You mentioned one advantage to Epps Robinson's participation was that he

could bring a certain sort of financial expertise to the board. How did you go about

putting a board together from the early stages and then how did you gauge the need for

new sorts of perspective and expertise to add to that?

DG: Well, in the earlier stages, I used valued advisors and colleagues. Professor

Chester Douglas, who had been a colleague of mine — he was at Harvard — joined our

board. Then Dr. John Fryer - who had actually been a colleague of mine back in the

United Kingdom and then he'd come to the University of North Carolina to assume the

professorship in biostatistics that I had vacated - he joined our board. Then with the

venture capitalists on the board and myself, we began to have a really viable board.

JM: Let me step out of the narrative of the company's expansion for a moment.

What instincts, what expectations guide you in finding your way into professional

business relationships with other persons? How do you hire? How do you make

assessments of people you want to have participate in your venture?

DG: Well I think there has to be a certain chemistry on the one hand. I actually

look for people that are strong at things that I'm not strong at when I'm hiring. I actually

look for people who have accomplished something on the grounds—.

END OF TAPE 1, SIDE A


DENNIS GILLINGS

JUNE 10, 1999 START OF TAPE 1, SIDE B

JM: [This is side] B of the first cassette [of an interview] with Mr. Dennis

Gillings on the 10th of June, 1999.

DG: I don't hire from the perspective of employing a superman or superwoman

who's skilled at everything that you can possibly name. Particularly as the job gets very

senior, there's a tendency to demand someone who is skilled at everything you can

possibly think of. I'm not a believer, myself, in that. I believe that it's a little

counterproductive to what I call the team effort. I look for team players because if you've

got a superman, there's also the tendency that everyone else pays lip service to them. If

you generally believe that individuals bring key talents and skills, and perhaps other

secondary skills, you tend to look towards the people with the key talent as being the

spokesperson for that talent. That then builds a team akin to a good basketball team or in

England a good football, or soccer team as it's called here. I tend to aspire to the sporting

analogy of a good management team. Therefore, as you build some components, then

you look for the other components, and you build accordingly.

JM: Did you ever have to stop and reflect on how you were perceived as a leader

and what sort of style you have not as a leader, but a manager? Or was it a natural thing

that sort of evolved over the years?

DG: Well, the funny thing is I never really perceived myself as a leader. I also,

though, strongly believe that if you're in a role, you've then got to execute that role. I

think if I exercise leadership, it's because it's the role that was then ordained for me in

some fashion, either because I created it or—. I suppose it was possible that someone

else would've founded the company and then I worked for them, but that was not the way


DENNIS GILLINGS

JUNE 10, 1999 it happened. Since I had the head role, I in my mind staked out those things that the

person who is at the helm should actually do. If they're consistent with leadership, well

then, maybe I've done some things right. I do think setting an example and aggressively

showing the way forward and accomplishing things that you say you want to accomplish

and people see you accomplishing things are some ingredients for leadership. They're

not the only ones.

JM: Let me turn to your evolution of your strategic vision for the company. [The

company is] incorporated in '82. By '86 you decide it's time to take a leave [from the

university] and your efforts [to the company] full time. What's the prize down there

road? What's pulling you forward? Where are you wanting to go?

DG: Well, it's changed over the course of time. I think to begin with it was this

independence and capability of having an organization that did what I thought was very

socially responsible work. You know, does a new drug work and how do you get people

better and making a sound economic living and creating nice jobs out there. That was the

original motivation. I think as the company grew though, a broader motivation crept in,

particularly as there were no financial issues. Really, I never developed a company for

money anyway. It's just that you need, obviously, some financial rewards to feel

comfortable. As we began to be successful financially, actually the part that grabbed me

was, we may be able to build a company that makes a difference. That's really what

drives me now. It's evolved from being independent to, can you make a real difference?

JM: What's the difference? What exactly do you want to accomplish?

DG: Well, the pharmaceutical sector is extremely productive in inventions.

Only, too often inventions don't get to human beings very quickly. Sometimes they're not


DENNIS GILLINGS

JUNE 10, 1999 developed in an efficient manner, so they could fall by the wayside. What we would like

to do is bring new medicine to people more quickly and help the system of health care be

more efficient.

JM: Let me take you back-. Step back into the narrative story of Quintiles. It's

1987. It's the end of the Reagan era. [It's the] opening to George Bush's term, obviously.

There's a certain type of spirit in the air in terms of political philosophy in this country.

That has implications, obviously, for the health care environment in this country. You'd

come from another place and had a different perspective and pattern of experience, I

suppose, growing up in the UK. What measure did you take of US health care delivery

generally and in comparative terms in particular? I'd be interested in how relatively

efficient, how relatively socially advantageous—.

DG: Oh, sure. That has changed from then to now, actually. Back, let's say, in

the '80s, I think health care in the United States was a bit more expensive than elsewhere.

It also seemed as though there was less access to [healthcare] for the whole population

than there was certainly in the United Kingdom, where pretty much everyone got equal

access. Maybe very wealthy people got super access, but that was such a tiny thing that it

didn't seem to make a lot of difference. I think health care, although it remains expensive

in the United States, with managed care and the competition, is--. Probably the amount

by which it's more expensive than other countries has lessened a little bit. I don't think

that it's quite such an issue that it was some time ago. I think the fact that you only tend

to get good access to health care if you're an employed person is probably a big

difference. Generally, you have to go on welfare outside of [employment to get

affordable access to healthcare]. That big difference is so socially—. One is aware of


DENNIS GILLINGS

JUNE 10, 1999 that. It does put a little bit of a stigma to some extent on the United States because it's

clearly wealthy enough that that shouldn't happen. Obviously, an appropriate system

can't be found. That access issue is a big difference between what I was used to in the

United Kingdom and throughout Europe and in the United States.

JM: Tell me some stories about taking the company overseas and finding new

markets and building businesses there. No small task.

DG: No. That's true. I mean, I was at a bit of an advantage, I should say, in the

UK because I came from there. It didn't seem anything other than going home. The

objective was to then build the company in continental Europe, so we could have this

trans-European capability. That's exactly what I proceeded to do. We first built it in the

United Kingdom. After that we set up in Germany, in Ireland, in France, in that order.

After that, [we set up] in several other countries and now we're present in every country

in Europe.

JM: In those early instances, are you opening new business or acquiring

[companies]?

DG: [We were] always opening new businesses. At that point we didn't acquire.

Even to this day — I think I'm right — we've always opened up in a country before we've

acquired in a country. We've never actually gone to a country through an acquisition.

I've had a specific purpose there. I do think multi-national organizations are quite hard to

build. I've always had this inclination to understand a little bit more about how business

is conducted in a country and learn, if necessary by a few mistakes of hiring people,

before thinking about making an acquisition.


DENNIS GILLINGS

JUNE 10, 1999 JM: What was the pattern of experience you had, first in England and then you

said in Germany, France, and Ireland?

DG: I think in England it was, if anything, a little bit easier than here. Not

because it would've been easier absolutely, but because we were backed by a thriving

business. That reputation enabled one to get the work that generated the business. I think

in the other countries it evolved because of the sorts of businesses we were developing in

the United Kingdom. That tended to be trans-European and so we developed business in

Germany and therefore needed a German organization. We developed an organization in

Ireland in part because of some of the financial incentives that we were given by the Irish

government. I don't want to say this in a detrimental sense, but that was almost like an

extension of the UK. It's a different country, but English is the language. It's close. It's

less different and all the structures were pretty much the same. Starting a business in

Germany, though, is entirely different because you do get the continental Europe legal

systems rather than the Anglo-American type legal system. A little later we went to

France. That was probably the most difficult because we'd never really had a full start.

The first head of our French unit didn't work out, so we then had to replace that person.

That was an example of an initial mistake and then trying to correct it.

JM: How was the CRO sector evolving in these years, the late '80s or early '90s?

DG: Well, very strongly because the actual market itself was growing strongly. I

would estimate that the demand was growing by between twenty and twenty-five percent,

so we were growing more like fifty percent a year. We tended to double or more than

double the growth of the market. In a growing market it was less that you were taking


DENNIS GILLINGS

JUNE 10, 1999 something from someone else, more that you were taking more than your share of the

new stuff. That's how we expanded.

JM: At what point did you take the decision to say "We will move very

aggressively in many corners of the world?"

DG: Well, once we began to be successful in Europe--. I should mention Ludo

Reynders, here, because Ludo is now the CEO of our CRO Division. He started in 1988

and was the head of the UK and then became the head of Europe and the CRO. He was

very instrumental in our success throughout Europe. I think that success caused us to

expand all over Europe and then caused us to look further afield toward the Asia Pacific

region, in particular toward Japan and other countries. Now there was another thought.

You see, pharmaceuticals is a global business and at the same time there was a movement

for intellectual property rights to be more widely recognized throughout the world. It

started at what was the Uruguay Round and ended up in the World Trade Organization.

Now generally it is thought - by at least the people that I talk to — that by about 2005

most countries in the world will pretty much recognize intellectual property rights. Back

in the early to mid-nineties I felt that the recognition of intellectual property rights was

going to have a big impact on the pharmaceutical sector. In particular, [I thought] it was

ultimately going to create a bigger market place in Asia because there was a fair amount

of avoidance of intellectual property rights [there], so there was less incentive for many

pharmaceutical companies to develop products in [those] particular countries. With that

thought in mind, which was not unlike my European Union thought in the middle '80s, it

was the rationale why Asia would ultimately become important. The other thing I

realized [was] since I didn't know Asia, instead of a five year lead time, I probably


DENNIS GILLINGS

JUNE 10, 1999 needed seven to ten year lead time. So, in the middle '90s through to now, we started

developing in that region with the anticipation that by about 2002 to 2005 we'd be in a

strong position there. If the market had gone like we envisaged, we would be in a

position to lead the market growth in these regions. So that was the theory.

JM: How did you manage this cross-cultural bridging? It must be a problem of,

or a challenge of many facets.

DG: Well, I'd wouldn't like to say there was any great talent there [on my part],

because I don't speak Japanese or anything. I think one thing you do do is observe, and

you try to behave politely within the culture you're in. You learn a few things so you can

do that. I mean, when we go to Japan we always take gifts. I always bow and I know

when to bow a little bit or a lot and when to do it. I know the greeting. The thank you

and the apology is a successively deeper bow. Those sorts of things you don't have to

spend a lot of time learning, but I think they make a very big difference. I think the other

thing you must be careful of, is not assume the country is your own country. You must

assume it is a different country. Therefore, you try to show respect for the cultural ideas

or prevailing ideas within that environment. That's what I do. I will take pains to travel a

little bit in a country before setting up a business there. For example, I made about three

visits to China and toured around China before we established a business in China. I

think those sort of things are important.

JM: It sounds like a fairly simple strategy, really.

DG: Yes. I don't think it's too--. It's not Nobel Prize winning. I would call it

common sense.


DENNIS GILLINGS

JUNE 10, 1999

JM: But there's got to be a part of this that - at least on two fronts - that's got to

be more complicated still. One is integrating overseas portions of your company into

whatever Quintiles's institutional cultural and enterprise is. That's A. B, deciphering the

particular regulatory regimes of these places. What are your strategies there?

DG: The regulatory regimes are not too difficult because the FDA does set a high

standard. That's not to say it's the only standard, but if you satisfy the FDA, you do tend

to satisfy most of the other things as a general rule. We actually work towards what we

call the ICH standard, which is the International Conference on Harmonization of

regulations across Europe, North American, United States, Europe and Japan. That isn't

so different from the FDA standard that that keeps you in good stead. I think on the

regulatory side since the US is so widely recognized as having strict regulations, we have

a natural advantage there. Now on the integration, if I understand your other question

across the different cultures and management styles, I think you have to tackle it a little

bit by--. First of all, you do have a little bit of representation from each. You have to

work at that. It's no good trying to ran China and just sending Americans there, and you

think that's sufficient. If you can't find the trained people, you may still have to send

someone there, but you have to have a strict plan to recruit and train and bring the local

nationals to the management positions. I tend to have the rule in my mind that you've got

to aim for strong local management. But I never like saying a rule that you can never

violate. It's more that's what your goal always is. Now if you do do that, I think you do

allow each country to feel it's participating. Then I think at the next level of management

where the overall corporate management is, you have to again be careful that you have

some representation that's reasonably broad.


DENNIS GILLINGS

JUNE 10, 1999 JM: Tell me about how - in managing these sorts of processes — how your daily

calendar has evolved over the last ten years, ten to twelve years, when you really started

to--. How do you spend your time? How has that changed?

DG: Well, the biggest issue more recently is the pressure for my time. You have

to have a group of people helping schedule [your time] because you can't actually even

remotely field all the things yourself. You have to have people that are assessing who

wants to see you and trying to work out priorities and making suggestions, which you

then agree with. That's a relatively recent phenomenon. I would say that's more a

phenomenon of the last two to three years. This past year it's gotten quite excessive.

Now prior to that, something like half my time was people wanting to see me or events

creating the need for me to spend my time that way. The other half was pretty much

[what] I determined I would focus on to grow the company.

JM: Strategic thinking.

DG: So that was naturally how it tended to be. I've always been, I think, a

reasonably good delegator. I've never tried I think to overly manage the day to day

operations of the company. I've been bringing [in] good managers and generally

delegate. During the period [of], let's say, '90 through '96,1 was first of all learning how

to run a public company

JM: I'll have some questions about that too.

DG: And then we took it public and then [I was] learning how to do some

acquisitions. I think [I was] getting more skilled at integrating those and managing the

growth. More recently, I suppose in general, that was the lesson. You said "How do I

manage my time and how do I deal with it?" For those years, was all you had to be good


DENNIS GILLINGS

JUNE 10, 1999 at was prioritization. As long as you were focussed on prioritization--. I tend to be

reasonably good at that. I don't waste a lot of time, I don't think, on social chatting or just

doing things that won't be productive to the business. The last two to three years, though,

has been somewhat different because as a company grows, I think you have a community

responsibility to a greater degree. You're also the leader of a larger group of people, and

you have to behave a bit "presidential" on occasions. If I'm invited to open a new

building in our company somewhere, I think it's only with a fair amount of thought that I

would turn that down because otherwise the company would not feel you're the leader.

So the numbers of things like that vastly increase as you're in thirty odd countries with

18,000 people. You obviously have a lot more of that. You also have a lot more need to

talk to the press and be responsible community-wise. I sit on boards and other entities. I

think, in part, because I think it's a good thing to do, but also, in part, you feel you have a

community responsibility. Your company would have a bad name and would not show

leadership in the broad sense, if you didn't do that. So these things become much more

prevalent, and you have to make much more choices; therefore, the choices get more and

more complicated. So that has been a feature, I suppose, of success and growth. That

certainly is the situation now. That wasn't true five or ten years ago.

JM: Let me take you back again to this period, say starting '87 [and] forward,

where you were really looking to move the company with a lot of overseas growth and

expand your range of service provision in many new fronts. One very interesting

question, I think, is that—. You mentioned earlier today that you were able to draw upon

the advantages of style and intellectual training, if you will, of the British system with

some general regard. That will probably be at play here in this question. I'm wondering


DENNIS GILLINGS

JUNE 10, 1999 what sources--. Broadly speaking, what are your sources of information and perspective?

Not just narrowly, saying just within this expanding industry, but more generally. Where

do you turn? What sorts of things illuminate and advise and inform you as a business

leader?

DG: I naturally I think I store away information and analyze it as a trend. I think

that's a natural thing that I do. I also both quantify and subjectively prioritize, in some

non-objective way, all the information that I get. I think that helps identify the business

trends that should be in our sphere of influence. Perhaps there are two sorts of trends,

those that are emerging inspite of you and those that could emerge more strongly if you

did something. With an identification of which sort you're in, if they're going to emerge

in spite of you, you'd better do something about it anyway. If you could lead them-.

Obviously you want to lead it, but you can only lead it if you have the right tools at your

disposal, and you may have more flexibility of timing of how you go about it. A healthy

regard to those things and a constantly learning by iteration-. I mean, some people I find

that you have a conversation with, and then the next time it's as though it never happened.

There's no behavioral change. I like to think that as each day goes by, I have a degree of

behavioral change because something new has occurred.

JM: Let me see if I can pursue this through a little bit further. What do you read?

What is your social circle like? What are the sorts of things that impinge on your

attention outside of this office?

DG: Well, I suppose one thing is that when you're bora in one country and live in

another and routinely travel around the world, you do get a perspective that would be

very hard to get if you stayed in one place. That is definitely the case. Just by comparing


DENNIS GILLINGS

JUNE 10, 1999 the British health system and the United States' health system you can by personal

experience-. You don't have to be an academic. You don't have to read the New

England Journal of Medicine. You can glean an awful lot. I do think worldliness has

played a large role. I think that lots of colleagues would come from different places and

friends. I would probably rate that as the highest individual thing in my own case.

JM: I want to look at the clock here. We probably have just a few minutes here

before we should comfortably end. I'm wondering if in fact this might not be a bad spot

to stop, if we could maybe look some point further down the road about all of the

expansion of the business and so forth.

DG: Perfect.

JM: The IPO.

DG: That would, because the part that you have ahead is a fairly long part and

probably would be a nice one to one and a half hours continuously.

JM: Good. Thank you so much.

DG: Perfect.

END OF INTERVIEW


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