Jeff Yordon takes a tremendous amount of pride in the work that is done at Sagent Pharmaceuticals Inc. But he completely understands that most people would do just about anything to avoid ever having to use his company’s products.
“Injectable pharmaceuticals by definition are acute drugs,” says Yordon, the company’s chairman and CEO. “These are life and death kinds of drugs. I tell people you don’t want to wake up in a hospital room and see the name Sagent on the label because you know you’ve got a problem.”
Yordon is in his 44th year in the injectable pharmaceutical business. While nobody wants to have to use his product, there are countless people around the world today who wouldn’t be alive if it weren’t for the medicine that Sagent manufactures.
“We are one of the major suppliers of a drug called heparin in the U.S.,” Yordon says. “Without heparin, there is no surgery. So unless we provide that, surgical procedures won’t happen. Heparin is also one of the most dangerous drugs in the world for the simple reason that there are nine different codes or strengths of heparin — and seven of the nine are in exactly the same size container.”
The bottom line is Yordon and his team of 269 employees at Sagent can’t afford to make mistakes. They also need to do whatever they can to ensure that mistakes aren’t made by those who use the company’s product to help their patients. It’s that mindset that drove Sagent to develop vibrant colored boxes with unique lettering for the different types of heparin to reduce the chances of it getting misused.
“The equivalent of about four 747s going down with everybody being killed is how many people die from heparin mistakes each year,” Yordon says. “I feel tremendous pride that we are significantly lowering that amount and helping to save lives.”
It’s an impressive success story, but there were many skeptics when Yordon set out to construct the company known today as Sagent Pharmaceuticals.
“I am an unusual person,” Yordon says. “I probably had two people out of 100 that said it could work. But you know, when you embark upon something like this, you better damn well believe that it’s going to work or you’re just wasting your time.”
Show the way to prosperity
In 2005, Yordon traveled the world and found a number of small companies that had begun building or had the desire to build facilities and develop products to supply to the U.S. market.
Yordon wanted to help these companies achieve their goals.
He offered them the support they would need to ensure that once they were opened, their facilities would be approved by the Food and Drug Administration.
“We would be in charge of all their regulatory filings,” Yordon says. “You’re sitting in rural India dreaming of putting a submission in to the FDA. How do you do that? Well, we would do that for them and be their regulatory agent. And finally, we would be their exclusive marketer of these products in the U.S. and North America.”
The result was a consortium of 48 different companies in 23 different countries with a total of 38 facilities, all of which have earned FDA approval since connecting with Yordon.
The challenge in creating that consortium was the fact that it was made up of people who weren’t employees of Sagent.
Yordon sold them on the opportunity to be part of something special, something that would make a difference in the world, even if they weren’t technically his employees. Then he asked them to make a formal commitment to making that happen.
“Not only did they sign commercial agreements for sales, development, etc., but they signed quality agreements that assured they would implement our quality systems and work to our quality standards,” Yordon says.
As for his own employees, Yordon asked them to work harder than they had ever worked before. But there would be a payoff.
“Every single person in this company, including the janitor, has stock options,” Yordon says. “To see them have a chance to be facing their retirement years with enough money to enjoy life is an extremely important thing for me.”
That was the goal for his team at Sagent.
The first step to finding quality people who are willing to work with you in an environment where there is no margin for error is to clearly demonstrate that your plan is not about boosting your own ego.
“I have always tried to find the best person that was out there,” Yordon says. “I don’t care about race, color, creed, sex. In fact, I was asked recently why I have so many females in higher management positions. My answer was that I didn’t realize that I did. I just hire people who are the right people. I’ve never been afraid to hire somebody who potentially was good enough to take over my job.”
Another crucial step is to be diligent about connecting with customers to ensure that you are producing something that they want. Yordon says this is an obvious point, but adds that many companies fail to do it.
“If you continue to do things the way you did them when you first started, you will not succeed,” Yordon says. “You have to be willing to change and you have to be willing to listen. Be ready to listen to new ideas. Be willing to say that’s a better idea than I have. Be willing to jettison a plan that you know isn’t working.”
Live by your standards
Yordon bolstered his commitment to excellence by hiring a team of people with “incredible scientific knowledge” who could serve as an added layer of accountability to ensure that Sagent was getting the job done.
“They also had to have knowledge of the business and be able to negotiate,” Yordon says. “Most importantly, when a partner has a problem with the development of a product, we don’t simply just change the date. We solve the problem and stay on track.”
These leaders, known as global alliance managers, would each have five or six companies that they dealt with.
“Their objective is that there will be a certain number of products submitted to the FDA and a certain number of products launched,” Yordon says. “Their job depends on hitting those dates, regardless of what problems arise. So it’s an incredible challenge and it’s worked.”
Yordon says the average competitor of Sagent submits four or five products a year.
“In our first two years of existence, we submitted 85 products,” Yordon says. “That meant we had to hire an incredible regulatory group, put in our own electronic filing software that we created ourselves and be in a position to be able to file these things ourselves independently. But more importantly, to only file submissions that we knew were pristine and would flow through the FDA as quickly as possible.”
Yordon says he is often asked what it’s like to work under such stringent conditions.
“I’m always asked how I handle the pressure between commercialization and all of the quality conflicts that are there constantly,” Yordon says. “The answer is we have no conflicts. We always do the right thing.”
That sounds like a very authoritative way to lead a business and the pharmaceutical business does not leave much room for personal interpretation. But that doesn’t mean Yordon insists that everybody do everything exactly the way he wants it done.
“My management style is that we’ll agree on what the objectives are and then you’re empowered to do your job,” Yordon says. “I can tell you I probably have had experience in almost any facet of this industry. If you want my help, I’ll be happy to help you. If you don’t want my help, do it your way as long as we hit the objective.
“I was able to convince a lot of people in a lot of other companies that had had exposure to me that they believed in the vision. They liked the entrepreneurial feeling of the company. They liked the autonomy. They could live with accountability, and most importantly, they liked being empowered. I don’t look over their shoulder. If I have the right people, which I do, I know they will get the job done.”
The numbers reflect Sagent’s ability to get the job done. The company went public in 2011 and has seen its net revenue increase from $74 million in 2010 to $244.8 million in 2013.
“We’re in a position that we are constantly now being contacted by foreign companies who would love to enter the U.S. and look at us as probably the No. 1 potential company to partner with as they move forward,” Yordon says.
And while Yordon has found effective ways to build Sagent for today, he reiterates his firm belief that those tactics may not work next year.
“I would say 80 percent of what I did that made me successful 10 years ago I don’t do anymore, because that won’t make you successful today.” ●
- Find a way to make a difference.
- Get the best people you can find.
- Get comfortable with constant change.
The Yordon File
NAME: Jeff Yordon
TITLE: chairman and CEO
COMPANY: Sagent Pharmaceuticals Inc.
Education: Bachelor’s degree, political science, Northern Illinois University.
What intrigued you about political science? I was almost sure I wanted to be a lawyer. Back in those days, political science was the way to go for law school. I got accepted to a pretty prestigious law school and was offered a job as a pharmaceutical salesman in Chicago. I decided that I would try that and if it didn’t work, I would go to law school. So I’m seriously considering pharmaceuticals now as a career.
Talk about how you got your start as an entrepreneur: When I was a freshman, I went into a lumber store and I saw some guys unloading a freight car of lumber. I asked the one, ‘What’s that all about?’ He says, ‘Oh, these are some guys that come in and we pay them to unload.’ And I said, ‘Well, can I bid on that?’ And they said, ‘Well, we don’t bid on it.’ And I said, ‘Well, can I bid on it?’ He said, ‘Sure, but you have to have your own lift truck.’
So as a freshman in college, I bought my own lift truck, and I bid on it with a little help from a friend. They pay a lot of money to unload these giant freight cars with lumber, so it got to the point where I then offered my fraternity brothers a chance to work. I’d pay them an hourly wage, and I would average about $2,000 profit per car after probably giving 10 of my fraternity brothers hourly pay. Plus I was able to pay off the loan on the lift truck. So that was one way I got through college.