A couple of years ago, a bombshell of sorts hit Gerald Proehl’s company, Santarus Inc.
It was a Paragraph IV certification — an industry-specific name for a problem that too many companies deal with.
Basically, another company wanted to make Santarus’ product and was taking action to try and make it legal. If you’re at all familiar with what a Paragraph IV patent certification is, you know it is one of the channels by which a generic prescription drug company can attempt to replicate a brand-name prescription drug company’s products and take them to market.
In this case, it was Zegerid, Santarus’ flagship product — a proton pump inhibitor that treats acid reflux.
“Our stock was trading at about $6 a share, and it went down to $2 a share,” says Proehl, Santarus’ president and CEO. “It has been a big overhang of the company for really the past two years. It has forced us to focus on the things the company really needs to do to be successful but still not knowing what the final outcome is going to be.”
It was the air of uncertainty that provided Proehl with his biggest challenge as he attempted to pull his company — which generated $130 million in 2008 revenue — through a swamp of patent litigation, case building and, ultimately, not knowing if its backbone product would become, in essence, a shared property with a generic prescription company.
Employees want certainty and stability in their company’s performance, and when you can’t totally guarantee it, sometimes you have to focus your employees on what you can control. A big part of that is frequent and frank communication.
“There are certain things you can’t control, and in our industry, you can’t control whether someone files a Paragraph IV on a product, so you go through the process of keeping people updated on what happens along the way, as far as the different points along the litigation,” Proehl says. “You keep them informed, but beyond that, you keep them focused on what you need to do to be successful.”
