Boron, LePore & Associates, Inc.
Boron, LePore & Associates, Inc.
Sales: $167.9 million (2000)
Stock Exchanges: NASDAQ
Ticker Symbol: BLPG
NAIC: 561499 All Other Business Support Services
Boron, LePore & Associates, Inc., now doing business as BLP Group Companies (BLP), is a Wayne, New Jersey, medical education communications agency that offers a broad range of services to more than 50 clients, including such major pharmaceutical firms as Bristol-Myers Squibb, Bayer, Merck, and Roche, as well as biotech firms, managed care organizations, medical societies, and trade associations. With its network of wholly owned communications companies, BLP organizes peer-to-peer meetings and symposia, creates continuing medical education programs and distance learning programs, and offers speaker training, advocate development, publication planning, and editorial services. BLP maintains a large database of people who attend its hosted events in order to provide follow-up and to generate audiences for future events. Although in recent years it has expanded to offer product marketing, contract sales, and sales force logistics, the company is deem-phasizing these areas in order to position itself as the country’s only publicly traded, pure play medical education company.
Company Origins to 1981
BLP was founded and incorporated in New Jersey in 1981 by Thomas S. Boron as a boutique marketing research firm for pharmaceuticals in Bergen County, New Jersey. The company organized focus groups of doctors in order to provide feedback on clients’ products. Out of this work grew peer-to-peer dinner meetings that became the backbone of the company’s business. At these dinners, ten to 12 doctors or other healthcare personnel discussed a client’s drug, with BLP personnel acting as moderators. The company would then codify the responses for the client. In the process, BLP began to build up a database of participants to these dinners. This information allowed for follow-up and helped in generating lists of future peer-to-peer dinners. As business increased, Boron added staff, including Thomas Boron’s brother, Gregory, who joined the company in 1985 after serving as a major in the U.S. Army. Also joining BLP in that year was Patrick G. LePore, who had been employed the previous six years at the pharmaceutical firm of Hoffman-LaRoche, serving as a product manager for two years before becoming a product director.
Gregory Boron became BLP’s chief financial officer in January 1991. A year later, Thomas Boron stepped down as the company’s chief executive officer in favor of LePore. The peer-to-peer business grew modestly, topping $20 million in annual revenues in 1994, resulting in a $1.6 million net profit, generated by almost 4,000 peer-to-peer meetings. The landscape in the healthcare industry, in the meantime, was undergoing some significant changes, with the growing influence of health maintenance organizations leading to increasing emphasis on cost containment. BLP’s pharmaceutical customers now began to look for ways to reduce operating costs and elected to outsource such functions as research and development, as well as marketing and sales. To take advantage of these new opportunities, BLP began to position itself to offer more services to a wider customer base.
In 1995, BLP hosted more than 4,300 meetings and introduced educational conferencing services geared toward physicians and other healthcare professionals who were required to complete a minimum number of hours in continuing education in order to maintain certification in their professions. For the 50 to 350 participants that attended these conferences it was a way to fulfill requirements at no cost. For the pharmaceuticals that funded the conferences it was essentially a marketing expense. In fact, some of the conferences were not intended to satisfy continuing education requirements. Because BLP was not an accredited organization, it worked in conjunction with universities and other educational organizations that were responsible for producing the program curriculum and educational materials. BLP also taped the conferences and provided them to professionals who were unable to attend. Revenues for this new business were $1.2 million in 1995.
Introducing New Services in 1996
In 1996, BLP significantly increased the number of peer-to-peer meetings it hosted to more than 7,700 and introduced more new services, resulting in $40 million in revenues, almost double the total from the previous year. Not only did BLP also increase the number of educational conferences it hosted, it offered other conferencing services that were more clearly marketing oriented. Pharmaceutical companies sponsored the events with the help of BLP, retaining medical experts to discuss a client’s new drug or some other pertinent medical topic. BLP took advantage of new technologies to televise the conferences via satellite to a number of U.S. locations. Audience participation at remote locations was achieved by the use of two-way audio as well as special keypads. These capabilities formed the basis of BLP’s new teleservices business, which offered an inexpensive alternative to in-person sales calls in order to promote, market, and sell drugs or other products to a wide variety of physicians, pharmacists, and other healthcare personnel. BLP was especially optimistic about making these services available to smaller pharmaceutical companies that wanted to promote a product without incurring the expense of purchasing their own telecommunications equipment. For the year, the new teleservices business generated nearly $1.4 million, and the company initiated plans to open a teleservices center in Norfolk, Virginia. Also in 1996, BLP introduced product marketing services, providing pharmaceutical companies with the opportunity to increase sales on products that they might not have enough resources to promote. Furthermore, BLP looked to obtain the rights to market certain products, thereby increasing potential rewards, although the company assumed greater risks if it failed to reach sales levels commensurate with promotional expenses. In the fourth quarter of 1996, BLP augmented its peer-to-peer meeting business by organizing symposia that were similar to its educational conferences but conducted on an in-person basis only. A typical symposium was staged over a weekend, attended by 50 to 300 physicians and focused on a particular drug or treatment protocol. Paid experts in the field made presentations to the attendees, who in turn were being groomed to serve as consultants or spokespersons for the sponsoring pharmaceutical company. BLP helped in all phases of planning a symposium, from choosing locations and arranging travel for participants, to identifying likely speakers. The company also had to be vigilant about making sure that symposia followed the guidelines set down by industry and professional associations regarding travel and lodging expenses and other payments to physicians, which had been instituted in order to prevent conflicts of interest. Because the profit margin was lower than that of its other services, however, BLP elected to pursue slower growth in this area.
In light of its rapidly evolving business, BLP began to reorganize late in 1996. The company was reincorporated in Delaware and LePore became chairman of the company in addition to his chief executive responsibilities. Gregory Boron was named chief operating officer and an executive vice-president. In 1997, BLP began to offer contract sales services, essentially creating a boutique sales operation to fill in the gaps created by staff cuts in large pharmaceuticals. In addition, BLP hoped to target emerging pharmaceuticals needing help in launching their first products. BLP’s database of physicians who had attended its peer-to-peer dinners and conferences over the past decade proved to be an important asset in this regard. According to Boron in press remarks, “As a result of our invitations to all of these dinner meetings that we do, we call 6,000-8,000 doctors a day; that database is updated daily. We know when a doctor opens his office, who his receptionist is. We know who stocks his closet. We know who invites the doctor to the meeting. We know what meetings the doctor attended, when he attended them and what he reacts to.”
Going Public: 1997
To fuel its ambitious program, BLP went public in September 1997, selling more than 3.7 million shares at $17.50 each to raise $65.4 million. BLP stock, trading on the NASDAQ, would subsequently increase in value by some 20 percent after the company announced its results for 1997. Revenues increased by 81 percent over the previous year, approaching $73 million, while net income totaled more than $6.1 million. Not only did the new services contribute to the bottom line, BLP core business grew as well. The Norfolk, Virginia, teleservices facility opened in 1997. Furthermore, in late 1997, BLP began to offer sales force logistics services to pharmaceuticals.
In January 1998, the company gained a sales office in Chicago by acquiring assets from Decision Point, Inc. for $800,000. This purchase not only expanded the firm’s geographic reach but added sales and marketing talent. BLP made additional acquisitions in 1998. It acquired privately held Strategic Implications International, Inc. to bolster its continuing medical education business, paying $9 million in cash and stock. Unlike BLP, Strategic Implications was accredited by a number of medical associations. Two months later, BLP acquired Medical Education Systems, Inc. To pay for these purchases and fund further growth, the company made a secondary offering of stock, selling 2.9 million shares at $30 each.
Boron LePore fills a specific need for our clients —helping them communicate with, educate, and influence their audience and giving them the resources and expertise they need for greater impact.
Although BLP made great strides in diversifying its business, it remained highly dependent on a single customer, Glaxo Wellcome Pic, which accounted for almost $40 million of BLP’s 1997 revenues of $72.9 million. In October 1998, Glaxo announced that it would not use BLP for any further symposia or advisory panels in 1999. Although BLP management maintained that in fact the company had been lessening its dependence on Glaxo and that it would continue to do significant business with the giant pharmaceuticals, investor reaction was quick and harsh, as BLP shares lost a third of their value.
Without the impending loss of Glaxo’s business, BLP should have received an enthusiastic response from investors after it announced its 1998 results. The company more than doubled revenues over the previous year to nearly $165 million, and net income followed suit, topping $10 million. Gregory Boron then announced that he was leaving the company to “pursue personal interests.” Clearly, however, the company would not be able to keep pace in 1999, a fact confirmed when BLP reported a first quarter loss, while BLP stock, which had been trading over $43 just before the Glaxo announcement, fell to the $9 level. In April 1999, BLP hired Bear, Stearns & Company to consider strategic alternatives, including the possibility of selling the company. Following more disappointing results during the second quarter, BLP instituted cost-cutting measures, including the reduction of the workforce by 10 percent across all divisions. Although it did not close any offices, the company did give up space in both its New Jersey and Virginia operations. By the fall of 1999, the situation appeared to stabilize, and BLP announced it was no longer looking to sell the company. In fact, it began to buy back stock at its depressed value. For the year, revenues fell below $150 million, and the company posted a loss of $583,000.
In 2000, BLP began to de-emphasize contract sales service, offering it merely as a complementary service. The company opted instead to focus on its medical education business. In May 2000, it paid $2 million to acquire North Carolina-based Con-sumer2Patient, Inc., which included Physician to Physician, LLC and Alternative Media Solutions, LLC. The companies provided educational services for both physicians and patients. In June 2000, BLP paid $9 million in cash and stock to acquire Armand Scott, a New Jersey-based business with operations in New Jersey, Illinois, Tennessee, and California. Armand Scott created and implemented education programs, as well as provided other services for pharmaceutical, medical device, and biotechnology companies. Not only did the company’s business complement BLP, it added geographic reach. BLP returned to profitability in 2000, increasing its revenues beyond 1998 levels, to nearly $168 million, while posting net profits of $5.4 million. Optimism also returned to the company. Medical education spending by pharmaceuticals appeared to be growing 15 percent to 20 percent a year, and the medical education market overall now totaled $3 billion a year. More narrowly focused on medical education, and moving away from contract sales and marketing services, BLP looked well positioned to carve out a significant share of the medical education field, which was made up of a large number of small privately held companies as well as some larger companies that offered medical education only as a secondary effort. Controlling just 10 percent of the market, BLP had plenty of room for continued growth. Moreover, the price of its stock had recovered and the company had no debt. Over the next several years, BLP was likely to selectively pick up acquisitions that would expand on its base of clients, services, and geographic reach. In particular, the company was interested in establishing a presence in the potentially lucrative Midwest and California markets.
Armand Scott, Inc.; Boron LePore, Inc.; Consumer2Patient, Inc.; Medical Education Systems, Inc.; Medical Media Communications, Inc.; Strategem Plus, Inc.; Strategic Implications International, Inc.
Quintiles Transnational Corp.; Nelson Communications Inc.; IMS Health Incorporated; PDI, Inc.; Ventiv Health, Inc.
- The company is founded by Thomas S. Boron.
- Gregory Boron and Patrick LePore join company.
- LePore becomes chief executive officer.
- Company is reincorporated in Delaware; Thomas Boron retires and LePore becomes chairman.
- The company goes public.
- Gregory Boron leaves the company.
“Boron, LePore, & Associates, Inc.,” Pharmaceutical Executive, December 1998, p. 12.
“Glucophage Peer-to-Peer Meetings Increase Physician Scripts 20%,” Pink Sheet, February 2, 1998.
Goldblatt, S. Dan, “Stock to Watch: Boron, Lepore & Associates,” Business News New Jersey, September 13, 1999, p. 18.
“Patrick LePore,” Wall Street Transcript, September 14, 2001.
Shook, David, “Drug Marketer Exceeds Forecast,” Record (Bergen County, N.Y.), November 5, 1998, p. B0I.
_____, “Fair Lawn Firm’s Stock Falls 32%,” Record (Bergen County, N.Y.), October 24, 1998, p. A14.