`JP' provides cure for Glaxo SmithKline

Jean-Pierre Garnier is not the man who constructed last week's Glaxo SmithKline merger

Jean-Pierre Garnier is not the man who constructed last week's Glaxo SmithKline merger. But he is the person around whom the deal was built.

After more than two years of fraught negotiations, punctuated by lulls of tetchy silence, Glaxo Wellcome and SmithKline Beecham have finally agreed to form the world's most powerful pharmaceuticals company.

In the darkest hours, when Sir Richard Sykes, Glaxo's blunt chairman, and Jan Leschly, SB's suave chief executive, were trading shadow insults through their press departments, a deal looked remote. The only common ground seemed to be their shared regard for Mr Garnier.

But this proved sufficient, after talks resumed in earnest last November when Sir Richard thumbed a ride to Switzerland on Mr Leschly's executive jet, to lay the basis for the agreement. Mr Garnier, known throughout the industry as "JP", would be chief executive. Mr Leschly, for whom some Glaxo executives had absolutely refused to work, would retire early. And once Sir Richard, few people's idea of a fall guy, had agreed to become non-executive chairman, the deal was struck.

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So what is it about the 52-year-old Mr Garnier that made him a vital part of reaching this £110 billion sterling (€181 billion) solution?

As he took centre-stage last week to present the merger, Mr Garnier played the role of a relaxed, but steely, chief executive whose gargantuan company would send a shiver through its pipsqueak competitors.

It was a performance of bravado from a man who has never been head of a medium-sized drugs group, let alone a behemoth with sales half as big again as its nearest competitor.

"Suddenly, other companies in the top 10 appear outgunned and outmatched," boasted Mr Garnier. In the crucial US market, Glaxo SmithKline's 7,500 sales reps would fan out across the country, putting the fear of God into competitors such as Johnson & Johnson and Novartis.

In the laboratory, the combined firepower of its scientists, not to mention its £2.5 billion research budget, would create a medicine-making production line. "Putting this engine together will produce more drugs. The quality is here, the scale is here . . . We will be the kings of science."

Moreover, he said, Glaxo SmithKline had the financial wherewithal and the corporate ambition to make a further acquisition that would truly leave competitors in the dust. The setback in the share price that followed the deal was a temporary aberration.

Yet behind the scenes, Mr Garnier strikes an altogether less hard-hitting figure. A tall man, dressed in casual slacks and a polo-neck sweater, he ambles about his Philadelphia office with the demeanour of a man who has spent the morning practising his putting.

Without being bohemian, he makes a virtue of not being a grey executive in a dark suit. "I am not a typical corporate type. I consider myself an entrepreneur and a builder," he says, adding that his family life is as important as his boardroom achievements. "I don't think burning yourself out 18 hours a day is the secret to good judgment."

But his easy-going attitude is laced with ambition and a self-belief that might be mistaken for arrogance.

Born in Normandy, France, Mr Garnier spent much of his childhood moving around the country with his father, an advertising executive. In the 1960s, he became a perennial student, earning an MS in pharmaceutical science and a PhD in pharmacology from Louis Pasteur University, before getting his MBA as a Fulbright scholar at Stanford university.

He drifted into the drugs industry. In those days, he says, he had no intention of plotting anything so dull as a career.

But before long, he found himself prospering, spending 15 years rising up the ranks of ScheringPlough. For some of that time he was heading divisions in corners of Europe. A lot was spent in the US, a country whose energy and innovation captured his imagination.

In 1990, he moved from Schering, where he had become head of the US business, to the same position at SmithKline Beecham. By the mid-1990s, he was SB's chief operating officer and Mr Leschly's right-hand man.

Known for his grasp of detail, Mr Garnier has spent the past five years building SB's commercial reputation.

Competitors say he has squeezed every last cent out of products such as Augmentin, a widely prescribed antibiotic, and Paxil/Seroxat, a Prozac lookalike.

During this time, he has become a convert to SB's consumer healthcare division, which sells items such as Nicorette gum and NicoDerm patches, both aids to quit smoking. Extrapolating from changes that have swept America, Mr Garnier believes consumer skills will become core in the pharmaceuticals business.

He made much last week of his grasp of the US market, where nearly half the world's drugs are sold and 60 per cent of the industry's profits made. At his suggestion - perhaps insistence - SmithKline Glaxo's operational headquarters will be moved to New Jersey, much as SB is currently run from Philadelphia. (A dispute over whether to locate the headquarters in the US or the UK had been one of the many sticking points in the merger talks of 1998.)

"The pace of change is a little faster in the US. You want to be where the action is," says Mr Garnier, explaining why the merged company should be run from America even though most of its shareholders are in Britain. The US, he says, was the first to create a biotechnology industry, the first to witness the impact of the Internet on healthcare and the first to permit advertising of prescription drugs. "There is something of a competitive advantage in being constantly confronted by the latest trends."

Sir Richard, who has a strong British streak in spite of his occasional impatience with the British government, will stay in London. Much of the success of the company will rest on how well this transatlantic relationship works. "I think he's a superb executive and I like his personality with all the traits," says Mr Garnier, pausing for laughter. "I want a strong leader as an executive chairman. Our relationship is starting on a very sound basis."

Sir Richard went out of his way to underline that Mr Garnier would be running the show.

Few who know Sir Richard believe he will take an entirely back-seat role. But the mere fact that he has vacated the driving seat will be taken by Mr Garnier as an extremely good omen.