Quest Pharmaceutical Services (QPS) of Newark, Delaware, is a small company with big ambitions. Founded in 1995 by Benjamin Chien, a former research scientist at DuPont Merck, QPS is a contract research organization, or CRO, that supports the drug discovery and development efforts of clients ranging from small biotech firms to large pharmaceutical companies such as Pfizer and GlaxoSmithKline. QPS is now one of the fastest growing CROs in the industry with a 47 percent compounded annual growth rate in revenues since the year 2000. And the business is expanding to include research labs in Taiwan and the San Francisco Bay area, as well as satellite sales offices in several key cities across the United States.

Dr. Benjamin Chien, President and CEO of QPS

Chien is a soft-spoken, low-key CEO who doesn’t mind sharing some of the things he’s learned about getting a new biotech enterprise off the ground. His initial piece of advice is to look carefully at the needs of the business or scientific community. “It’s very important to identify needs first,” he says. “It’s difficult to sell a product or service to a market that doesn’t recognize the need.”

So why are contract research services needed in the pharmaceutical industry? Don’t the drug companies conduct their own research? Chien describes the drug development process as a pipeline from discovery to testing and marketing that typically takes a new drug 10 years to traverse (and an investment of up to a billion dollars). Large drug companies do maintain enough research staff to serve a certain number of drugs in the pipeline. However, sometimes the pipeline becomes crowded, and the corporation turns to an outside agency to ease the backlog and keep drugs flowing through the pipeline. Or, in the case of smaller biotech firms, the client simply may not have the equipment or expertise to conduct all the needed tests on a new product. That’s where a firm like QPS comes in.

At the outset, QPS offered bioanalysis services using liquid chromatography/mass spectrometry (LC/MS). This service essentially analyzes the concentration of drug molecules in the human body. In 2002, QPS expanded its menu of services to include three new areas: (1) adsorption, distribution, metabolism, and excretion studies, or ADME, which look at how a drug is absorbed by cells or bound to proteins, used in various chemical reactions in the body, broken down, and excreted, and what changes result; (2) whole body autoradiography, which involves tagging a drug with a radioactive marker and tracing its path through the body over time; and (3) biomarker identification. Biomarkers indicate the status of a disease and are used to assess the effectiveness of treatments. For example, cholesterol level is a biomarker and a way of gauging a patient’s risk and treatment for heart disease.

QPS expanded its range of services again in 2005 with the addition of molecular biology capabilities. This final area allows QPS to assess the effectiveness of drugs on various genotypes, that is, genetic differences in people that may result in a drug being metabolized differently.

One of the key pieces of equipment in most QPS research projects is the liquid chromatography/mass spectrometer (LC/MS), an instrument that analyzes the chemical components of a compound or substance. As a Ph.D. student at the University of Michigan at Ann Arbor, Chien worked on a novel type of mass spectrometer. He bypassed the opportunity to continue developing his invention after graduation in favor of a job in the mass spectrometry group at DuPont Merck. In 1996, he received the Summit Award, the highest level of achievement at DuPont Merck, for his contributions to the development of Efavirenz, an antiviral drug approved for the treatment of HIV, the virus that causes AIDS. Chien says the combination of experience with hardware he gained in graduate school and the drug development process he learned at DuPont Merck served him well in initiating his own company.

Initial financing for QPS — a total of $280,000 — came from Chien’s father-in-law, another relative, and a couple of college friends. That was the last time Chien had to borrow money, however; the business has been funded through profits ever since. He consulted the Delaware Small Business Development Center for assistance and referrals to lawyers and accountants who could help him navigate the paperwork needed to establish QPS as a limited liability company, or LLC (a company in which only individual partners are taxed, as opposed to a C-corporation in which company earnings are taxed). And in 1995 QPS opened its doors in the Delaware Technology Park in Newark with three employees (including Chien) working in two laboratories and three offices totaling 1,100 square feet. At that time, Chien says, QPS owned one LC/MS. Today, the company keeps 39 of them busy.

Chien emphasizes that it’s best to keep things on a small scale at first. “You want to have an audacious goal in the long term, but start small,” he cautions. He says that for the first three years of his company’s existence, he worked 16 hours a day including weekends with no vacation: “I did everything from washing glassware and sweeping floors to recruiting clients.”

One of the most crucial and difficult aspects of running QPS in the early years, according to Chien, was finding the right people to join the company. As the company has grown, he has instituted incentive programs to encourage good employees to stay with the company. “If you identify good people to work with,” Chien says, “you can spend your energy growing the company rather than dealing with people issues. For any start-up, it’s important for the employees to feel they are a part of it. It helps to be generous with them and show them a path to grow.”

To this end, many employees receive a share in QPS when they are hired. And each year the company sets a financial goal. If the goal is reached, the employees receive more shares. Over the years, both the number and value of the shares increase until the employee is fully vested in the program. According to Chien, this program has minimized employee turnover and fostered a sense of teamwork toward a common goal.

Chien says the qualities he values most in his employees are integrity and a passion for learning. While these qualities can be found in people at various levels of education, Chien frequently finds what he’s looking for among candidates with doctoral degrees. To him, the type of Ph.D. program is not as important; he’s hired many different types of chemists and engineers and trained them in a new area. However, people with doctoral degrees often demonstrate a high level of perseverance and commitment to understanding and solving problems. Approximately 25 percent of QPS’s 160 employees have doctorates. This high level of expertise, dedication, and passion for learning, coupled with QPS’s central location in one of the primary pharmaceutical and biotech corridors in the county, are among the keys to the company’s success, according to Chien.

As far as his own role in the company is concerned, Chien found that by the end of the first five years he was becoming less involved in the technical aspects of the work and more oriented toward the business aspects. “I noticed that my nighttime reading was getting to be less scientific journals and more business publications,” he says. He enrolled in short-term workshops in business administration and management, which he credits with driving home the idea that the role of the company is to create value for its customers.

One way QPS adds value is to focus on efficiency and process improvement, which allows it to offer customers a quick turnaround time. This is important to pharmaceutical and biotech companies who are trying to speed treatments to those who need them (and ahead of the competition) and trim the costs of developing new therapies. And the QPS strategy seems to be working. “In the last five years there’s been 10 to 15 percent growth in the CRO market overall,” say Chien. “In that period, our growth has been 47 percent. We are acquiring 30 to 40 new clients every year.” He notes that there are now upwards of 2,000 biotech companies in the United States, and the pool is growing rapidly. QPS currently serves about 180 clients; about 20 percent of its business is from the so-called “big pharma” companies, the rest from small biotech firms.

“Service is our bread and butter,” says Chien, “ but a lot of our employees come from a pharmaceutical background and have a passion for discovering new things. So each year we invest a percentage of our earnings in research and development.” In keeping with Chien’s philosophy of responding to needs, researchers at QPS are working to develop a novel drug delivery system for small peptides (compounds made up of two or more amino acids linked together) such as insulin, which must be injected frequently. “We hope that this platform will make life easier for people who have to take daily injections or help people with Alzheimer’s or other diseases where compliance with a daily regimen is a problem,” Chien says.

	Employees of QPS

Another need QPS is addressing is the need to keep drug development costs down. “In this case, global outsourcing becomes an important part of a business plan,” Chien says. “Our facility in Taiwan can provide a lower-cost option for certain clients.” Chien is currently spending a lot of time on the West Coast preparing for the opening of a new QPS research facility there this year. And long-term goals for the company include a future facility in the United Kingdom as well. Chien also hopes to begin offering clinical trial services — one of the last stages in drug development in which the drug is tested in human subjects — in Delaware in 2007.

Chien emphasizes the importance of perseverance in getting any new venture off the ground. “There are always difficulties,” he says, “but you can’t give up. Sometimes new clients would test us at first and give us their most difficult problems, but our team would keep working on it and not give up until they were able to solve it. We apply this to all aspects of the business. Set ambitious goals and don’t give up until you reach them — my philosophy is people don’t grow when they feel too comfortable.”

Chien also adds that he finds a deeper satisfaction in his work that he shares with many of his colleagues. “It’s a good feeling when you help move a drug onto the market quicker and it helps save lives,” he says. “If you focus on doing the right thing, something significant that has meaning, you will do well. If you’re too focused on profit alone, you end up losing.”