From the file
Company: Chemir Analytical Services
Position: Chairman, chief executive officer
Education: Master's degree in business administration from Fontbonne University in St. Louis; doctorate in chemistry from the University of Akron.
ST. LOUIS — Six years ago, Shri Thanedar's Chemir Analytical Services was a $7 million company with steady revenue, an impressive list of clients and a firm foothold in the specialty-testing industry, but for the ambitious Thandedar that was not enough. He aggressively pursued more and more pharmaceutical industry work and sky-rocketed the business on a path that has resulted in a current $60 million-a-year pace.
The St. Louis-based Chemir, bought by Thanedar in 1990, charged through the '90s on the back of its work as a non-routine chemistry lab providing testing services. Chemir scored with customers by figuring things out that others could not. Some examples of Chemir's testing, at that time, include: determining why pharmaceutical pills were changing color from green to yellow on the shelf, testing why silicon wafers were picking up microscopic contaminants and analyzing how computer parts were corroding, working with McDonald's to figure out why, when kids open toys in Happy Meals, there was a chemical smell from the plastic bag and determine why auto paint went bad after applied to a car.
Such work brought Chemir customers such as Anheuser-Busch Co., Dow Chemical Co., General Electric Co., Owens-Corning, Pfizer Inc., Pratt & Whitney, Schering-Plough Corp., the U.S. Army and Zenith Electronics Corp. and drove the company up to 55 employees.
However, in this testing work Thanedar started to see the potential in the pharmaceutical market and claimed that more and more pharmaceutical companies were inquiring about testing services that could help in the drug development process. "I saw that as a need to specialize," he said. "I said, 'We need to go into this area. We need to target the pharmaceutical industry.'"
In 2003, Chemir was bringing in $1.5 million revenue from pharmaceutical work already so it was just a matter increasing the focus. However, not being a pharmaceutical scientist, Thanedar hired some executives with industry experience to head up the charge. This brought about the decision to change services from just testing and problem solving to drug development with a focus on early-stage drug development. The aim was to help pharmaceutical companies sort through all the molecular compounds on the path to drug development quicker, a service that Thanedar knew would be highly valued.
"Everybody wants to bring out a blockbuster drug," the 54-year-old Thanedar said. "The problem is you have to turn over a lot of stones to really find that gem.
"There are tons of molecules [for a successful drug] you have to find the right one," he added. "Early drug development is eliminating those choices."
According to Thanedar, Chemir's chief executive officer, the company can provide "the whole nine yards of drug development services." Such services were not initially outsourced by pharmaceutical companies, but Thanedar said that is changing.
"In recent years, what they are realizing is this is a very competitive process. Everybody is trying to get the drug out first and the company that gets out there first gets a big chunk of the market," he said. "Now, what they realize is small, specialty businesses, like us, can help them get out there quicker."
Pharma giants such as Pfizer, Merck & Co. Inc. and Johnson & Johnson have all become believers and have jumped on board for Chemir's services.
Chemir has also found success helping startup companies that have a drug idea and venture capital funding, but do not have the infrastructure for early-stage drug development.
A main strategy Thanedar used for pharmaceutical growth has been to acquire smaller companies with services Chemir wished to fold under its drug wing.
This approach kicked off very quickly with Chemir's new pharmaceutical emphasis in 2003 and the company bought two other businesses: Pennsylvania-based Lycoming Analytical Services and the Florida-based Guidelines Integrated Services. In 2004, Chemir bought Gateway Chemical Technology Inc. in St. Louis. This was followed, after a two-year pause in deals, by the acquisition of New Jersey's Barton Labs in 2007 and the purchase of Colorado-based Analytical Development Corp. and Florida's AvivoClin Inc. in 2008.
According to Thanedar, all the acquisitions helped to give Chemir all the services pharmaceutical companies want. "Each had specific parts of drug development, we didn't just buy random companies," he said. "We looked at what was needed in early stage drug development and we went and bought these companies."
In some cases, Chemir had to grow organically to address parts of early-stage drug development, such as formulations which is the task of combining active ingredients with inactive ingredients in drugs. For example, 12-hour cold medicines are developed through the formulations process to figure out how to slowly release medicine over a long period of time.
"This is a big science and also, to some extent, an art," said Thanedar. "We could not find a company that does formulations, so we decided to do that in house."
From $1.5 million in revenue in 2003, pharmaceutical business now brings in $53 million to Chemir. According to Thanedar, $10 million of that revenue is from acquisitions. Specialty testing stills brings in the same $7 million annually it did in 2003. To accommodate all the different businesses and services, the whole organization has been restructured. Now, the original Chemir Analytical Services is under parent company Chemir Inc., which also houses Azopharma Product Development Group and CAS-MI Laboratories. Chemir Analytical Services focuses on specialty testing, CAS-MI does testing for the paint, coating, adhesive and polymer industries and Azopharma houses the pharmaceutical business. All told Chemir has 350 employees.
With the specialty testing business holding steady over the year, the pharmaceutical business has risen dramatically since 2003, hitting double digits at $13 million in 2005, followed by $24 million in 2006 and then $33 million in 2007.
According to Thanedar, the quest for a bigger challenge and ambition is what drove him to expand Chemir. "The appetite was there in 2003 to be a larger company," Thanedar said. "Chemir was steady, but it was not in a growing market.
"Even though we had succeeded and grown, I didn't see a huge future growth," he added. "I wanted to be a company in excess of $50 million • Pharmaceuticals had this potential."
Never one to rest on his laurels, Thanedar continues to see more growth for Chemir, particularly in the pharmaceutical area of cytotoxic testing, which uses compounds that are toxic to cells, as well as possibly venturing into niche drug manufacturing.
A research chemist, Thanedar said he found Chemir during a job search in 1990. At that time, Thanedar was working for the St. Louis-based Petrolite. He had been at the company for six years and was looking to make a switch from a larger company to a smaller one. However, Chemir's owner did not want to hire, in fact, he was looking to sell. Thanedar was not exactly looking to buy, but he called the opportunity to good to pass up and scrambled to get enough in loans to buy the company.
When he took over the two-person Chemir in 1990 the company was generating about $150,000 a year. In four years he brought Chemir to the $1 million mark and hit $7 million in 2003.
Originally from Belgaum, India, Thanedar arrived in the United States in 1979. He has a doctorate in chemistry from the University of Akron in Ohio. He also has a master's in business administration from Fontbonne University in St. Louis.