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Business Profile: Magellan Laboratories

One of the best ways to build a business is to learn from the success of others. This is a profile of the development and success of Magellan Laboratories. Prior to beginning the company, co-founder, Dr. Lowry Caudill, prepared himself by obtaining undergraduate and graduate degrees in chemistry and handling several administrative roles at Baxter and Glaxo. In particular, the management of the formulation development group at Baxter was turned down by six other people. This showed vision on Dr. Caudill’s part to see an opportunity where no one else did. Within these companies, there were ways to improve the production of pharmaceutical drugs and save money in the time it took to produce these drugs. As a small company at first, Magellan had the ability to maneuver into the market while maintaining flexibility in the development of their drugs. Nevertheless, the specific process of discovering a drug and putting it on the market did require an extensive amount of work. The collection of data had to be precise, and Magellan had to work within the regulations of the FDA. This included following a regulated industry with cGMPs, cGLPs, and cGCPs. The pivotal point for Magellan’s success was its recognition of the need for experienced scientists and the recruitment of these scientists to further the goals and strategy of the company. One of the most profound turning points was the creation of the business plan. The process almost worked backward because Dr. Caudill and Dr. Alfred Childers recognized the opportunity and then the plan evolved as people were put in place and goals were solidified. The venture did require vision, but the confidence that their experience would guide them through combined with the a backup plan to reenter the pharmaceutical industry allowed them to focus more on the company than if they were completely dependent on Magellan’s success alone. The ideology that salary and compensation was not the prime initiative showed their passion for the company and the enjoyment and satisfaction Dr. Caudill and Dr. Childers received from building something that had a great impact. Even after taking out a loan to get started, the bank wanted to assure that the owners lived comfortably instead of scrapping by with barely enough money. Eventually, Magellan’s would obtain a consistent growth in revenues of 15% annually. This rate of growth is very rare, but obtainable to any company with potential. Cardinal Health saw the potential in Magellan Laboratories. Cardinal Health eventually made an offer to buy the company. Cardinal Health, Inc. ( is a leading provider of products and services supporting the health care industry. The company, which is headquartered in Dublin, Ohio, employs more than 49,000 people on five continents and produces annual revenues of more than $40 billion. Cardinal Health's Pharmaceutical Technologies and Services group has operations worldwide, employing more than 8,900 people at 31 drug development, manufacturing and packaging centers in 11 countries. The reason for Magellan’s success was the ability to have a high quality team with great leadership. The company worked as a whole to provide consistent services to their clients.