Theragenics Corporation CEO Christine Jacobs: Riding High
March 8 2010 by Jennifer Pellet
Christine Jacobs once resuscitated a 39-year-old heart attack victim in a parking lot. That life saving maneuver took place back in the days of her first career, when the medical technology grad was still poring over blood samples at a hospital trauma lab. But Jacobs, now CEO of Theragenics Corporation, has since gone on to evince similar fortitude in coping with life-and-death scenarios in the corporate world. When she joined Theragenics in the late ’80s, the Buford, Georgia based company – then known as Nuclear Medicine – was on its deathbed. A startup medical technology company, it had just one FDA approved product, a radioactive seed treatment for prostate cancer, but no clinical data to support it, no way to manufacture it and, perhaps most importantly, no customers to buy it.
Christine Jacobs once resuscitated a 39-year-old heart attack victim in a parking lot. That life saving maneuver took place back in the days of her first career, when the medical technology grad was still poring over blood samples at a hospital trauma lab. But Jacobs, now CEO of Theragenics Corporation, has since gone on to evince similar fortitude in coping with life-and-death scenarios in the corporate world.
When she joined Theragenics in the late ’80s, the Buford, Georgia based company – then known as Nuclear Medicine – was on its deathbed. A startup medical technology company, it had just one FDA approved product, a radioactive seed treatment for prostate cancer, but no clinical data to support it, no way to manufacture it and, perhaps most importantly, no customers to buy it.
“They told me that they were going bankrupt and to plan for no more than a six-month stay,” she recounts. Undeterred, Jacobs, who lived in Ohio at the time, did just that. She threw four suits in her trunk and drove down to Georgia.
Jacobs set to work helping to revive the company by finding doctors and patients willing to try its version of brachytherapy treatment, which involves rice-seed size implants that release enough radiation to kill cancerous cells with minimal damage to surrounding tissue. Manufacturers able to make and distribute a product with a 17-day half life were also lined up.
By 1991, Theragenics was profitable and ready to move into the next growth phase: vertical integration. But Jacobs was fried. “I was bone-marrow tired,” she says. “I’d been outrunning the Grim Reaper on behalf of the company for so long. With a startup it’s constantly, ‘Am I going to be able to make payroll? Will we be able to manufacture enough material? Are we really curing cancer?’” Repeatedly approached by the CEO to take over as president, she turned him down twice. Then he delivered the kicker:
“He said, ‘I’m leaving and if this company is going to make it through the next step, building a factory and labs, it’s got to be you,’” she says. “At the end of the day, I’m a sucker for a cause. We had such potential in terms of curing men of prostate cancer that I just told myself, ‘If you’re tired, get over it.’ And I never looked back.”
In her first year as president, Jacobs shepherded the company through building its first factory – no easy feat with $2 million in the bank and a $5 million piece of equipment to buy. “Banks just don’t want to step up when you’re small and making radioactive things,” she explains. Since then, Theragenics has installed 14 cyclotrons, most paid for with cash, and has treated more than 150,000 men – including Rudy Giuliani – for prostate cancer. The manufacturing play made the company, which was suffering the slim margins inherent in domestic outsourcing, far more viable.
“The margins were killing us,” says Jacobs. “In a business where you lose 4 percent of your inventory to Mother Nature every day, you have to manufacture if you’re going to survive.”
Named CEO in 1993, Jacobs has the distinction of being the longest serving woman CEO of a New York Stock Exchange-listed company. But while the ride has been long, it hasn’t always been smooth. Through 2005, Theragenics remained a one-product company, and reimbursement programs and medical innovations were threatening the treatment at the heart of the business. “Our concern was that new technological advances like robotics, that have more attractive payment schemes from Medicare, would dampen demand,” explains Jacobs.
“For some of those treatments a physician gets paid $60,000 whereas our seeding could cost $25,000. Even though we had great data and cure rates, physicians might want to follow the more lucrative company.”
The realization sparked a growth through- acquisition phase. Over the past five years, Jacobs has been busy using a series of acquisitions to broaden and diversify the company’s business. Theragenics has since gone from having a single product to having more than 3,500 – a somewhat dizzying rate of expansion.
But there’s a method to Jacob’s mad buying spree. The ragenic’s recent acquisitions all center around surgical products, manufacturing and distributing wound closure products (sutures, needles, etc.), vascular access (introducers, valved sheaths, guidewires), and specialty needle products (coaxial, biopsy, spinal and disposable veress needles, access trocars). If the idea was diversification, Jacobs has already delivered. The surgical side of the business brought in about 67 percent of the company’s total revenue in 2009, estimated at just under $80million.
But Jacobs, who buys, sells and trades bucking bulls that tour in rodeo shows during her spare time, has her eyes on a bigger prize. “If you look at [these surgical products] from a scale of level-of-sophistication perspective, these devices fall in the middle,” Jacobs explains. “I’m amassing a group of assets that can be made in the U.S. by our specialized labor force with the same degree of accountability we have with the radioactive devices. If you’re Medtronic or J&J and you need a component made, I want to be the go-to person in the U.S. with manufacturing capability you can count on.”
In her view, the move will also dovetail well with a post-healthcare reform medical industry. “The world is going to get a lot more difficult for large players in the medical device sector, from a compliance point of view and a reimbursement point of view,” she predicts. “They’re going to need margins. They’re going to need help. I want to be that help. I want them to call me and say, ‘Chris, I need 100,000 parts and I need them to be perfect. I don’t want to show up in The Wall Street Journal having to recall.’ That’s the opportunity for a company like us.”