As if taking on a $1 billion heart device business wasn’t enough responsibility for Abbott Laboratories’ Richard Gonzalez, his boss just added another multibillion-dollar operation to oversee: the company’s lucrative pharmaceuticals group.
But Gonzalez has a track record of being up to the task.
The 52-year-old Abbott veteran has survived a battle with throat cancer, and the company says he has been successfully treated.
Gonzalez climbed the corporate ranks in a 29-year career at the North Chicago-based medical products giant. He started at Abbott in 1977 after a stint as a research biochemist at the University of Miami School of Medicine.
Last week was Gonzalez’s first as Abbott’s president and chief operating officer, the No. 2 job at Chicago’s largest public company, awarded to him after Dr. Jeffrey Leiden resigned to pursue other interests.
Leiden was Abbott’s president and chief operating officer of the pharmaceutical products group and had shared chief operating officer responsibilities with Gonzalez since December 2001. Both men reported to Miles White, Abbott’s chairman and chief executive. Gonzalez now takes on responsibility for all of Abbott’s operations, which generated about $22 billion in revenue last year.
So far, Wall Street analysts are confident Gonzalez is up to the task, given his diverse background at Abbott in various divisions, including hospital products and diagnostics.
“With Gonzalez’s impressive track record in the medical products business and experience with hospital drug sales, we believe that the pharma group is in good hands,” said Lawrence Keusch, an analyst with Goldman, Sachs & Co., in a recent report.
But Abbott insiders and other company observers say Leiden, who came to Abbott from Harvard University and was well-known in the U.S. biotechnology community, was perceived as more of an extrovert who excited Wall Street when he was first brought on board.
By comparison, Gonzalez is considered more of a holdover from Abbott’s historically insular corporate culture. Although popular among employees and management beneath him, Gonzalez is not well known off campus, and sources at Abbott say he doesn’t consider chatting about Abbott outside of the firm’s north suburban headquarters to be a high priority.
Gonzalez declined requests to be interviewed for this story. Abbott’s public affairs team said he has been immersed in meetings and focusing on his new responsibilities and the additional businesses he oversees.
Gonzalez’s operational expertise will be put to the test almost immediately with the expected closing in the next two months of a deal in which Abbott will buy Guidant Corp.’s vascular business. Abbott has some heart devices, but they bring in only a fraction of the more than $1 billion in annual sales Abbott will reap for Guidant’s stents–tiny wire mesh devices that are snaked through arteries to prop open vessels to the heart or brain in order to keep blood flowing. Abbott will also acquire devices such as catheters, guide wires and “balloons” used to unblock arteries before stents are placed.
Abbott will be getting the Guidant devices after the anticipated closing of Boston Scientific Corp.’s $27 billion purchase of heart device-maker Guidant in the next two months. As a result of a $6 billion contribution to Boston’s purchase, Abbott will acquire Guidant’s vascular device business.
Even though Gonzalez now has pharmaceutical operations as part of his kingdom, analysts say he is being watched closely on the successful integration of the Guidant operations.
In a conference call with analysts after the Guidant deal was announced, Gonzalez was confident the deal would come together and that Guidant’s people would mesh well with Abbott’s much smaller heart-device business. While Guidant was the subject of a bidding war between Boston Scientific and Johnson & Johnson, Abbott already was hiring key executives away from Guidant’s California-based vascular business.
“If you look at it from a cultural standpoint, there is a very good cultural fit between the two groups,” Gonzalez told analysts in January during Abbott’s fourth-quarter earnings call. “We have hired a number of Guidant managers that are in our Abbott vascular devices group already, and the locations are very synergistic.”
White credited Gonzalez with driving sales growth in Abbott’s medical products businesses, which range from Similac baby formula and adult nutritional Ensure drinks and bars to diagnostic tests and devices to monitor diabetes.
“He has created a portfolio of global medical products businesses that is delivering double-digit growth,” White said of Gonzalez after the announcement about Leiden’s departure. “I have great confidence that Rick will lead the organization to take advantage of the many opportunities in both areas of our businesses.”
White’s high praise of his clear-cut No. 2 does not mean Gonzalez will ascend to the throne one day, however.
Company insiders and Wall Street analysts who follow Abbott closely say Gonzalez is not expected to be the heir apparent to White. Abbott would not comment about the company’s succession plan.
Goldman’s Keusch, however, said, “The elevation of Mr. Gonzalez is not a succession planning move, suggesting that Mr. White remains committed to the CEO role.”
– – –
Richard Gonzalez
President and chief operating officer, Abbott Laboratories
Education: Bachelor’s degree in biochemistry from the University of Houston and a master’s degree in biochemistry from the University of Miami.
Age: 52
Home: north suburban Chicago
June 1, 1977–Joined company
1992–Named divisional vice president and general manager of Abbott’s diagnostic operations in the United States and Canada
1995–Elected vice president, Abbott health systems division
February 1998–Elected senior vice president, hospital products division
December 2001–Became president and chief operating officer, medical products group
— Bruce Japsen
———-
bjapsen@tribune.com
