Kevin Hrusovsky — Bucking the Trend By Kim Ribbink From the playing fields to football fandom to building teams to the corporate boardroom, Kevin Hrusovsky carries an infectious enthusiasm for everything he does. And it’s that energy that is helping to drive innovation at Caliper Life Sciences. “Innovation is not just about technology; it’s also about how we relate to our customers and how we communicate with employees,” he says. “Innovation is about keeping everyone aligned and balanced and excited and motivated so they aspire to achieve more than they thought they could.” Mr. Hrusovsky, president and CEO of Caliper Life Sciences, strives to engender that same enthusiasm in his senior management and staff. To do so, he draws on his beloved Buckeyes, the team of his alma mater, Ohio State University, handing out buckeyes — chestnut-shaped seeds — to his staff and customers in a gesture of good hope and good fun. His actions have helped uplift the mood of the staff at Caliper and generated excitement within the workplace. “Kevin is great for an innovative company because he thinks on his feet, and he is very communicative,” says Michele Boudreau, director of corporate communications at Caliper. “He drives hard, he drives fast, and if there’s something to be latched onto, an opportunity that comes up, he revs his team up for the challenge.” Caliper provides microfluidic, liquid handling, and integrated laboratory automation solutions to the worldwide life-sciences industry. Caliper uses a technology called LabChip, which is a registered trademark of the company, to create leading-edge tools that accelerate drug discovery, enable diagnosis of disease, and assist scientific research. Mr. Hrusovsky’s go-getter attitude is paying dividends for the company. For the first quarter of 2005, the company reported increased revenue — $18.4 million, up 9% from $16.9 million in the same period last year — and a loss of $4.9 million, a 51% improvement over the $10 million loss reported in the year-earlier quarter. “Assuming current economic conditions persist throughout the year, we anticipate growing our revenue between 5% and 12% for the full year, which translates into $84 million to $90 million in total revenue for 2005,” Mr. Hrusovsky recently told investors. From the Valley to the Mountain Mr. Hrusovsky grew up in a coal mining and steel mill town in the Ohio valley at a time of high unemployment because of the closure of mines and steel mills. “I had a cousin who was 15 years older than me who had a mechanical engineering degree and convinced me that I needed to do the same,” he says. “I had no idea what mechanical engineering was, but his view was it was something that would get me out of the valley, provide me with a sound education, and teach me how things work.” Eager to get thorough, hands-on management experience and insight, Mr. Hrusovsky joined DuPont after graduating from Ohio State University. The attraction, he says, was the company’s two-year rotation of assignments, which he believed would provide him with a good understanding of business operations. “I ended up with a new job every six months, which gave me the opportunity to get grassroots experience in a variety of functions — from R&D, to production, to sales and management,” he says. His first big break came when a second-level supervisor sadly developed cancer and recommended Mr. Hrusovsky for his job. “I was 22, just six months out of Ohio State,” he says. “I was in R&D at the time, but I got to know a lot of the operators and was particularly interested in the production side of the operation, so it was a great opportunity.” It became apparent to Mr. Hrusovsky that his degree and early working experience provided a good springboard into management and business, but he was eager to further hone those skills. So a few years into his career at DuPont, he began a MBA at Ohio State University and later did a MBA extension at Harvard. “I always had a love for business and knew early on that I was going to get a MBA,” he says. “Business fascinated me, and I wanted to have a deeper understanding of how Wall Street worked, how finance worked, and how overall business functioned.” Looking to expand his business acumen, as well as to move into the life-sciences arena, Mr. Hrusovsky joined FMC Corp. Initially his role was to consolidate the diversified chemical company’s sales and marketing functions. “What attracted me to FMC was its sharkish approach to strategy,” he says. “The company had adopted Michael Porter’s competitive strategies and was focused on autonomy and on pure business. So I had a chance to really run a business and to learn and develop strategies. I walked away with a much more complete understanding of what creates shareholder value.” When an opportunity to run a small company presented itself, Mr. Hrusovsky was ready for the challenge, and in October 1996, he joined Zymark Corp. as president and CEO. Two Into one According to Mr. Hrusovsky, leadership is about far more than numbers on an earnings report, and the best leaders learn their skills from all aspects of their careers and lives. “The most important aspect of leadership is how well you know yourself and how you behave in the workplace,” he says. “It’s about earning credibility through hard work and developing trust with the employees and the customers based on your real deliverables. Those values are really critical; for me it is a Midwestern work ethic and an understanding that people don’t care how much you know until they know how much you care. This whole aspect of leadership is critical, not only for small companies, but large companies. Once those values are in place, the next step is to have a strategic understanding of how to use the science of strategy to be truly competitive.” According to Mr. Hrusovsky, DuPont was fertile ground for developing across-the-board experiences and gaining management credibility through those experiences. “When I left DuPont, I understood the concept of motivating greatness in people — something DuPont was really focused on — truly understanding the power of innovation, and how to drive future growth through relationships with customers and the market,” he says. But no matter how innovative a company is, profitability is paramount, and for Zymark, Mr. Hrusovsky’s skills in that area were a key attraction. “I’ve always managed innovation and found a way to move innovation into profitability — at both DuPont with Teflon and FMC with the pharmaceutical business,” he says. “Zymark had a very innovative approach to using robots to invent new drugs, but it was such a way-out concept that the company needed practical management approaches to pull it off. Also, the company had been struggling a bit with growth, and I think they saw me as a way to motivate and to excite both customers and employees.” Over the years, Zymark made some key acquisitions, including Scitec Corp. in 1999 and Labotec in 2002. But everything changed in July 2003, when Caliper Technologies Corp. bought Zymark in a cash and stock deal valued at around $70 million. The acquisition brought together a company that had strong commercial relationships with pharma and biotech — Zymark — with a company that was deeply innovative with next-generation technology — Caliper Technologies. “This was a marriage of two radically different cultures: one focused on the customer and the other focused on inventing new things,” Mr. Hrusovsky says. “Bringing the two together seemed pretty logical given that both companies want to invent things that customers ultimately want to use. Bridging the cultures of innovation with commercialization was the first key objective.” The next step was to make the combined company financially stable. “We were burning about $35 million to $40 million a year when we combined the two companies,” he says. “So we needed to get the spending under control quickly to regain credibility and respect from the investment world, which had lost some of its excitement for Caliper. We stated at the time of the merger that the company would be cash flow positive by the fourth quarter of 2005, a milestone that we still expect to achieve.” One of the hardest aspects of the merger was the realization that some people would have to be laid off, Ms. Boudreau says. “It’s the job Kevin hates the most — letting people go; but he gets in there and sits down with individuals, and lets them know this is hard for everyone,” she says. “He’s honest, straightforward, and cares about people; he really gives himself to the employees.” Balance in All Things For Mr. Hrusovsky, finding the right balance in everything is key. Whether it be operating a business, managing staff, or enjoying family life, success and happiness come with knowing how to weigh decisions and delineate priorities. “Experience has taught me that there needs to be a matrix of balance between the people and the business,” Mr. Hrusovsky says. “It’s important to keep staff highly motivated, to be mindful of the customers we serve, and at the same time ensure we deliver great returns to shareholders through strategy.” Part of that balance is ensuring people’s personal lives are a priority. For example, he says one of the attractions to Zymark was the opportunity to balance work life with family life. “I went from a $40 billion company at DuPont, to a $4 billion company at FMC, then to a $25 million to $30 million company at Zymark,” he says. “I believed that a smaller company would offer more balance, and I wanted to ensure that I spent time at home. I have two children, I’m a coach, and I’m very focused on the personal side of living.” Mr. Hrusovsky is equally concerned that his staff balance their lives, too. “There are times in any business cycle where people put in long hours, and Kevin is great about thanking people for their efforts and reminding them that it’s important to maintain a balance,” Ms. Boudreau says. “He wants people to know that an important part of our company is keeping their lives stable. It’s not only good for the employees, but it’s good for the company because if people have happy lives, they’re more productive.” Most importantly, his holistic, hands-on approach helped the staff of Zymark and Caliper Technologies overcome their natural suspicions and concerns when the two companies merged to form Caliper Life Sciences. Ms. Boudreau says the Buckeye theme played an important role in how Mr. Hrusovsky went about bringing people together. “Kevin unabashedly puts himself out there; during meetings he gets dressed up in Ohio State team colors, he passes out buckeyes, and this has an amazing effect on the people in the room because no one is putting himself on the line more than he is,” she says. “This approach was a huge icebreaker during integration because the West Coast employees had a very different mentality and culture from the folks out in Hopkinton, so there was quite a bit of adjustment to work through.” “When I think back to that integration period, I think wow, we’ve come a long way,” Mr. Hrusovsky says. “The Buckeye really is symbolic of our ability to trust and to create our own luck by coming together and putting aside our differences, skepticism, and any negativity that naturally comes in situations like the one we just went through as a company.” Today Caliper is recognized as an innovation leader in the life sciences. MIT and the Cambridge Health Institute have ranked Caliper’s patent estate — and the impact that estate can have on the industry — No. 2 in the world, two years in a row. (Pfizer has the No. 1 ranking.) Mr. Hrusovsky says the company will achieve its mid-term goal of being cash flow positive, and its longer-term goal of rapidly expanding its bottom line, by generating increased interest in its technologies and products, such as the LabChip. (For more information, see box on page 52.) “Our goal is to be the chip inside in the laboratory, similar to the way Intel did it for the computer,” Mr. Hrusovsky says. The company is looking to new and continued partnerships to fund R&D investments. Since taking the helm, Mr. Hrusovsky has helped attract top-level customers. “Companies such as Pfizer, Merck, Johnson & Johnson, sanofi-aventis, Bristol-Myers Squibb, Novartis, Amgen, and Serono have all acquired the new LabChip technologies and many of them have hired us to provide assay development services for them, and we think that helps our product sales by making our systems more usable once the assays are developed,” he says. In addition, Caliper Life Sciences has important partners that license its technology, which provides the company with further funding. “Affymetrix, BioRad, and Agilent have licensed our technology, and we’re continuing to work on licensing deals with other companies,” he says. Mr. Hrusovsky attributes the company’s achievements to date to its talented, motivated team and the steps that have been taken to drive the company’s innovative technologies. “We’ve had success at driving innovation into products that are profitable, then growing through acquisitions and mergers, exciting the customer base, and continuing to build strong relationships,” Mr. Hrusovsky says. His belief in the team is overriding, and his No. 1 priority is the people who make innovation possible. “I’ve been very fortunate throughout my career to have had the opportunity to form good relationships with a lot of people, which has allowed me to get many talented, motivated individuals on the team,” he says. “Without good people and customers you can’t succeed.” PharmaVOICE welcomes comments about this article. E-mail us at [email protected]. A leader in the life sciences, a family man, sports fan, and coach, Kevin Hrusovsky fully appreciates that life should be multifaceted. And he approaches all aspects of his life with dedication and passion. September 2005 PharmaVOICE A Team Approach In an exclusive interview with PharmaVOICE, Kevin Hrusovsky, president and CEO of Caliper Life Sciences, discusses the excitement of working in the life-sciences space, the role of mentors, how he engenders enthusiasm in his staff, and how he maintains a healthy balance between career and family. What in particular excites you about leading a life-sciences company? Many people who work at Caliper have dealt with trauma at some point in their lives — be that losing someone close to them or having relatives who were inflicted with a terrible disease. What inspires all of us is that we are developing tools that empower companies to make new drugs and diagnostics more efficiently. We know of certain compounds that have been discovered because of our robots or through our LabChip technologies. Witnessing the impact these products will have on society transcends the excitement of invention. How significant have mentors been on your career, and in what ways have they helped you? Throughout my career I have looked to mentors to guide me, help me realize when I’m doing something stupid, and encourage me to learn from those mistakes. I’ve always understood the importance of learning from people who are more experienced. I’ve been very fortunate to have mentors from DuPont, from FMC, from many of Caliper’s customers — people at J&J and Pfizer — who have helped me immensely over the years. Family has also played an important role, such as my cousin who encouraged me to get a degree in engineering, my parents, and my wife’s unwavering support. All these people have given me the confidence to do something big. How would you describe your leadership style? I think that it’s really about credibility and trying to live up to everything you expect others to live up to. It begins with a strong work ethic and integrity; if I personally demonstrate the leadership qualities that I’m espousing are necessary, I think it makes it so much more credible for everyone else to live up to those same values. I’ve found it equally important to have a very strong management team that can push me further than I can push myself, as well as employees who have a positive outlook. These are people who have a strong mindset for winning. Above all, it’s important to be open and honest. All of us have flaws but we must be willing to let people know what our flaws are. Being open when we make mistakes allows us to perform together so much better. We’re on a mission to do something very noble for the world, and we have to really be excited about, and have a grand vision of, what we do. What is the most important aspect to a healthy, happy career? I would say making sure that I keep family first. That’s probably my No. 1 professional challenge. Lance Armstrong said it best. Here’s a guy who has achieved greatness; and he’s saying it’s been at the expense of his family, and he needs to reverse that. All along, I’ve had mentors who really were strong family people, and that’s helped me keep everything in perspective. A High-Caliber Career Kevin Hrusovsky — Resume July 2003 — Present. President, CEO, Director, Caliper Life Sciences Inc., Boston October 1996 — July 2003. President and CEO, Zymark Corp., Hopkinton, Mass. February 1996 — October 1996. International Director, Agricultural Products Group, FMC Corp., Philadelphia July 1993 — February 1996. Division Manager, Pharmaceutical, FMC Corp., Philadelphia July 1992 — June 1993. Global Sales and Marketing Director, Pharmaceutical, FMC Corp., Philadelphia January 1992 — July 1992. North American Sales and Marketing Manager, Teflon Fluoropolymers, E. I. DuPont De Nemours & Co., Wilmington, Del. October 1990 — January 1992. Global Business Manager, Viton Fluoroelastomers, E. I. DuPont De Nemours & Co., Wilmington, Del. June 1989 — October 1990. Product Manager, Viton Fluoroelastomers, E. I. DuPont De Nemours & Co., Wilmington, Del. May 1988 — June 1989. Product Line Manager, Viton Fluoroelastomers, E. I. DuPont De Nemours & Co., Wilmington, Del. January 1987 — April 1988. Area Superintendent Production, Engineering Plastics, E. I. DuPont De Nemours & Co., Washington Works, W. Va. October 1986 — January 1987. Quality and Customer Service Manager, Zytel Nylon, E. I. DuPont De Nemours & Co., Wilmington, Del. July 1985 — September 1986. Global Recovery Coordinator, Nylon, E. I. DuPont De Nemours & Co., Wilmington, Del. January 1985 — July 1985. Production Supervisor, Hydrogen Peroxide, E. I. DuPont De Nemours & Co., Memphis, Tenn. August 1984 — January 1985. Production Supervisor, Solid Peroxygens, E. I. DuPont De Nemours & Co., Wilmington, Del. June 1983 — July 1984. Research and Development Engineer, Solid Peroxygens, E. I. DuPont De Nemours & Co., Wilmington, Del. Education 2001. Honorary Doctorate of Laws, Framingham State College, Framingham, Mass. 1994. MBA extension, Harvard University, Cambridge, Mass. 1988. MBA, Ohio State University, Columbus, Ohio 1983. BSME, Ohio State University, Columbus, Ohio Affiliations Present. Board of Directors of Xenogen Corp., Alameda, Calif. March 2005 — Present. Board of Directors, Global Research Council, Children’s Hospital, Boston March 2005 — Present. Steering Committee, Association for Lab Automation (ALA), Geneva, Ill. January 2003 — January 2005. Board of Directors, ALA, Geneva, Ill. March 2000 — May 2002. Member of Compensation and Audit Committees, Alliant Medical Technologies, Norwood, Mass. Revolutionizing Laboratory Experimentation Caliper Life Sciences’ technologies fall under three broad categories: liquid handling, integrated robotic systems, and microfluidics. A liquid handler automatically dispenses a predefined quantity of liquid reagent or solvent into a medium such as a microplate. The company’s Sciclone line of products is widely used within the industry, says Kevin Hrusovsky, president and CEO of Caliper Life Sciences. Among the products is the Sciclone inL10, which allows users to generate real-time performance data and to automatically react to changing conditions. The Sciclone i1000 high-volume liquid handler can independently control delivery of liquids into each well of a 96- or 384-well microplate. A standard Sciclone comes with a 20-position deck and can be configured with many different options and accessories to enable the full automation of protocols. The company’s Sciclone ALH 3000 workstation is a complete liquid handling workstation that automates a wide array of research and diagnostic applications, from genomic and proteomic sample preparation to biomolecular and cell-based screening assays. The ALH 3000 eliminates the need for multiple liquid handling devices by providing 96- and 384-channel pipetting, a single well access through an independent 8-channel pipettor, and bulk reagent dispensing in one configuration. The company’s second chief technology is integrated robotic systems, where robots feed liquid handlers around the clock to run complete experiments. “That means scientists can be running experiments overnight, and when they come in the next day, the tests are done,” Mr. Hrusovsky says. Among the company’s product offerings in this area are the Allegro workstations, which seek to eliminate screening bottlenecks across a range of drug-discovery applications, including high-throughput screening (HTS), ultra-high-throughput screening (UHTS), and high-speed plate preparation. Also in the Caliper lineup is its Staccato series of systems, which are preconfigured and pre-integrated solutions to common applications, such as plate reformatting and replication, hit picking, enzyme linked immunosorbent assay (ELISA), and a variety of cell-based assays. The third area, which is the newest and, according to Mr. Hrusovsky the most exciting, is microfluidics. Caliper uses two different methods to generate fluid motion in microchannels: electrokinetics and pressure. Electrokinetic flow is generated when electrodes attached to computer-driven power supplies are placed in the reservoirs at each end of a channel and activated to generate electrical current through the channel. Pressure driven flow enables both charged and uncharged molecules, as well as cells, to be moved without separation. To create LabChip products, Caliper scientists combine manufacturing methods from the microchip industry with expertise in fluid dynamics, biochemistry, and software and hardware engineering to develop miniature, integrated biochemical processing systems. “We have shrunk the laboratory onto a little chip; a lot of what we were doing with liquid handling and robotics, we can now do inside these little chips, which are the size of a quarter,” he says. “In fact, you can’t even see the channels inside the chips because they’re the size of human hair, or smaller. We’re now running numerous experiments in these chips. We’ve also combined the chip with the liquid handlers and with the robots, so there’s one complete system now to help the industry use this leading-edge technology of microfluidics.” The company’s LabChip products include LabChip 90 and LabChip 3000. Most exciting, Mr. Hrusovsky says, is the LabChip 3000, which performs screening experiments in a serial, continuous flow fashion. “We commercially launched LabChip 3000 about a year ago,” he says. “Since then a host of marquis companies have bought into it, and many of them are also buying assay development services from us to further create assays or tests they can run on the LabChip 3000. LabChip 3000 is being used to discover new drugs and to profile candidate drugs to ensure they are safe and effective. That technology is really gaining traction, and I think is key to our future growth.” The newest area for Caliper is a PCR chip that would allow molecular diagnostics to be done inside its microfluidic chip.

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