DuPont: A legacy of startups

DuPont CEO Edward Breen is preparing to undertake $1.6 billion in cuts by the end of 2016 – belt-tightening that's already included layoffs in Delaware, with more to follow.

The uncertainty about where and when the job cuts will come creates stress and anxiety among workers.

But a few will see the cuts as a chance to explore business ideas they otherwise may have never acted on, say former DuPont employees who have launched successful companies of their own.

"For some, this is an opportunity to move forward with the thing they've always been afraid to do," said CD Diagnostics CEO Rick Birkmeyer. "When you work in a science division, you see things that could be really big with a little work. But sometimes that steady job keeps you tied down from making that leap."

Layoffs could spur Delaware's bioscience industry

DuPont has a well-established history of spawning entrepreneurs.

W.L. Gore & Associates and Endo Pharmaceuticals are among the most well-known companies launched by former DuPonters.

But many other business were started by ex-employees and often after upheaval at DuPont.

Chris Ungermann seized his opportunity to become an entrepreneur after leaving DuPont in 2005 when the company dissolved a $1.2 billion joint venture with The Dow Chemical Co. He licensed a technology first developed in Switzerland to launch Sanosil International, now renamed as Halosil International. The New Castle company now has deals with several oil refineries in Mexico where its products are used to purify water. The company also is marketing its "fogger" system that can kill infectious agents in hospitals and homes.

Julie Elble left DuPont in 2001 just ahead of layoffs. Shortly after leaving the company she formed Critical Path Services, a contract research organization. Originally based in Newport, Critical Path moved just over the state line to Garnet Valley, Pennsylvania, in 2006.

Jeff Fetterman went on to start two companies ultimately after serving as the director of strategy and business development for DuPont Consumer Health and DuPont Pharmaceuticals, a division sold to Bristol Myers Squibb in 2001 for $7.8 billion.

The DuPont School

Several business owners credited DuPont for providing the training they would later use to build their own companies.

“I would say I was custom built to be an entrepreneur because of the unique professional experiences I was able to develop at DuPont,” Fetterman said.

Fetterman spent nearly a decade at the company, ultimately becoming the director of strategy and business development for DuPont Consumer Health and DuPont Pharmaceuticals before the division was sold.

He went on to co-found Empower Health, a integrated health care management company, with two business contacts from his time at DuPont. In 2001, the company was acquired by American Healthways, now Healthways, in Nashville, Tennessee.

Fetterman then re-connected with former DuPont colleague Gary Slatko, once the director of new product planning for DuPont Pharma who went on to become vice president of medical services for AstraZeneca and vice president of the care management division at GlaxoSmithKline.

At DuPont, the two men had worked on developing a management plan for Coumadin, a DuPont blood clot drug with potentially serious side effects. The plan they developed directed doctors in the proper use of the drug resulting in a seven-fold sales in increase. By the time DuPont Pharma was sold, the drug accounted for about a third of the division’s $1.5 billion in sales.

"When we reconnected in early 2001, we began talking about how we could take these other drugs and provide the same service, so we took the methodology we applied at DuPont and commercialized it with a new company called ParagonRx," he said.

The 14-person company was sold in late 2009 to inVentivHealth, then a publicly traded company based in New Jersey.

Birkmeyer said he specifically sought a job at DuPont in the early 1980s to learn skills he would need to start his own company. Large companies like DuPont and AstraZenca, he said, are great for providing an education in how a business should be run.

"They tend to have tremendous systems that, if people can implement them successfully in a small company environment, will make a big difference," he said. "Big companies understand safety, regulation and quality, so if a small company can incorporate that, they'll be 10 times better."

Birkmeyer worked a manufacturing product manager in DuPont’s antibody section, where he saw an opportunity that would allow him to launch Strategic Diagnostics Inc., later SDIX, a highly respected drug testing company in Newark that once employed nearly 150.

He later took the reins of CD Diagnostics, a Wynnewood, Pennsylvania company that was developing a simple test doctors could use to diagnose joint infections in minutes. He moved the company to Claymont, a decision bolstered by a $500,000 state grant that required the company reach 170 employees by 2016. The company recently brought its first product, Synovasure, to market in Western Europe and Asia and now expects to bring in more than $13 million this year, even before its test is approved by the FDA.

In addition to leading CD Diagnostics to release its first product in Europe and Asia, Birkmeyer also became a general partner at Leading Edge Ventures, one of the state’s few venture capital firms targeting early state tech companies.

"I stayed because Delaware is small and connected so it was easy to reach those people who could help us," he said. "I recognize what made me successful were those people who were willing to do that, which is why I helped form Leading Edge. Everyone needs a little help."

Fertile ground

When it came to starting their own companies, several entrepreneurs said they chose to remain in the region because of the network they had developed at DuPont.

"It was a combination of opportunity and coincidence," Ungermann said of his decision to start his company in Delaware. "For me, it came together that I met the right people here."

Fetterman said his decision to stay in Delaware came down to two things: family and network.

“My family felt rooted here and I didn’t want to them to have to move,” he said. “The other took me longer to appreciate but the network of people I knew here in my career and personal life turned out to be huge for me."

Fetterman said that support network can be invaluable to people as they begin the next stage of their lives as entrepreneurs.

“The willingness of certain individuals to go above and beyond to help your businesses is extraordinary,” he said. “Even if you don’t appreciate their value to your business concept, those connections you have in the community will turn out to be really important when you least expect it.”

Elble said one of the reasons she stayed in the region was because of the area's large base of scientific talent, including former DuPont workers. She hired a handful of DuPont workers when she opened Critical Path and has since expanded that total to more than a dozen.

"We are really blessed," she said. "There are not lot of people out there who have sophisticated skills in science. The greater Philadelphia region from Delaware through New Jersey has been a scientific hub for quiet a long time."

Ben Chien, who left DuPont Pharmaceuticals to start the liquid chromatography–mass spectrometry equipment business QPS in the late 1990s, said the layoffs surrounding the division's sale to Bristol Myers Squibb enabled his company to grow. Today, QPS is a $120 million company that employs 260 in Delaware and another 1,170 worldwide at offices in Europe, India and Asia.

"We hired a lot of those people," he said. "It was a great opportunity for us and we were very happy to hire great people from them."

Delaware also offers fertile ground for small businesses because its a low-cost state in a high-cost region, said Eric Teather, who launched the New Castle lighting efficiency company White Optics in 2009 after he and business partner Shaun Zhu left DuPont

"The cost of living is cheaper than Philadelphia or Baltimore, electricity prices are more affordable and you still access to airports and other amenities," he said. "Plus, there is a great pool of talent."

Based on his experience with downsizing at DuPont, Fetterman said current employees at the company  are experiencing a range of emotions as they wait to see what the future will hold.

Some, he said, are looking at potential layoffs as forcing them to finally focus on that entrepreneurial idea they’ve been secretly thinking about all along.

Others are deeply concerned, believing the source of their security has been the large, relatively stable company that employs them.

“Entrepreneurs learn quickly that the company is not the source of your security,” he said. “Your life, experience and knowledge, that’s the real security.”

Contact business reporter Scott Goss at (302) 324-2281, sgoss@delawareonline.com or on Twitter @ScottGossDel. Contact Jeff Mordock at (302) 324-2786, on Twitter @JeffMordockTNJ or jmordock@delawareonline.com.