08th Jun 2012

Cavan Redmond's First 100 Days at WebMD

WebMD Health Corp is a US firm that specialises in providing health information, primarily through their WebMD website, which is used as a resource both by doctors and the public at large, attracting 25 million unique visitors per month. The site enables its users to answer healthcare and wellness-related queries, find out about symptoms and ailments and read up on the latest available drugs and treatments. It’s the number two health info provider in the country with a current market cap of $1.28 billion. 

Having posted double-digit growth for several years, the company ran into trouble in 2011 due to a knock-on effect from developments in the pharmaceutical industry. WebMD’s revenue is solely dependent on advertising and sponsorship paid for by the pharmaceutical firms who’s healthcare products it promotes on its website. But a number of big drug patents expired last year, causing several large pharmaceutical companies to choke back on their marketing spend when revenues from branded products were hit by pressure from generic competitors. WebMD’s profits were badly affected.

It looked into selling itself off late last year and stated it had “several potential acquirers.” Its problems don’t look likely to go away in the near term, and the company has forecasted its revenue for 2012 will be “significantly lower” than last year’s. In the midst of these difficulties, WebMD’s CEO of seven years, Wayne Gattinella, abruptly resigned at the start of 2012, and the company called off the search for a buyer.

Now it has named Cavan Redmond its new CEO. Redmond has experience marketing healthcare products as a former executive with Pfizer. The light at the end of the tunnel for WebMD is in the anticipated approval and launch of new patented drugs at the end of this year. Redmond’s big challenge will be to secure marketing revenue for these drugs from pharmaceutical companies, including the one he worked for until taking the helm at WebMD. He looks well placed to bring that off, but even if he does it’s unlikely to improve the balance sheets at WebMD until 2013, meaning Redmond and WebMD are in for a challenging year ahead.

Redmond will want to start as he means to go on, and the first 100 days in a new role are routinely seen as an important indicator of an executive’s potential over the long-term. He knows the market well, and his initial time with the company will be spent strengthening his contacts in the business, organising his team and firming up his plans for the future. With so many plates spinning in the air, and so much at stake for the company, a strong First 100 Days Plan will be an essential asset.

Hilda Goold

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