Joseph R. Gregory
The story of the business career of Joseph Gregory is a story of family, of innovation, of hard work and of faith. Born in Tacoma Park, Maryland in 1954, Joe Gregory was the third child of Lloyd L. and Mary Louise Gregory. He grew up in Rockville, Maryland, an upper-middle class bedroom community of Washington DC that, at the time, boasted one stoplight. Lloyd Gregory worked as a Government upper level Accounting Executive and Mary Louise was a homemaker. Later she earned a chemistry degree and went to work for the Fairfax County Health Department.
Lloyd and Mary Louise were determined that their children learn the value of hard work and the basics of commerce, so every time it snowed, the Gregory boys could be found shoveling neighbors driveways, and every summer they made the rounds of the neighborhood selling vegetables from their mother's garden. "We weren't rich by any means," Gregory remembers. "My mother was always looking to save money on the grocery bill. So we bought from the reduced section of the store and my mother would buy Carnation powdered milk to mix with regular milk to make the budget go farther. There's nothing worse than tasting lumpy milk. We had a nice, but modest home."
The family was tight-knit, Gregory remembers, especially the five brothers. "We fought, scratched, forgave each other and got along," he says. "I would get hand-me-down bicycles and things like that and fix them. So you learn skills in life having five brothers and a sister."
A gifted athlete, Joe earned All-Conference honors as a high school quarterback before an injury shelved any notions of getting a college scholarship. "The Lord was gracious to me and got me refocused in areas where I needed to be anyway," he says. Joe graduated in 1977 from the University of Maryland with a BS in business administration. I chose business because I knew I wasn't smart enough to be a doctor and I knew I wasn't going to work hard enough to be a lawyer. I was interested in people and I liked statistics, marketing and operations management."
When he graduated from college, he found a tough job market waiting for him. It was at that time that Joe began what would become a pattern in his professional career. He started doing things that would later become commonplace, but at the time were revolutionary. First, he took a job in the computer division – remember this is 1977 - the computer division of the National Cash Register Company. "I sold basic workstations," he remembers, "which at that time were these monstrosities with eight inch floppy discs." His territory was Washington DC, where he tasted his first professional success.
Meanwhile, hundreds of miles away, events were unfolding that would change Joe's life forever. His brother John opened a pharmacy and then a drug distribution company called General Injectibles and Vaccines in rural southwest Virginia. John offered Joe part interest in the company and in 1983, Joe moved to Wytheville, Virginia. "I had turned my life over to Jesus Christ, so the simpler country values were more appealing to me."
With Joe heading up the company's sales effort, General Injectibles and Vaccines grew from $200,000 in annual sales to almost $150 million a year during the period from 1986 to 1992. They did it, by doing things that are now considered commonplace, but in that industry at that time, set their company apart. "In the early 80s, you would be surprised, but there were only two other family companies selling pharmaceutical supplies directly to doctors' offices, which is how he met his wife, Cindy. They married in 1992.
"One of the big things that we took advantage of was FedEx next-day air delivery," he says. "Things that you and I and everyone else take for granted today were novel business concepts in the early 1980s. Another thing was toll-free 1-800 line ordering and one day delivery. "
Gregory also developed an aggressive campaign to create relationships between the doctors who were his clients and the telemarketers who served them. "We started with two telemarketers and grew to 120. We had 50,000 physicians' offices around the country ordering from us." Gregory had his telemarketers find out the birthdate of each physician and arranged to have a card, balloons and birthday cake, complete with forks and candles, sent to the doctors' office on that day. "
But the Gregorys began to learn that competition follows profit. "With that competition, our margins started to slide." says Joe. "So we decided we wanted something with a little more exclusivity – something a little farther upstream."
The only way to do that was to begin producing the drugs themselves, so in 1993, King Pharmaceuticals was born as a contract manufacturer for large brand name drug companies. The brothers started the company on $100,000 in cash and a lot of debt, and a lot of prayer. Soon, the company began buying the brand name prescription drug lines that it had been producing on contract.
In 1997, King had accumulated enough profitable acquisitions to employ a sales force of 300-400 with $37 million in sales. It was time, the Gregorys decided, to go public. After one failed attempt to "go out," King launched on the NASDAQ under the symbol KG in May 1998. The incorporation helped King get the access to cheaper capital – allowing them to buy product line - that would eventually grow the company's share price four-fold: a little pill called Altace.
Marion Merrill-Dow owned the rights to Altace, but King targeted it for acquisition, remembers Joe. "We went to them three times asking them to sell us that drug and they weren't interested. Ultimately, we talked them into selling us Altace. It happened at the end of 1998 and was a $352 million transaction for a drug that had been doing $92 million dollars a year in sales but had a long patent life."
When King bought Altace, it had been marketed as a blood-pressure lowering drug. But a study released at the American Medical Association meetings in 1999 showed the drug also had indications to lower the risk of a second heart attack or stroke. "I got a phone call in my room at the Ritz-Carlton in Atlanta when I was at those meetings," says Joe. "Somebody from my marketing group was on the line at 5 in the morning asking me if I'd seen the paper yet. So I opened my hotel room door, standing there in my underwear and PJs, and looked down at the USA Today, and there was our company's drug on the front page. And I looked down the hallway and it was in front of every room. That's when I understood just how much our company's circumstances were about to change."
King never looked back. The company marketed Altace heavily on the new indications and sales and profits went through the roof. The stock went from around $14 a share to over $50. King moved from NASDAQ to the New York Stock Exchange. In just two and a half years, King went from its initial public offering to the S&P 500. No other company had ever gone from the IPO to the Standard & Poor's list in such a short time.
It was an incredibly exciting time for Joe and his family, but within a few years, the 16 hour days began to wear on him, he says. "It was a lot of work. At some point, you feel you just want to get off that horse. You know, you've helped build a successful company and you've got an OK resume' and you can go on to something else. I realized that a lot of people work really hard to get where I was, and that I was at a place where I could turn it over to others and feel I'd done a pretty good job."
King had gone from zero to hero. And as it did so, Gregory went from success to significance. "It's not that King wasn't doing anything of significance," he says. "We were. But it was a whole lot of hard work, and I just felt there were other significant things that the Lord was calling me to do."
So in 2003, Joe retired, purchased the old Bristol Tennessee Post Office and Customs House which became his new passion. He set to work with a team of specialists and pored over the original drawings of the circa 1900 building. By the time work was complete, the building was a showplace and Gregory had earned a restoration award from the Tennessee Preservation Trust.
Gregory also diversified his local investment portfolio. He bought a marina on Watauga Lake along with 700 acres of wilderness in the Doe River Gorge. He went in with coal magnate and friend Jim McGlothlin on energy investments. He continued to work with his charitable foundation, The Master's Table, to support children's ministries. He also became a software company executive, marketing programs that protect families from online predators and pornography.
Today, he says, he may have actually diversified a little too much. "I'm trying to simplify and refocus right now. You hope everything you do has merit, but I need to choose the things that have the most merit where I can make the most substantial contribution. As a mission minded man, I need to have that focus. The Lord Jesus deserves all of the credit for the man I am today."