JOHNSON CITY, Tenn. (WJHL) – LabConnect was already in growth mode when COVID-19 hit, CEO Tom Sellig told News Channel 11 recently.
The virus has simply amplified interest in the work done by a business that employs about 200 in Johnson City and could double that number within several years.
“Every day people are talking about vaccines and clinical trials, and you know it’s much more mainstream,” Sellig said in a one-on-one interview Friday. “There’s just massive money going into the industry which is creating innovation and new clinical studies, which is obviously a good driver for us.”
That unexpected growth source, general strength in clinical trials volume and a business model Sellig said is helping LabConnect capture market share from competitors and leave him confident in growth projections.
“We’ve sold more year to date than we did all of last year and our sales are really significantly ramping,” Sellig said.
The growth, and LabConnect’s relocation of its corporate headquarters from Seattle to Johnson City — where it has based its operations for close to 20 years — spurred a recent incentive package with tax breaks and grants from the state of Tennessee, TVA and local governments.
Tuesday, it also earned the company a visit from Tennessee Gov. Bill Lee for a ribbon cutting on a recent expansion.
“This is a company that is engaged in what I would call ‘American ingenuity,’ Lee said. “Companies that are a part of addressing global crises that we find ourselves in.”
The people helping LabConnect address those crises range from entry-level staff who build lab kits and typically make up to about $30,000 annually, Sellig said.
“We’re hiring quite a few of those people just given some of the growth,” he said. Indeed, the company reported 185 Johnson City workers June 30 as part of incentive reporting by its landlord, Mitch Cox Companies.
Mid-level jobs paying $40,000 to $80,000 annually are in project management, IT, operations and human resources, Sellig said.
LabConnect’s board chairman, Eric Richman, told people touring LabConnect’s operations the problem-solving element has become an important aspect of the company’s culture. He pointed to a large tree painted on the wall and said each leaf represents a study LabConnect has been involved with.
“It reminds our staff we are eliminating morbidity and mortality,” Richman said.
Now LabConnect has a little help in the process thanks to the incentives. But Sellig said the relationship with local government and economic development leaders has been just as important as financial incentives.
“Having these relationships can be beneficial in multiple ways – not only economically but just the ability to help find labor, to help when we have some regulatory or legal issues in some cases,” he said “There’s a variety of ways the relationships are already paying benefits for us. If you’re in a real big market, trying to get that support is, you know good luck.”
- Local “Payment in lieu of tax” five-year agreement affects personal property (equipment) tax and requires:
- Creation of 211 new jobs
- Capital investment of $8.6 million
- Tennessee Valley Authority incentive
- State of Tennessee Economic and Community Development incentive
Aside from a shortage of direct flights in and out of Tri-Cities Regional Airport, in fact, Sellig said almost everything about Johnson City and the region hits the plus side of the ledger for the company.
Those factors include real estate costs, which Sellig said are about a third of what they’d be in Philadelphia, where he lives. Employee retention is also easier than in some markets where more players in LabConnect’s sector fight for talent.
“We have many employees who have been there since the start with us and our ability to grow and attract people hasn’t really been a major issue for us.”
A little the more about the company
LabConnect covers almost every aspect of a clinical trial aside from the actual testing of samples. That includes project management, data management and collection of samples completed by other entities before sending them to the lab.
Growth has led LabConnect to expand its freezer capacity and other aspects of its “biorepository,” which COO Barry Simms said contains more than half a million samples.
Sellig said even before COVID the company was focusing on burgeoning markets.
“Cell and gene therapy, immuno-oncology, rare and orphan diseases,” he said. “These are areas where we’re focusing and they all happen to be seeing significant growth.”
Sellig, who took over as CEO just over a year ago, said LabConnect is carving out a reputation with what he called an innovation-driven “differentiated business model” that’s allowing it to win business from competitors.
“These aspects of our business are really attracting a lot of attention from much larger global companies.”
We’ve won … ‘rescue studies’ where they started with one of the large global (contract research organizations) and decided for some reason they couldn’t best serve their needs, and then came to us.
“As you win those projects you need the resources and staff to support them. We’re really trying to balance supply and demand and right now our sales growth curve is so steep we’re needing quite a few people to support us.”