Before a new drug can be commercialized, it often must undergo extensive pre-clinical and clinical testing and regulatory review to verify safety and efficacy. These pre-clinical tests are often very expensive and can take a lot of time. That’s why a lot of small to midsized biotech companies rely upon Contract Research Organizations, or CROs, like Medpace Holdings (MEDP) to execute these clinical tests, writes CQ, editor of Compounding Quality.

It’s important to highlight that Medpace itself is not a biotechnology company. It helps biotechnology companies in executing their clinical tests, providing them with reliable cash flows. In general, Medpace completes clinical tests up to 30% faster compared to those managed in-house.

Just like Kelly Partners Group, Medpace is still in the hands of its founder. August Troendle founded the company in 1992, is still the CEO today, and owns 24.7% of the company. As Troendle is already 67 years old and his stake is worth roughly $1.8 billion, he’s not running the business for the money. He genuinely loves what he does.

To quote Warren Buffett: “Some of our key managers are independently wealthy. They work because they love what they do and relish the thrill of outstanding performance. They unfailingly think like owners. It are the best kind of managers we can wish for.”

Subscribe to Compounding Quality here…