Would you ever think of giving away $15,000,000 to your employees? Keith Dionne did.
When Dionne became CEO of Alantos Pharmaceuticals in 2003, the firm was struggling financially but four years later, it sold for $300,000,000. Most importantly, Dionne negotiated with Alantos investors to give an extra $15,000,000 to the forty-five employees who helped create that value.
Dionne’s childhood story is as interesting as his time at Alantos. At age 14, his stepfather left his mother, leaving Keith to run the family farm in rural Idaho.
Between school, extracurricular activities, and farm work, he was an abnormally busy adolescent who quickly learned the meaning of responsibility. However, as Dionne says, “It seemed perfectly natural to take over the farm when my stepfather left. Its only now, when I look back that it seems amazing that a 14 year old could run an 80 acre farm. It definitely made me grow up quickly.”
His laborious farm work supported both himself and his mother (who also worked as a nurse), and taught him many life lessons that made him the man he would grow to become. Dionne says, “I would stay up late into the night finishing all of my chores and homework then start again at dawn milking the cows, feeding the animals and trying to get the irrigation done.“ This daily schedule would continue through his high school years and by the time he got to March of his final year of high school, it finally occurred to him that he had forgotten to apply to for college.
The only school that would still accept his late application and provide financial assistance to help him attend was the University of Idaho. He studied there for a year, and then put his studies on hold for two years to become a missionary for the Mormon Church (The Church of Jesus Christ of Latter-Day Saints).
After successfully serving his mission in Spain for two years, Dionne transferred his studies to Brigham Young University in Utah where he finished his undergraduate training in chemical engineering. Upon graduation he began to consider his future options. Since his interests included law, medicine, business, engineering and biomedical research, Dionne went on to earn a Ph.D. in chemical engineering at MIT while also researching ways to create a bio artificial pancreas and getting an MS in technology policy that covered business and law at the same time.
From 1989 to 2003, he worked at various companies including CytoTherapeutics, Alza, and Millennium Pharmaceuticals advancing through the ranks of each company until finally, in 2003, he became CEO of Alantos Pharmaceuticals.
When Dionne arrived at Alantos, he discovered that the company’s technology platform wasn’t working. He approached the stockholders and advised them that they should consider one of two options: shutting the company down and taking a loss or taking a new direction. The investors agreed to support Dionne in taking the company down a new path to try and develop novel drugs for diabetes and osteoarthritis.
Dionne, with the help of his forty-five employees based in Heidelberg, Germany and Cambridge, Massachusetts, focused the company on developing an MMP 13 inhibitor, a drug used to treat osteoarthritis, and a DDP4 inhibitor, a drug used to treat diabetes. The company made some amazing progress such that although both of the drugs were still early in development, Amgen (a large pharmaceutical company based in Thousand Oaks, California) became interested and very excited about the drugs’ potential, and offered to buy Alantos. The existing investors in Alantos were thrilled and the prospective sale of the firm catapulted the company from the bottom to the top of their portfolio as it was on the brink of delivering a very satisfactory return on their investments.
Amgen’s offer to buy Alantos initially intended to keep the employees in both Heidelberg and Cambridge. However, as time progressed, Amgen realized that although they still wanted the revenues Alantos would produce, they would have to let all the employees go. Even though all employees had some stock ownership, it began to appear that they would be laid off without severance and Dionne felt the lack of a leaving payment was unfair especially after all the hard work of his co-workers to grow the company from nothing.
Realizing the situation, he went to Amgen to negotiate a severance package for his co-workers and to sweeten the deal, he offered to forfeit his own guaranteed severance package of a year’s salary. Amgen agreed to Dione’s suggestion and came up with a very fair package for the rest of the company employees. Dionne later said, “I knew I would be ok and it wasn’t fair that the employees lose their jobs and not receive severance packages especially since it was their hard work that created the products that made the company worth $300,000,000.”
Furthermore, Dionne went to Atlantos’ investors and asked them to allow him to distribute all unassigned shares in the option pool to employees as a bonus. Alantos’ investors generously agreed, allowing Dionne to distribute an additional $15,000,000 of value to all employees – seeing as after all, Dionne and his colleagues had transformed a failing investment into one of the most successful companies in their portfolio.
Team work and taking care of one’s team are hallmarks of Keith Dionne. They have led him to do extraordinary things in all aspects of his life. Giving millions to his forty-five co-workers was just one of them.
From successful entrepreneur to amazing human being, Keith Dionne is worth getting to know and working with. Dionne is currently CEO of Constellation Pharmaceuticals in Cambridge, Massachusetts, a father of four, community soccer coach, and a member of the Belmont community.
Luca and Simon Sivers are high school students and contributors to Progress Through Business.
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