Norgine, a company founded by Dr Victor Stein in Prague in 1906 to manufacture industrial chemicals, moved to the production of specialty pharmaceuticals with its laxative treatment Normacol some years later. Initially growing very slowly and stalling, inevitably, during the war years by the 1960s it had operations in the UK, France and Belgium. But it wasn't until 1987, the year that the current CEO Peter Stein (grand-nephew of Victor) came on board, that a sustained period of European growth really began. Twenty-two years on, the company, with a focus on gastroenterology and hepatology, is still expanding in Europe. Pharm Exec Europe spoke to Stein to find out how Norgine is beating the credit crisis, and whether this good fortune is likely to continue.
Would you say Norgine is recession-proof as a company, and is specialty pharma recession-proof as an industry?
Norgine, and more generally the specialty pharma industry, is certainly recession resistant. By developing innovative products and demonstrating their advantages for the patient through controlled studies, we are confident that we can continue to grow even in these economic times. However, in the long run, the credit crunch is causing a massive increase in governmental debt and ultimately they're going to be looking to reduce expenditure in order repay this debt. As an industry, we need to make sure we're part of the solution helping to reduce overall healthcare cost by offering cost-effective therapies not part of the problem.
Norgine has enjoyed 22 consecutive years of growth. Can this continue?
I have no doubt that Norgine can continue to grow. We have a strong portfolio of products with remaining growth potential and we're committed to supporting it by expanding our geographic reach and developing line extensions to further improve our service to patients. In addition, our R&D pipeline is progressing well and we are actively seeking to add to it by licensing in further products. The current environment, if anything, makes our growth potential more realistic because there are very few companies that have an infrastructure across Europe, as we do, and are able to partner products and develop them for the entire European marketplace.
Have you reached your full potential in Europe now? Will you expanding into the emerging markets?
We're very focused on the European market, and we're still growing here. There are some European countries, such as the Accession States, where we don't have a presence at the moment and we're working with a partner to launch our first products in those countries. We only recently established our affiliate in Portugal, so we also see significant expansion potential there. In addition, our affiliates in Italy and Spain are also comparatively young, and will see above average growth for us.
But, growth is not just going to come from geographic expansion. Most of our growth will come from supporting our existing products in our existing markets and from launching new products through this sales and marketing infrastructure. We aim to be the best possible partner for a company wanting to develop and launch a product in the European marketplace; moving into, say, BRIC doesn't really support that ambition. We have an infrastructure across Europe that is consistent and operates to the highest standards; that's enough of a challenge for any company, without being diverted into what may be very attractive markets but which do not constitute our core focus.
Similarly, we will not build a commercial infrastructure in the US; while we have and will continue to develop products for the US market through to filing for an NDA, we'll collaborate with local companies that have the sales and marketing infrastructure needed to commercialise them. Our existing partnership with Salix Pharmaceuticals to market MOVIPREP is an example of this.
You've been around as a company for over 100 years. What instigated the growth that took off 22 years ago?
One of the catalysts was the development of the European marketplace, which was quite embryonic back in 1987. That shifted the focus of the company, which was founded in 1906 in Prague but had moved west in the late 1930s. Because we no longer had a home market as such, we were free to consider all of Europe as our home market, in the way that a US company would consider all fifty states as its home market. It won't have an equal presence in all fifty states, but it does look holistically at the entire market.
How do you stay motivated after 22 years heading the company?
While my title may still be the same, the job has changed enormously as Norgine has grown. It's always fresh; it's more exciting than ever, more fun than ever. This is partly because we've managed to recruit and retain a fantastic team with innovative ideas and experience from other environments that they are able to carry over and implement within Norgine. As a relatively small company, we can reduce bureaucracy and allow people to take responsibility and implement change quickly. As a result it's a fun, apolitical environment in which to work, where you can effect change and directly see the results.