Succinctly Shire: CEO Flemming Ornskov - Pharmaceutical Executive

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Succinctly Shire: CEO Flemming Ornskov


Pharmaceutical Executive



(VisMedia)
Shire is the standout in the branded industry's lost decade of slowing growth, climbing steadily up the revenue ranks with a strategic focus on the acquisition of specialty medicines, many for orphan indications, which command high margins in a privileged competitive space marked by friendly patients, faster FDA approvals and extended periods of exclusivity. But success in pharma has a notably short lifecycle, so the pressure is on to keep the good times rolling, especially in light of the company's recent transition to new leadership.

Shire is also a perennial takeover target, but with a market capitalization of close to $20 billion its a prize that won't come cheap. Feeding the speculation is Shire's solid late stage pipeline, which features new entries in undertreated conditions like dry eye disease and major depressive disorder.

To take a closer look forward, Pharm Exec met last month for a Q&A with new company CEO Flemming Ornskov, an academically–trained physician with a background in pediatrics who has also cut a wide swath through Big Pharma, having served previously in key management roles at Bayer, Bausch & Lomb, Merck, and Novartis. Ornskov recently unveiled a three-year strategy plan that places major bets on undertreated specialty segments in ophthalmology, ratchets up the commitment to leadership in rare diseases, and reinforces Shire's vaunted "just do it" culture through a faster, more agile decision-making structure. The plan positions Shire to take maximum ­advantage of opportunities to innovate by effectively forcing the in-house R&D and business development functions to compete in bringing the best assets forward to commercialization. It was also clear from the discussion that a few things about Shire will not change: a determination to stay independent and to avoid the Big Pharma contagion of bureaucracy and bloat. Yes, it's still true: when a Shire CEO shows up for a talk, there is no entourage. —William Looney, Editor-in-Chief

PE: Under your predecessor Angus Russell, Shire established itself as a high-growth specialty business with a distinctive culture, a key element of which was to avoid the perceived gridlock of Big Pharma. Since taking up the CEO post on April 30, you have been strong on the same mark, with a new strategic plan to guide the company through its next phase of growth. What are the plan's key elements and how do you assess the response of the investment community?

Ornskov: Our strategy has three components. The first is a commitment to leadership in specialty medicines. The second is to maintain our company's status as a growth stock, with a significant inventory of assets to propel us forward. The third is to become even more innovative in all that we do as an organization, but especially through our expanding in-house capabilities on research as well as Shire's traditional strengths in tapping opportunities through business development and licensing. This latter, dual capability is unique to Shire as a mid-sized company in the pharma space. It is an attribute I intend to emphasize going forward.

Another, overarching aspect of the strategy is the imperative I see to make Shire a truly international organization. We are at the stage now where we need to think seriously about building a stake in markets like China and increasing our presence in Japan. Shire is already in Latin America but we can certainly do more in that region. In Europe, we are well established but there are areas where our footprint can be augmented.

As far as the investor community is concerned, I think the consensus is the strategy is forward looking and prudent: it will keep us lean as we grow and is appropriately balanced between opportunity and risk. Like everything in this business, time—and the market—will tell.


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