Other products were also up: the antithrombosis agent Agrylin (anagrelide) by 48 percent, Pentasa (mesalamine) for ulcerative
colitis by 39 percent, Proamatine (midodrine) for hypertension by 60 percent, and the anti-epileptic Carbatrol (carbamazepine)
by 44 percent. What's more, Shire, which has UK marketing rights for Johnson & Johnson's Alzheimer's treatment Reminyl (galantamine),
received news of its FDA approval.
But the growth concealed a problem. The faster Adderall XR grew, the more Shire depended on it. As the company announced its
best-ever results in February 2002, Shire's stock slid from 750 pence to 525 pence (press-time conversion was $13.55 to $9.48)
in a week. The City reacted not to the announcement of growth, but to an acknowledgement in the annual report that "competitive
and cost pressures may compromise the company's ability to grow." By late 2002, Shire's board announced its desire for a more
global chief, and Stahel resigned.
The Big Little Company
Did global mean American? About 70 percent of Shire's business comes from the United States. But with its ranking on the FTSE,
and its place as the third-largest British pharma, Shire needed a CEO who wouldn't scare off stakeholders in the United Kingdom.
Emmens fit the bill. In 1999, he had gone to Germany to establish EMD Pharmaceuticals, Merck KGaA's US pharmaceuticals business.
The experience gave him an extensive European background and the entrepreneurial spirit that comes from starting a new business.
He also knew marketing and is cited as one of the brains behind Astra Merck's success with Prilosec (omeprazole).
Emmens joined Shire as CEO in March 2003, arriving in an environment of uncertainty. Noting his arrival, The Times of London wrote that "investors should not feel compelled to buy the stock until Mr. Emmens' strategy becomes clear."
The paper had a valid point. Shire's 2002 figures showed the company's dependency on Adderall increasing: 42 percent of revenue
came from the drug and its extended-release formulation. And although the Microtrol bead that controls the release of Adderall
XR is protected until 2018, the drug's marketing exclusivity under the Hatch-Waxman Act expires in 2004. (See "ADHD Shakedown,"
No Sudden Moves
Emmens spent his first few months at Shire watching and learning. In an interview this year with the BBC, he explained: "The
best piece of business advice was given to me by a man named John Lyons who ran the US division of Merck in the early '80s.
He told me that when you are new in a job, spend most of the first six months listening, even though people will expect you
to tell and talk a lot. His reasoning was simple. Early on you will have no credibility, and you are likely to make huge mistakes
due to lack of knowledge."
Emmens started talking in July 2003. He laid out a vision of the company's future with three components: (1) a focus on licensing
and acquiring late-stage products, (2) a strategy of marketing to specialists, and (3) excellence in just three therapeutic
His hope was to re-create the perfect storm that drove Adderall. "Adderall's success serves as a model for us," he says. "It
shows the viability of a small product that becomes big in the hands of a highly skilled sales force and one that focuses
on specialist physicians, even in the face of significant competition."
With the new strategy in place, Shire no longer needed its discovery research laboratory in Laval, Quebec, and pulled the
plug on that facility in the third quarter of 2003. It also sold off its research facilities in Northborough, Massachu-setts,
and Sainte-Foy, Quebec.