Think Small Grow Big - Pharmaceutical Executive


Think Small Grow Big
After Adderall, what's next for Shire? CEO Matthew Emmens thinks the answer lies in a simple strategy.

Pharmaceutical Executive

"Going back 20 years, it was blasphemy to say that we're going to have products that weren't invented here," says Emmens. "In the 1980s and 1990s, we were building basic research like crazy-high-throughput screening, genomics, machines that took up rooms that you couldn't wear your watch in. And they said we would have so many compounds that we wouldn't know what to do with them. But it hasn't played out that way."

Evolutionary Thinking Many people in pharma talk about innovation and high science, but Shire execs talk about pragmatism and risk management. "We are most comfortable with evolutionary, rather than revolutionary, drugs," says Wilson Totten, MD, former chief scientific officer and executive vice-president of global research and development. (Totten, unable to relocate to the United States, will be replaced by Eliseo Salinas, MD, former global CNS head and vice-president for regional clinical R&D at Wyeth.) "Adderall XR is not a revolutionary drug," says Totten. "It is just a better version of a drug that has been around for a long time. That is now a $600 million dollar drug."

Emmens plans to keep Shire out of the rep race. "In the general-practitioner market, products are getting more and more alike," he says. "So companies have to turn up the sales force volume. That becomes expensive and difficult. With small, highly trained sales forces and distinctive products, physicians continue to see us at very high levels. They invite us back because we have something valuable to offer."

"Shire has their own therapeutic areas that they focus on that rely on a relatively smaller sales force," says Mehta Part-ners analyst Ken Wahl. The company is focusing on central ner-vous system, renal, and gastro-intestinal diseases. (See "Loaded in Late Stage," page 54.)

But streamlining its focus meant several exits for Shire. One of the first specialty areas to go was the vaccines business. Shire was the world's fifth-largest vaccine manufacturer, but the business was a drain on R&D and lost money-$14.5 million in the first six months of 2003. In April 2004, Shire agreed to sell the business for $120 million to Canada's ID Biomedical.

The company also plans to mostly abandon oncology and anti-infectives, which Emmens sees as risky, expensive markets dominated by Big Pharma.

Although Stahel built a successful company, the pieces were flung far and wide. When he left, Shire had 22 locations and more than 20 projects in development in five therapeutic areas. With the company's US commercial functions in Newport, Kentucky, and clinical development managed from Rockville, Maryland, there were barriers to integrating the development and marketing teams.

"We are consolidating the assets of the US business into a predominantly single site so that we can work in an efficient team-based format," says Greg Flexter, PharmD, executive vice-president, North America, who will soon relocate from Cincinnati to Pennsylvania. Shire will house both R&D and commercial teams in its 128,400-square-foot Wayne facility. By the end of 2005, the company will have four locations in North America, instead of the 14 it had at the beginning of 2003.

Make a Deal, Create a Pipeline In his first year as CEO, Emmens has not yet reduced the company's dependence on Adderall XR. In fact, the percentage of profits coming from that drug has continued to inch upward.

As a result, Shire's biggest concern has to be new products. Emmens says the company will become a "machine that scans the market for projects." His target is to add one or two projects to the pipeline each year.

The company's model calls for products with a sales potential in the $200 million to $400 million range. "These types of products don't move the needles for the big companies," says Emmens. "We are in different space."


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