Succinctly Shire: CEO Flemming Ornskov - Pharmaceutical Executive


Succinctly Shire: CEO Flemming Ornskov

Pharmaceutical Executive

PE: Shire set a target several years ago to raise sales outside the United States and Europe so that the two regions would account for no more than 50 percent and 25 percent of global revenues, respectively, in 2015. Are you on track to achieve that goal?

Ornskov: At present, 70 percent of our revenues come from the United States, with the remaining 30 percent ex-US, including Europe. Our aim is to grow the ex-US business significantly. Nevertheless, I think for us to anticipate going too far down that road is unrealistic in so short a period of time. I see the United States as the most attractive pharmaceutical market in the world. It is a high-value geography, with a pricing and reimbursement climate that compares favorably to other countries. We are not going to be "hyper-focused" on the United States, but the reality is that for the foreseeable future it will remain our principal market.

PE: There is a perception that Shire has grown through a commitment to "search" rather than research, with products derived from vigorous licensing activity rather than in-house R&D. Does the new strategy propose a change in that approach?

Shire’s Pipeline: A Closer Look
Ornskov: I have experience working in large and small pharmaceutical companies. The lesson I derive from both cultures is that medicines innovation is a difficult quest. There is no fixed formula; in many ways the quest for innovation must be opportunistic. Our approach at Shire is to strive for a balance between in-house opportunities and externally sourced innovation. The key thing we are doing differently is to raise the bar on decision-making by effectively asking our business development and research groups to compete in bringing the best assets forward, whatever the source. As part of that, I've created two senior executive-level committees, which I chair, that will simplify, coordinate, and prioritize decision-making around our entire product portfolio. The first is focused on executing around marketing and sales targets for Shire's current in-line products. The second concentrates on opportunities from all assets in the pipeline, whether these come from internal sources, through partnerships with affiliated institutions, or other external channels.

The two committees are designed to work together so that as a new asset comes forward, we can quickly assess how it may impact the balance within the full portfolio, particularly in regard to critical resource allocation decisions we must make in moving compounds into costly Phase III development. An example is our latest acquisition of SARcode Bioscience and its key asset, lifitegrast, an ophthalmologic drug for dry eye disease—a condition affecting 25 million US patients—which is now in Phase III trials. Once the deal was struck, the committees pondered the question: how will this promising asset, in a big therapeutic segment, change prioritization around our existing pipeline, particularly those compounds requiring more resources at the late stage of development? Should we de-commission some work to make room for investments that might augment or grow this high-potential acquisition? The answer is, yes, we did, by scrapping a previous decision to initiate a Phase III trial on an internal compound we were working on to address negative symptom schizophrenia.

The example shows that it is natural and healthy to have competition between these two sources of innovation—internal and external—because it makes the deployment of resources around the portfolio much more efficient. Execution of our strategy depends on this new decision-making structure I have put in place.


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