Esteve has long been a family-run business, though in early 2018 the Spanish champion decided to make a daring, though calculated, move and positioned the then CCO of Lundbeck, Staffan Schüberg, as their new CEO.
We have world-class experience [in neuroscience and gene therapy] and we see these areas as highly attractive from a long-term commercial perspective
With this hire, the group hails a new strategy, aiming at “moulding Esteve to what we view as its best fit within the global pharmaceutical ecosystem. This will be servicing high-end clients with APIs and specialty pharma and segregating out generics arm of the business,” explains Schuberg. “We are still strategizing on how to do this, for example, through a joint venture or attracting venture capital to increase the generics business size. In any case, this branch must be grown and act on a global level to be efficient, working on high volumes demanded by the global generics market.”
As part of this R&D focused mindset, the company will be focused “in neuroscience and gene therapy. We have world-class experience here, and we see these areas as highly attractive from a long-term commercial perspective. Our deep knowledge allows us to recognize the emerging challenges and opportunities in these areas, ultimately giving us a strategic advantage.”
To do this Schuberg will be active in the market as he acknowledges that “a strong pipeline requires multiple shots on goal, and we now recognize the need to complement our state-of-the-art R&D engine with a state-of-the-art business development chassis that can lead to more shots. Therefore, we are absolutely in the market for possible acquisitions and mergers with companies that represent a strong strategic fit for Esteve.”
The next question is, what pieces fit the Esteve puzzle? Schuberg identifies three main avenues. “First, companies with mid- to late-stage pipelines that align with our core focus in neuroscience and gene therapy. Second, enterprises that have solid growth projections, but most importantly strong EBITDA. Finally, companies that can help us increase and strengthen our geographical coverage by expanding or complementing our current European footprint.”
This geographic expansion is key for long term success as one of the main challenges that Schuberg must overcome is that “Esteve has always had a global R&D strategy without a global presence. This results in significant risk during the development phase with smaller returns in the end because the commercial opportunity is limited to certain regions. With a larger geographic footprint, we will be able to truly maximize the potential of our innovative pipeline.”
The logical expansion is towards the US, as it “conservatively represents more than half of the global market, so ignoring that region would be foolish. Every single successful global pharmaceutical company has a strong and meaningful US presence,” points out Schuberg. This expansion for Esteve inevitably relates “back to our pipeline. We see a tremendous fit between several of our development-stage therapies and the unmet needs in the US market. Rather than spreading ourselves too thin, I view a meaningful US presence as critical to capitalizing on our R&D investments and ultimately helping more patients.”