Esteve’s Staffan Schüberg on Mid-Cap Innovation, Generics Divestment & Growth Foundations

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Way before securing the CEO role at Esteve in 2018, Staffan Schüberg built a career that saw him rise through the ranks of Lundbeck, from commercial activities in Sweden to global chief commercial officer.

 

Schüberg got his first pharma job at Lundbeck in 1994 after serving in the Swedish Royal Navy and receiving a business administration degree from London Guildhall University. His two-decades-journey with the Danish CNS giant included stints as general manager for Portugal – where he launched the affiliate – regional VP for Europe, US president, and finally global chief commercial officer.

At the time he resigned from Lundbeck to join Esteve, chairman Lars Rasmussen thanked him publicly for his “outstanding contribution, leadership and significant achievements,” saying that Schüberg left a strong and healthy company heading in a clear strategic direction.

His arrival in Spain was part of a top-down shake up of the historic Catalan laboratory. For Esteve, hiring an external CEO unrelated to the family was a risky move but a necessary one if it was to implement a new, more international, innovative and specialized business strategy.

“What attracted me, and the entire management team, to Esteve is that the company was on a change journey. Esteve was coming from a predominantly Spanish heritage and, over the years, became an international player,” Schüberg recently told PharmaBoardroom.

That predominantly Spanish heritage included APIs, generics, OTC, Rx products and R&D activities. To avoid spreading itself too thin, under Schüberg’s leadership, the company kickstarted a transformation that would end up with the divestment of its generics portfolio, new headquarters and acquisitions.

“So far, we have implemented substantial changes, selling the generics business, acquiring new companies and products, and changing the R&D engine to create a setup that allows us to be more flexible when going after new opportunities, for instance, by collaborating with biotech companies or academic organizations,” he explained.

 

Leaving generics behind

The first major development of Esteve’s Schüberg era came at the end of 2019 when the Barcelona-based company sold the generics division to Towa Pharmaceuticals for EUR 320 million. Although the business provided significant turnover to the group, the Swedish exec believes that the move was justified since profitability was “low” and growth potential was “limited.”

With generics out of the way, Esteve was to become a much more international, proprietary, pharma player, relying on two businesses: third-party manufacturing/APIs and specialty pharma.

Through Esteve Química, the group manufactures substances for other pharma companies – including top players across Asia, Europe and the Americas – from five factories. But even as the business brough in EUR 285 million in 2021, it will continue to play a supporting role.

“While we will try to grow [both businesses], strategically, if we say that our goal is to become much more international, proprietary, specialty pharma player, the goal should be to lean on the pharma business while maintaining a healthy API base. Ultimately, the company wants to be a relevant innovative player, something that will bring true rewards as opposed to our production for other companies,” Schüberg believes.

 

Innovating small- to mid-cap style

Aiming to choose the right therapeutic areas, ones that fit Esteve’s capabilities, size and the needs of the market, the company selected CNS – a well-known disease area for Schüberg after his Lundbeck years – as well as oncology and ophthalmology

Asked about the reasoning behind that strategy, Staffan explained that “there are several reasons. First, we predict that both CNS and oncology are strong growth areas due to the unfortunate high unmet medical needs and our ability to make a difference. Second, both areas have plenty of niche indications where smaller specialty pharma players can make a difference; we cannot go after proton-pump inhibitors (PPIs), for example, because we do not have the right size. However, we can stay focused on specific needs in diseases like Alzheimer’s or Parkinson’s.”

“If you have the size of an Esteve, a small- to mid-size company, the only way you can do true innovative R&D is by sharing risk; this business is about risk management as much as anything else. Innovative products take a decade and cost about a billion dollars, not to mention the many failures along the way. We cannot wait that long and spend that amount hoping for the best; we need to take more shots on goal which entails the sharing of opportunities.”

“[Pharma] is a high-risk high-reward industry where you must go after innovation, taking chances on promising products that address unmet medical needs while knowing that a EUR 100 million investment can fail in phase III. You cannot go home and cry, you must get back up in the saddle,” Schüberg, who also serves on the board of Swedish rare disease player Sobi, says.

 

Five years to get there

Four years into his CEO debut, Schüberg believes that the pieces are now in place. “We are giving ourselves five years to grow again; the deciding factors will be our pipeline development and the inorganic opportunities we can come across. For me, the most important part has already been accomplished which is building a foundation from where to grow, divesting non-essential businesses and changing the entire internal structure; we are not a generics company anymore and know what we are good at.”


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