Spanish mid-cap Esteve is selling a 26 percent stake in the company to German private investment firm Lubea, a move it says will supply the necessary funds to further pursue its redefined company strategy while stepping up growth and allowing for additional international expansion.
Expansion: Products and Geographies
Esteve, a family-owned mid-cap founded in 1927 and headquartered in Barcelona, has always been firmly rooted in Spain. In recent years, however, the firm has looked to extend its footprint far beyond its home country’s borders. “Esteve was coming from a predominantly Spanish heritage and, over the past few years, has become an international player,” said CEO Staffan Schüberg in a PharmaBoardroom interview last year.
This investment will provide us with the necessary resources to accelerate our growth and expand our presence in international markets
Esteve CEO Staffan Schüberg
Since it redefined the company strategy in 2018, Esteve has been expanding its product portfolio while aggressively pursuing this international expansion. The Lubea investment, whose value has not been disclosed, is set to fuel these efforts while maintaining Grupo Esteve Lifesciences as the company’s majority shareholder. “This investment will provide us with the necessary resources to accelerate our growth and expand our presence in international markets,” Schüberg maintained in a company release about the deal.
The Spanish firm, with units in Spain, Portugal, Germany, France, Britain and Italy, has already made major strides towards delivering on its strategic realignment. Recent steps towards the company’s focus on specialty pharma and international growth include the divestiture of its generics division in 2019, the opening of new affiliates, and the acquisition of the German company Riemser in 2020.
“The acquisition of Riemser in Germany and its affiliates in UK and France, is about making Esteve more international, having our own products and being a better specialty pharma player,” claimed Schüberg. “This acquisition fulfils all of those ambitions; it makes us more international, gives us a proprietary business and a specialty pharma company. We are leveraging this new product portfolio to venture into new geographies.”
Therapeutic Focus Areas
The Central Nervous System (CNS) and oncology are two of the therapeutic areas on which Esteve has chosen to centre its efforts, aware of the fact that a mid-sized company could stand to make an impact in these areas. “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,” Schüberg said in 2022. “Both areas have plenty of niche indications where smaller specialty pharma players can make a difference.”
Pharma and API
Although Esteve has offloaded its generics arm, active pharmaceutical ingredient (API) manufacturing remains an important division for the company as it continues to supply substances to other pharma companies from its API sites in Spain, Mexico and China. “While we will try to grow both [of the company’s division’s], strategically, if we say that our goal is to become much more international, proprietary and a specialty pharma player, the goal should be to lean on the pharma business while maintaining a healthy API base,” Schüberg told PharmaBoardroom.
Profitable Growth
The firm’s 2022 results seem to indicate that Esteve is getting its transformation right. The company closed 2022 with an increase in net revenues of over 15 percent compared to 2021, reaching double-digit growth for the second year in a row with EUR 644 million in revenues. “The most important part has already been accomplished, which is building a foundation from which to grow, divesting non-essential businesses and changing the entire internal structure; we are not a generics company anymore and we know what we are good at,” Schüberg commented last year, speaking about the Spanish mid-cap’s focus on profitable growth.
Other significant recent milestones for Esteve were the launch of its first proprietary innovative product in the US, the acute pain treatment Seglentis, and a Parkinson’s disease product in Germany.
