Shire CEO Flemming Ornskov is hatching a few new stretch goals for R&D in 2018 — and beyond
SAN FRANCISCO — Shire stock $SHPG took a hit earlier this week as investors fretted over CEO Flemming Ornskov’s concession that the company isn’t going to meet a longterm revenue goal he set for himself, likely falling two or three billion dollars shy of the $20 billion envisioned for 2020.
That can happen, Ornskov tells me, when you set some stretch goals for yourself following a deal like the Baxalta buyout. You can push yourself and the company, push hard, but still get dinged by things like an unexpected generic attack or an upset win by a rival like Roche. Things happen in this business you can’t always predict.
But Ornskov — an intensely competitive exec still working on a makeover of Shire into the industry’s premier rare disease player — wasn’t in an apologetic frame of mind as he toured the scene in San Francisco. And he is still thinking about the near-term and long-term objectives — his new stretch goals, if you will — that will have to be met to live up to the mark he’s set for himself and the company.
He’s still planning to beat consensus in 2020, he tells analysts. He’s clearly pumped that Andreas Busch, a close colleague from Ornskov’s days at Bayer, has just stepped in to manage the pipeline as Shire executes a new step in the ongoing reorganization of R&D with a big move into Cambridge, MA. And the CEO has a multi-point improvement plan for the R&D side of the company as he divides the operation into two divisions — one for rare diseases and the other for neurosciences.
The way Ornskov sees it, the rare diseases pipeline looks great. “That part of the business has one of the most attractive pipelines we have ever had.”
It may be a little light on translational and early-stage programs, he reflects, and that’s where the company could be expected to focus with some new deals as they look to field new drugs. He’s not absolutely ruling out a Phase III rare disease deal if something comes along he can’t overlook, but it clearly isn’t likely.
But where Shire’s executive team can have the most immediate impact is on the neurosciences side of the company, dominated by some aging ADHD franchise drugs he’s suggested may be spun out at some point. This week, instead of a spinout, Ornskov promised to do more deals — licensing, partnering and bolt-ons — that would make the group attractive wherever it was, inside or outside Shire.
Says Ornskv: “I think for me it’s the same ultimate goal to build a business that is so strong that people will be begging me to spin it out because it would be so strong as a standalone.”
Or maybe they’ll be begging him to keep it.
JPMorgan is all about the year ahead. But I asked Ornskov, who’s been working on a makeover at Shire for the past 5 years, where the biggest opportunities are going to emerge a few years down the road.
If there’s one key R&D arena that Ornskov wants to concentrate more on over the long run, it’s gene therapy. After that, he’s paying very close attention to gene editing and how the company should position itself as new technologies like CRISPR begin to play out in human studies.
“We have to think what our business will be in 10 years,” he says. And that has him thinking about hemophilia A and B as well as gene therapies for the eye — a favorite research field of his.
Shire has a gene therapy program entering the clinic on hemophilia — ‘654’ — which he sees as a competitor to leading rivals from BioMarin and Roche. So there is a gene therapy team there they can build around, as the company is playing catchup on a critical front.
“We need to be in it so we can also figure out where the innovation is going,” he says.
Ornskov can get a bit testy when he’s called on something like falling short of a goal. And don’t ever expect him to apologize about his management style.
“Everybody has a different managerial style,” says the CEO. His involves setting stretch goals — “but I know if I have a stretch I will achieve more. Successful people set stretch goals.”
And they’re still coming.