- Shire's former oncology business has a new home, as current owner Servier officially opened its U.S. headquarters in Boston on Thursday.
- The French pharma bought the unit from Shire for $2.4 billion last April. That deal spurred the private company to create a U.S.-based subsidiary called Servier Pharmaceuticals that will act as its entry point to the largest drug market in the world.
- The U.S. unit has hired slightly more than 100 employees across R&D and commercial roles, and has plans to gradually double in size over the next five years.
Despite Servier's presence in more than 100 other countries, the French company had never entered the U.S. Its deal with Shire last year changed that, giving Servier an immediate commercial presence in the country.
The Boston office is still relatively small, given Servier's scale. The company employs 22,000 staff globally and earned roughly $4.7 billion in revenue last year, selling both branded and generic drugs.
Like the rest of the industry, Servier hopes to become a larger player in the fast-growing oncology market. The deal with Shire gave it rights to two older cancer drugs and a then-experimental, now-approved leukemia treatment called Asparlas (calaspargase pegol).
Servier tapped David Lee, who led Shire's oncology divestment for the Irish pharma, to lead the new subsidiary. The CEO previously was global business head for genetic diseases and oncology at Shire.
"These opportunities are rare in this industry," Lee said in an interview with BioPharma Dive, noting how almost no company of Servier's size lacks a U.S. presence.
Lee also found Servier's corporate structure attractive. In the 1970s, the private company's founder Jacques Servier devised a succession strategy to keep the company independent.
By that plan, Servier is governed by a nonprofit foundation, the Servier International Research Foundation, which owns 52% of the company. French nonprofit organizations own the other 48%. The ownership arrangement is intended to insulate Servier from shareholder pressure, and from paying dividends.
"We are set up for the future," Lee said. "There is no way you can take over Servier because it is self-funded and self-governed. What that means is we can go for the long term."
Historically, the French pharma focused on emerging markets like China, Russia and Brazil instead of the U.S. China is still its best-selling market, Lee said, with Servier being there for 40 years.
Servier never broke into the U.S. because it wasn't sure how best to enter, Lee said. The Shire deal offered a direct path.
While Servier considered multiple East Coast options for its U.S. headquarters, it perhaps unsurprisingly wound up choosing Boston, with its density of life sciences activity.
Lee hopes to double the size of the business in the next five years, measured by revenue and pipeline prospects as well as headcount.
Cancer drugs will be the short-term priority, but other areas are possible. Servier has programs in neuropsychiatric, inflammatory, and cardiovascular diseases as well as diabetes.
"I think we'd be open to other therapeutic areas within those five, but to be honest, as we're rapidly building and growing, I'd like us to focus on oncology," Lee said.
Servier will have a long way to go to realize its ambitions.
Between 2017 to 2018, cancer drugs made up 6% of Servier's overall revenue. One of the marketed products it acquired from Shire is old, having won initial approval in the mid-1990s, and the other, Onivyde (irinotecan liposomal formulation) is a new formulation of a previously approved drug. Altogether, the Shire cancer portfolio earned $262 million in sales in 2017.
Further, Servier only holds ex-U.S. rights to Onivyde per deal terms with Shire.
Servier currently lists 16 cancer programs in its pipeline, almost all of which are in Phase 1.