Interview >> Ernesto Petroselli, President of CordenPharma > CEO Europe Magazine, June 2016

May 20, 2016

A Healthy Outlook

The pharmaceutical industry is booming, and global giant CordenPharma is well positioned to share in the spoils with its offering of a one-stop supply shop.


President of CordenPharma International, Ernesto Petroselli, has been in the pharmaceutical industry for four decades; a long time to hone skills and develop an in-depth knowledge of the global pharma market. In fact, it’s fair to say that Ernesto is an expert.

He joined CordenPharma in 2012 as managing director of their CordenPharma Latina facilty and was then promoted to president of the whole group the following year. Casting his expert eye on the industry, Ernesto spotted an opportunity for CordenPharma to capitalise on the rapidly-growing global pharmaceutical market.
 
“The pharma contract manufacturing market is very crowded, complex, and is growing all over the world. It’s quite segmented—most competitors are quite small and only offer a partial service—so I could see an opportunity for us to position ourselves slightly differently to the bulk of the companies, with a new value proposition,” he says.
 
As a result, CordenPharma is a Contract Development and Manufacturing Organisation (CDMO) that provides specialised technologies for the development and manufacturing of sterile, oral, and highly potent oncology, and antibiotic pharmaceutical drug products, as well as their Active Pharmaceutical Ingredients (APIs) and associated global supply chain and packaging services. CordenPharma is especially suited for specialised niche market segments like peptides, lipids, and carbohydrates (often used for oligonucleotides), where they play a key role in developing both the APIs and drug products. Basically, it’s a one-stop shop.
 
“We built our strategy around three main pillars,” Ernesto explains. “One is moving from facility-based needs to what we call technology platform-based needs. Our technology platforms are a slightly different concept—they cross more than one manufacturing site to provide an integrated combination of capabilities. The concept is something we have developed that’s been well-received by the market and has positioned us as slightly different from the usual concept of offering capabilities through manufacturing sites.
 
“The second point, that is increasingly important, is the concept of one-stop shopping. We are in a unique position to be a full-service supplier in the value chain, so the idea is to target companies that are either not very strong in supply chain, lacking a certain part of the supply chain, or don’t have a supply chain at all.
 
For example, there are many companies—especially in the US—that only have research and sales,
or only research and development. We believe that we are in a unique position in certain technology platforms, like antibiotics, highly potent oncology, and peptides, to provide end-to-end solutions. This is something that not many companies can offer, so it gives us diversification and a unique value proposition.
 
“The third pillar is that we build on that foundation—we build a completely new marketing and sales organisation to support the business. We are studying the market and targeting our customers in order to build up the business, and then allocating key account managers accordingly. Each customer is assigned one key account person who will see to all of their needs—so a personalised service,” Ernesto says.

“Each client has their own approach to business—to quality and processes. Some companies say, ‘This is how I work, you have to adapt to my system.’ The CordenPharma way is a flexible one, in that we try
to adapt our service to meet the customer’s needs—while obviously still maintaining our identity and trying to offer some added value—but the last word is always the client’s.”
 
His strategy appears to be working; CordenPharma has been growing rapidly in both the US and Europe, and this year it has expanded into Japan. “We will continue to grow with agents in India, Brazil, South America, Russia, and Turkey so that we provide truly global coverage,” Ernesto says.
 
Another key part of his strategy to provide end-to-end solutions has been through acquisitions, as CordenPharma invests heavily in order to expand its offerings. In the past eight years, it has acquired 10 businesses in Europe and two more in the US. This has meant not only rapid growth for the business, and a broadening of its capabilities, but it has also gained access to an instant customer base. Sales are going well, even better than anticipated. Although for Ernesto, success is not necessarily defined by the bottom line.
 
“I am a big fan of having a few basic rules, and the first one is that whatever we do, every day, every moment, we need to always have a clear link between strategy, tactics, and execution. If we execute well but we don’t have the right strategy, it won’t work. If we have the right strategy but we don’t have the right tactics and execution, it won’t work. And when we are able, through clear and well-designed processes, to link this to the aspects of the business, it brings success.

“If we have the people to grow, support our customers to grow, build good processes, respect diversity, and never sacrifice quality—it’s a simple recipe made up of a lot of elements—then success is guaranteed. I never talk about money. For me money is the outcome of all of these things. “I think we need to talk more about the core of the industry, which is the patients and patients’ needs. If we find the right balance between efficiency and costs we are better able to help our customers reach the patients. Business people talk too much about income, share value, revenue, cash, and equity. This is not the end goal—I think we need to be more focused on the patients and their needs.”

The future is certainly looking good for CordenPharma as the industry is still on the up. A report released by Thomson Reuters in 2015 predicts that by 2018 the global pharmaceutical market will be worth US$1.3 trillion. “The pharmaceutical industry is in a unique position,” Ernesto says. “It is looking, to a certain extent, like a kind of paradise. It’s growing rapidly, and it is a huge market—in 2014 it became a US$1 trillion market. In this business, the sub-segment of CDMO is growing even faster because of several things including investments, optimisations and capabilities. If anything, the only downside to a market that is growing in value, and growing in importance, is the risk of complacency.” 

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