2021 marks Grünenthal's 75th anniversary: How has the company changed since its inception?
It has evolved a lot, of course. Grünenthal has transformed into a specialist in pain management. We have developed into an international company with commercial organizations across Europe, Latin America and the US. Grünenthal covers the entire value chain, from R&D through to commercial and manufacturing capabilities. And we have grown to become a leader in the therapeutic area of pain.
We have ambitious plans to use our strong position today as a springboard to even greater success in the future.
You have been Grünenthal's CEO since 2016: What have been the most significant milestones in your time?
Our company has achieved some exciting progress over the last five years. Two years ago, we realigned our R&D strategy that now focuses on four indications we have identified based on a combination of high unmet medical need for large patient populations, a profound understanding of the underlying pathophysiology and, thus, a high technical and scientific feasibility. We pursue these indications with a lean operating model that includes all critical capabilities such as target identification and validation. Our scientists reach out to external partners to establish collaborative projects that push science to the next level. Our Innovation Hub in Boston is one very tangible example of this. In greater Boston, the world's largest biotech hotspot, our teams collaborate with leading researchers, universities and companies from across the global scientific community.
Grünenthal also established its own commercial presence in the US, a big milestone for our growth strategy. On top of this, we have invested more than US$ 1.7 billion in acquisitions to add established brands to our portfolio. The additional revenue created by these acquisitions strengthens our financial performance and allows for targeted investments in R&D and further acquisitions. As a result, we achieved the company's best-ever financial performance in 2019. We more than doubled the EBITDA since 2016 and we improved our cash flow which enables us to reinvest in our future growth through M&A but also R&D investments. Despite the Covid-19 pandemic, our business is in a stable financial position with a diversified portfolio of innovative and established brands.
Can you tell us more about Grünenthal's entry into the US market?
It was important for Grünenthal to begin operating its own commercial footprint by acquiring Averitas Pharma and the US rights to Qutenza, a non-opioid pain treatment.
Building on this success, we are currently preparing a pivotal Phase III study in post-surgical neuropathic pain (PSNP) to further expand the label of Qutenza in the United States. PSNP is a complication of surgery that affects approx. 3.3 million patients per year in the US – and an FDA approval would give these patients access to a much-needed, non-systemic, non-opioid treatment option.
You mentioned your strategy of acquisitions: What deals did this involve?
Acquisitions are a crucial part of our growth strategy. We have been pursuing deals to expand our portfolio of established brands, boost our profitability and enable us to keep investing in R&D. In recent years, we have acquired the European rights to Nexium and the global (ex-US and Japan) rights to Vimovo, as well as the global rights to Qutenza and the global (ex Japan) rights to Zomig, as well as the European rights (ex Spain and the UK) to Crestor and its associated brands.
And just this month, we acquired Mestex AG, a Swiss biotech company that has developed an innovative investigational medicine for the intra-articular treatment of pain associated with osteoarthritis of the knee. It is a non-opioid treatment option with a well-validated mechanism of action that may positively impact millions of patients' lives. We will progress this program into global Phase III development still in 2021 and aim to meet the approval requirements in the EU, the US, Japan and China.
You can see, we diligently implement our growth strategy and are excited about completing more deals in the future.
Finally, everybody's talking about ESG and social responsibility. Where does Grünenthal stand on these topics?
Our commitment to conducting business responsibly is a central element of our strategy and culture. We aspire to create a positive impact for society – with and beyond our core business.
We are now integrating responsibility even more closely into our core strategy by focusing on four pillars: educating about pain treatment and responsible use of opioids, ensuring access to medicines, innovating pain management, and raising awareness about pain as a disease in its own right.
Grünenthal has also significantly improved its company culture. By creating unique career paths, we have been able to grow internal talent and attract top international candidates.
I am very proud of the progress that we have made. And it is not just me saying it: This April, a global ESG rating agency attributed an ESG risk rating to Grünenthal that puts us in the top five percent of the global pharmaceuticals subindustry. Grünenthal was categorized as medium risk with strong management of our ESG risks.
You can see – we have transformed Grünenthal over the past years, and I am extremely excited for what's ahead for our company, our shareholders and partners. And ultimately the patients we work for towards our vision of a world free of pain.