Summary of February 18th Dinner

We thank François Gaudement for this text, and of course our speakers Jérémie Urbain (Serb) and Patrice and Sabine Débregeas who were kind enough to explain the business case of their respective companies, innovative French-based pharmaceutical companies.

Minutes of meeting, 18th of February 2008

Speaker 1 : Jérémie Urbain, CEO of Laboratoire Serb

Jérémie studied economics at Paris Dauphine before he joined Credit Lyonnais (now LCL) in the late 90s. His parents were pharmacists and owned a small drug retail business with few shops. His father sold the last shop in 2000.
In parallel Jeremie’s parents were managing a small pharma company, called Laboratoire Serb that was founded in 1983 and that was distributing in vivo dying products imported from the US.
In 2000 an unfortunate incident pushed Jeremie to replace his father at the head of Laboratoire Serb. During a transition period of 18 months he took charge of the operations. Eventually he became CEO of organization in 2001

Key figures
-    Turnover: 1m in 2000, 15m in 2008. Earnings in 2007: 2,5m€
-    15 people, incl. 7 pharmacists

Key strategic orientations since 2001
-    Outsourcing of all manufacturing activities.
-    Focus on R&D and marketing
-    External growth through acquisition of molecules sold by big institutions like Inserm, Institut Pasteur, CNRS.
-    Reengineering of the products portfolio. From 33 to 25 max molecules; stop of molecules of turnover below 200k€.
-    In addition of the historical products (injectable dying colorants), acquisition of other niches products in ophthalmology and urgency medicine (against poisoning, intoxications, anti-venom). Some of them proved to be very successful after September 11; and opportunistic acquisition of anti epileptic product

From a management perspective, employees reckon to be motivated working for such an SME because tasks are very diverse; opportunity to touch on every aspects of the business. However it is often difficult to retain people after circa 5 years when they look for positions with greater responsibilities in larger organization

Jérémie likes to say that this success story is all about luck. But as Pasteur once said “chance favors the prepared mind!”.

Speaker 2: Patrice and Sabine Debregeas

Patrice (MBA Wharton) has a long career in the pharmaceutical industry. Built “SI Pharm” (?), whose activities have been focused on managing licenses and B2B business. Patrice sold this company to Astorg when it reached a size of circa 800 people across Europe, US, China and India
He reinvested the money to found D&A, which he managed with his daughter Sabine (MBA ISA). Big investments have been recently made to acquire from Johnson & Johnson a 7000m2 site, where 15 people will soon develop new products
International exposure since the very beginning

Activities
-    Galienic enhancement of well-known active ingredients
-   Example: enhanced form of subutex, which enables injection without pain
-    Focus on wide-spread addictions
-    Development in parallel (simultaneous) in Europe and the US
-    Manufacturing is outsourced
-    In-house marketing activities

Financials
-    Missed IPO scheduled in 2001. Thus business fully owned by family
-    Government helps are often limited and too time-consuming in follow-up to worth the effort filing. Other options: OSEO, CRITT Chimie but limited
-    On the other hand investments funds are nowadays willing to take more risks than they used to.
-    20 m cash available today at D&A for further investments

Legal environment
Patrice argues that it is actually easier today than it was to deal with legal constraints. Indeed even if laws rules are complex, information is easily and quickly available

Management
-    Quite easy to motivate R&D and sales staff with challenging and exciting projects.
-    Financial rewards possible as well; 2 managers took the opportunity to create a new subsidiary for 49% of the subsidiary’s equity
-    Much harder to retain regulatory affairs and quality functions that are quickly aspiring to take more responsibility in