Attention to detail is critical in the world of pharmaceuticals. Little wonder then that Victor Grifols Roura makes a point of wearing a tie featuring shamrock for the formal opening of his company's $100 million plant in Dublin's Grange Castle.
Grifols is the third generation of his family to lead the company, one of the three major global players in the business of extracting proteins from blood plasma and using them to develop medicines.
The company was founded in the wake of the Spanish Civil War in 1940 by his grandfather, who developed what is now the industry standard method of extracting plasma proteins from blood. It survived the uncertainties of Franco’s rule and the reshaping of Europe to become one of the handful of Spanish multinational businesses.
Of its three divisions, bioscience – the plasma products business – accounts for about 75 per cent of the group’s €3.35 billion revenues last year. Plasma is the liquid component of human blood. Approximately 90 per cent of plasma consists of water and about 7 per cent of the remainder consists of essential human proteins and antibodies called plasma proteins, which help maintain vital body functions.
Ireland came on the radar of the Barcelona-headquartered group after the $4 billion acquisition in 2011 of Talecris Biotherapeutics. That gave Grifols three bioscience facilities – Barcelona, Los Angeles and Clayton, North Carolina.
While each produced the same product line, legacy equipment in the Talecris plant in North Carolina meant difference in packaging. In addition, labelling product for 100 different markets from three plants was causing problems with managing inventory of life-saving product.
“If we have, for instance, 100,000 vials of a certain product sitting in inventory ready to be shipped to China next month but then we receive an order from Mexico, we might not have supplies ready,” says Grifols. “Because of individual labelling requirements, we cannot ship product labelled for China to Mexico even though it is the same.
“So we said what if we have a central warehouse some place, with nude vials and when we receive the order, we pick up, label and send in five to 10 days and the management of the inventory will be much better.”
Location
The question then became where to site such a plant. Spain and the US were obvious but the US regulator, the FDA, would have issues with product coming in from Spain for re-export, while the lack of English as a first language counted against Barcelona.
“English was for us, not mandatory, but if possible, it was important,” says Grifols. “So we came here and looked and Ireland has other advantages – for instance immigration, as you can clear here for the US. Everyone speaks English, it is a European country and taxwise, it is also an interesting country, so in the end we decided to do it here.”
The Irish plant will employ 140 people when it is fully up and running next year. As a central warehouse and distribution hub for all the group plasma and plasma product outside the US and Spain, it expects to process about 10 million vials of medication next year, an amount that is likely to double by 2026.
But it is more than just a warehousing, packing and labelling business. Grange Castle will also be responsible for final quality control.
Grifols owns and operates its own network of 150 plasma donor centres in the US, drawing more than 25,000 plasma donations daily. Donors must undergo a yearly medical examination along with routine tests at each donation. Grifols says it does not use plasma from sporadic donors.
“The product we make in LA, in Barcelona and in Clayton, of course they have factory release, but they require final release – meaning this product is okay to go to market, any market – and this will be issued in Ireland.
“That is why we have a big lab here. So not only is it a warehouse but it is a warehouse that also has the responsibility for the final quality control.”
The Grange Castle facility will also house the Grifols group’s treasury function, a move that has attracted some negative comment both in Spain, where an election looms, and the US at a time when the focus is on corporate taxation on multinationals. The scale of Grifols’s ambition and the complexity of running a major pharma business across several continents are clear from the 28 seats in the pristine boardroom of the Dublin facility. The company sells in 100 countries worldwide, with a direct physical presence in 30.
While, under Victor Grifols Roura’s leadership, it has grown rapidly through acquisition, the focus now is on organic growth through R&D.
"Acquisition for us is impossible now because, when we made the last acquisition, we had to undergo the scrutiny of the US Federal Trade Commission. The process to finally get clearance took us one year but that is the limit. We cannot buy any other company in any place because we would have to go to the FTC and they would not approve."
The situation is, he says, the same for his two main rivals – Baxalta and CSL.
Organic growth
“So now it has to be only organic growth. I prefer to grow organically. It is more romantic, more satisfying. When I started working in 1974, it was considered plasma had 30 proteins. Ten years later people said ‘no, plasma has 300 proteins’. Today people estimate that plasma has more than 3,000 proteins,” says Grifols.
“If these proteins are in our plasma, there must be a reason for it, so one area of our R&D is to discover what these proteins are doing there and what happens if you lose or you do not have these proteins. Maybe if you do not have the protein, you lose your hair or whatever. So we are excited because our R&D scope is infinite. I am very excited. More excited that 10 years ago.”
And it’s not just new proteins. Long-discovered proteins such as albumin, which were originally seen as having one or two uses, are now seen as offering potential in many more areas. “One of our big projects is Alzheimer’s and we have found that albumin maybe has some implication on Alzheimer’s which is a huge opportunity.”
Grifols published intermediate data last week on a clinical trial that confirms the safety of using albumin and plasma exchange in patients with mild to moderate Alzheimer’s disease. It expects to report full results on its efficacy as a treatment in 2017.
Globalisation – a word he doesn’t like – and climate change also offer opportunities with people contracting new diseases all the time, such as Ebola, where Grifols is working on developing immunoglobulin from survivors to treat patients and protect medical staff working with the disease.
Grifols is a public company, listed on Madrid’s Ibex and on Nasdaq, in which the Grifols family and related parties own about 40 per cent of the shares. Yet it is also a family company with the peculiar dynamic that involves.
“Internally, the employees, for whatever reason, still want to keep this concept of family-owned, even in our US plants,” says Grifols. “There’s nothing wrong with this except that I ask my people not to make mistakes because we would have to have a recall and my family name is on the box.”
On the issue of drug prices, Grifols has little to say. He is more interested in an even more fundamental concept, what he calls the “obsession with extending life expectancy”. It’s not something you expect to hear from someone who makes their money from pharmaceuticals.
Life expectancy
“What is the reason to extend life expectancy if, at the end of the life, we cannot guarantee a good quality [of life],” he asks. “What is the point? If you offer me the chance to live 120 years but for the last 20 years I have Alzheimer’s, I would say no thank you – not because of me because I will not be there but for my family, my kids. I think it is something that the countries and government have to start thinking about.”
For Ireland though he is upbeat.
At the formal opening of the Grange Castle site, Grifols told the assembled dignitaries that Ireland was a “nice country”.
“Everything is fine but you have two problems,” he told them. “First, you drive on the wrong side of the road and the second is the weather. If you solve these problems, probably this would be the best country in Europe to live.”
Joking aside, he has been astonished at the impact of the decision to invest here in ways he never considered.
“I think people do not appreciate it but there are so many Irish people in the world, and not just the English-speaking world. And when you say you are investing in Ireland, they like it and, automatically, they became better customers or allies.
“They feel Irish even though they are second or third generation and they are proud of Ireland, and if you invest in Ireland these guys are ready to help you. If Greece or Spain, yes well . . . in Ireland, ‘ah let’s sit down, let’s talk’.”
“It is a value we have discovered in the last year and every day I am more surprised. But it is a real value. Imagine that Grifols invested the same thing but in Poland, not here. We would not have this value. Poland could be an interesting country, maybe as good as here but they do not have this diaspora.”
As he looks to bed down the latest $100 million investment, does he see potential for further expansion? “Yes, sure. I cannot tell you yet but we will.”
CV
Name: Victor Grifols Roura
Age: 65
Position: Chief executive and president
Family: Three sons and two granddaughters
Lives: he divides his time between Barcelona and the United States
Something you might expect: As head of a pharma multinational, he has visited most of the countries in the world
Something that might surprise: he holds a pilot’s licence for light aircraft.
