Healthy returns

The pharmaceutical business is the only business I know of where you go into all of your new projects knowing that most of them will fail," admits Robert Essner. "And yet you still do it."

For all the industry's pitfalls, Wyeth Pharmaceuticals shareholders will be glad that the multinational's CEO doesn't give in too easily. Under his tenure at the head of one of the world's largest drug companies, Essner has steered the US giant to revenues of over US$20bn - and established Wyeth as a leading developer of cutting-edge drugs used to treat patients around the globe.

This is Essner's first trip to the Middle East as CEO. It is also his last - he steps down to take the position of chairman of the board in January - yet he is insistent that future Wyeth CEOs will have good cause to spend more of their time in the region. "It is a part of our business that is growing very rapidly," he says. "We're very excited about the future, and as I'm going to stay on as chairman of the company for some time, I wanted to come here and see it for myself.

"What I have seen is a lot of extremely energetic people bringing in some of the brand new modern technology that we have," he continues. "I see a lot of optimism about the future, and I think over time this part of the world can grow by multiples for us. We expect to see good growth everywhere in the world - but this could clearly be one of the fastest growing parts for us."

Wyeth's worldwide growth is explosive. Net revenue increased 9% to US$5.6bn for Q3 2007, and 10% to US$16.6bn for the first nine months of 2007. Excluding the favourable impact of foreign exchange rates, worldwide revenues increased 6% for Q3 2007, and 7% for the first nine months of the year.

Closer to home, Wyeth has been in the region for nearly 50 years, spread widely across the GCC, Levant, and North Africa. Its blockbuster drug Prevnar - the first vaccine for infants against pneumococcal bacteria, a common cause of pneumonia and ear infections - has proved particularly popular in the region. The treatment, which has slashed pneumococcal infection rates among children by 97% since its debut, is currently mandatory in countries including the Dubai, Abu Dhabi, Kuwait, and Qatar.

However, it has not all been plane sailing for the ‘wonder drug'. Supply shortages have hampered Prevnar's roll-out across the region, and although Essner is now confident that those issues have been resolved, the delays did embarrass Wyeth at a time when every parent wanted their child vaccinated as a matter of urgency.

"When we were first launching the product we did have shortages, and for two reasons," says Essner. "One, the product is extraordinarily hard to make. Prevnar, as it is today, is seven different valent vaccines, so it works on seven different strains, seven different organisms.

"They have to be both manufactured individually, and then combined in a way that did not cause interactions between the various components in the vaccine, and that is not an easy thing to do," he continues.

"Over the years we've mastered how to do it very well and we've also increased our capacity dramatically now, so today we have adequate supplies of Prevnar for anybody who wants to use it."

Essner also admits that Wyeth simply failed to anticipate the level of demand for the new drug. The uptake was unprecedented, and the company just wasn't prepared for it.

"We thought it would take a little while for this vaccine to be adopted, but it was taken on very quickly by government systems," he points out. "In the US, for example, we had 95% of children getting Prevnar within a year."