Jean Stephenne, the quiet, unassuming president of GSK Biologicals, has made a career out of challenging convention. Through a series of bold bets over three decades, Stéphenne transformed the vaccine subsidiary of GlaxoSmithKline PLC (GSK ), based in Rixensart, Belgium, from a tiny company with one product and $3 million in revenues into a $2 billion behemoth. Today, gsk Bio, known internally as Fortress Rixensart for its independent ways, is the world's biggest vaccine company, with 20 promising new ones under development.
Stéphenne is embarking on a bold new approach to launching vaccines. He calls it the south-first strategy -- meaning that he is going to offer vaccines in poor Southern Hemisphere nations to start. Standard Big Pharma practice is to start in the high-income and thus high-profit developed world, then gradually move south. GSK Bio's initial south-first test will be of a new vaccine for rotavirus, a pernicious parasite that causes acute gastroenteritis and infects all children before the age of five. While a bad bout in the U.S. or Europe usually means hospitalization, in poorer countries it often results in death. Rotavirus kills more than 800,000 children each year.
Stéphenne's plan is to roll out the vaccine first in Latin America and Asia in 2005 before filing for approval in Europe a year later. Clinical trials, which are expected to cost GSK Bio $300 million, are going on in Latin America and Asia. Stéphenne has already submitted the vaccine for approval in Mexico, and a decision is expected by the end of this year. "By launching the vaccine in developing markets first, it enables us to go where the medical need is greatest," he says. Stéphenne is saving the lucrative U.S. market for last, as regulators are expected to demand huge amounts of clinical data before granting approval.
Certainly Stéphenne's south-first strategy is a far cry from the industry's typical modus operandi. But the 54-year-old CEO is hardly typical. When he joined GSK Bio in 1974, the bulk of its $3 million in sales came from a 20-year-old oral polio vaccine. By the time he was tapped as head of R&D a decade later, many of GSK's major rivals had bailed out of vaccines in the face of increased liability and stringent price controls. Meanwhile, GSK Bio had to weather the two mergers that created GlaxoSmithKline, events that prompted top management to shop the vaccine lab around. "We were for sale many times," Stéphenne recalls with a chuckle. Yet Stéphenne managed to persuade the parent company during each of the two mergers that vaccines would be an important preventive weapon against infectious disease in the decades ahead.
No doubt GlaxoSmithKline CEO Jean-Pierre Garnier is grateful for Stéphenne's powers of persuasion. Today, GSK Bio controls 25% of the $8 billion global vaccine market. And since analysts expect that a number of GSK Bio's new vaccines will become blockbusters, GSK Bio is set to become an increasingly important part of GlaxoSmithKline's business. It currently makes up 6% of GlaxoSmithKline's pharmaceutical sales and profits.
Stéphenne hopes the innovative strategy being pioneered with rotavirus can be employed in coming years to launch other novel vaccines for diseases that disproportionately affect poorer countries. GSK Bio is the only company with a vaccine in the clinic for malaria. And it is testing a vaccine for tuberculosis, the cause of more than two million deaths each year. It's also working on vaccines for cervical cancer, herpes, new strains of meningitis, and lung cancer and melanoma. "The model we have developed is to be a vaccine maker for the world," Stéphenne says. If even a handful of the innovative vaccines in GSK Bio's pipeline make it to market, much of the credit will belong to Stéphenne's bold vision and his tenacity in seeing it through.