there is a high unmet need, and there are very few companies focused in this area—and Shire does. Each product [given the small market size for rare-disease drugs] is potentially a $300 million to $500 million product. Therefore, you do need a few products in order to make the business sustainable. But the cost of development is somewhat less than a traditional pharmaceutical, because the number of patients you can study it in is so small.
X: Would Shire HGT be profitable as an independent company?
Gregoire: HGT has been profitable as of 2007. So we’ve passed that profitability mark. In 2007, HGT revenues were about 15 percent of overall Shire revenue. From a growth perspective, it’s anticipated that in five years to 10 years it would be 30 percent and growing. Clearly, Shire has made a huge investment in HGT and sees it very much as the R&D arm that is very strategic to the company.
X: Do you think workers at larger biotechs like HGT need to be more entrepreneurial?
Gregoire: I think workers in biotech and at big biotechs should be entrepreneurial. We intend to reinvest a lot of our money in R&D. So innovation matters a lot, and how you behave in terms of decision-making, being nimble, and developing leaders that have general management capabilities is important. We generally have [fewer types of employees] than in pharmaceuticals, so we work less in silos, and working less in silos gives management more opportunities to develop. Especially in a rare disease business, the volume of what we do is low—each patient counts. Each new patient added to the patients treated matters enormously to the business. So we tend to follow things very closely as a group, so we have no choice but to remain close in our management of things and entrepreneurial.
X: What is the status of the Lexington expansion?
Gregoire: If you came here—and I’m here now—you would see that we’ve moved the research group [from Cambridge] into Building 125, a building that already existed. At 300 Patriot Way, which is the building I’m sitting in, it is also completely full with people from R&D and program management. We’ve built in this building an additional facility for the cell-culture manufacturing of Elaprase. Construction is finished on that, and now we’re validating the plant in order to begin manufacturing the drug here early next year. We’ve moved our commercial organization [to 500 Patriot Way]. In total, we have about 380 employees here in Lexington. We also have our large-scale manufacturing facility under construction next the 300 Patriot Way. The Lexington site is expected to be fully developed by 2011.
