Pharma Asks: Who Manages What At Advancing Service Providers?

By Louis Garguilo, Chief Editor, Outsourced Pharma

Antonio Magnelli, SVP, European Commercial Operations, Patheon, is new to his current role, and that is the point of this article: Providers of all stripes and sizes are expanding capacity and capabilities, developing or bringing in new technologies, merging with and acquiring each other, and doing IPOs. Like sharks, stop moving and they won’t survive.

But these companies and strategies can only be as successful as the key personnel inserted into shifting positions and responsibilities. Sponsors need to pay attention to the top as well as the immediate directors and project managers running their development and manufacturing projects.

Magnelli and I had to locate space for our discussion at Patheon’s busy open-style booth at CPhI Worldwide 2014 in France. A utility room to the side worked well, but Magnelli, well over six feet and heavy-set like a Chicago Bears linebacker—although seemingly too gentle for that role—practically filled the room himself.

Like Magnelli, a 14-year veteran of Patheon, often the first choice to fill new positions for service providers is to look internally. The other, which we will document in a subsequent installment from CPhI Worldide about Todd Nelson, a long-term Merck employee and WuXi’s newly hired VP of operations, is to recruit talent from outside, often from the ranks of pharma.

In either case, there is no role for mediocrity or stagnation for the modern-day pharma service provider.

With Magnelli, Patheon—and their biopharma customers—get a personage steeped in technologies such as lyophilization, a key service component for increasing biologics projects. They also get somebody who knows how Patheon wants its plants to run and treat customers, and who has experienced earlier transitions, both internal and market-wise.

A chemical engineer who started at Patheon in 2000 as head of the sterile department at their Monza, Italy, site, Magnelli worked his way through three senior positions there and a corporate posting before taking on his current role in November 2012.

“Now I am in charge of drug product service for all five sites here in Europe,” he says humbly. His office remains in Monza, but he travels “the majority of time to the sites and meetings with clients, including to the U.S. There are interactions with corporate in the U.S. and sometimes here. It is an interesting job, but for sure you have to cover a lot.”

The five sites are in the U.K., France, two in Italy, and the operations that came on board with the Banner Life Sciences acquisition earlier this year, in The Netherlands.

Integrating For Cultural—And Customer—Continuity

Even in our global, flat world, components of culture may play a role in hiring and promotional decisions, both from a corporate and regional aspect. Obviously, Patheon has selected a seasoned European and employee to oversee operations here.

I first ask Magnelli about the Banner Life Sciences facility integration. “It is completely integrated and performing well,” he says.

“We are a bit specialized in how we integrate. When you have a network and it is a key part of your strategy to have organic growth, you have to integrate the same culture, create the same experience and get the same training. To be part of the same family for the successful delivery of API to our customers. It is important that when clients arrive, either in facilities in the U.S. or in Europe, they don’t see a fundamental difference.”

“Okay,” he adds with a smile, “this is Europe. Here, we have what we might call normal cultural differences. It is important to have cultures of The Netherlands, the U.K., France, and Italy. It is our gain if we support and maintain the right cultural elements that come with the territory.”

“The main difference is language. Of course everybody is speaking English, but with a different accent,” he says and laughs, referring to his own very good and nicely flavored Italian-inflected version.

Managing Growth And Change

Magnelli sees a near even split between North America-based and European-based customers. He doesn’t feel there is a real regional component, and all the facilities have a global mix.  

The mix, though, is changing “from a biotechnology or biopharma point of view.” There is significant growth from U.S.-based biotechs, and Magnelli also mentions an uptick in biotech business from England.

And there is a difference in how customers approach Patheon. “We’ve learned that small pharma and biotechs require support for a wider range of services. They select you based on your expertise and ability to help them,” he says. “Large pharma can often be more capacity driven. In general, the choice is driven by various strategic aspects.”

As any business knows, the market and specific customers drive demand, and Magnelli highlights that capacity is also a key driver.

“Biologics is growing fast, and in Europe we have a capability that fits very well with that market, including lyophilization. Three of our five facilities are for injectable drugs, and the mix can be driven by specific capacity and capability.”

As if remembering some comments Jim Mullen, CEO of Patheon parent DPx Holdings B.V, made in an earlier interview, Magnelli says, “Okay, let me say it is part of our strategy to always maintain a certain capacity to permit us to continue to add work, because a site with 100% capacity is lucky but is dead in the same moment.”

Magnelli sees some differences between European customers and those from the U.S. “Not always, but at times Europeans are more price oriented. The U.S. seems more oriented to the right service and the right competence with the right API.”

As we wrap up our interview, I ask Magnelli about his focus for the next six months.

“My short-term role is to provide organic growth. Second, be ready for any possible challenge, again from an organic point of view,” he says.

“However, first of all we must continue to be focused on clients. When making acquisitions or new ventures, it can be difficult to stay focused on the customer’s business. We have built a strong reputation, and we need to maintain relationships. We will become bigger because we maintain good customer service. And I think getting direct client feedback is the best way to go.”

Regarding big pharma’s talking up strategic relationships, as Outsourced Pharma has been covering throughout 2014, I ask Magnelli if this is indeed happening in practice. He answers without missing a beat.

“With big pharma we have to be transparent. We have to see if they are looking for relationships, but what a relationship means from their point of view. If you are open to a clear discussion from the beginning, you see they have targets, we then have our targets, and we find a way to have a win-win situation.”

More and more for sponsors, the elevating or new leadership at their providers may influence those relationships. In the case of Magnelli, at least, they’ll have a known and experienced quantity.

(Editor’s Note: In part two from CPhI Worldwide 2014 on leadership at growing service providers, we’ll talk with one of WuXi’s newest executive hires, Todd Nelson, Ph.D., formerly of Merck.)