Business has been on Nikolaj Sørensen’s mind from an early age. Today, his leadership skills ranks high in employee surveys and he has been on a journey not many Nordic life science CEOs have experienced, taking a small company from Sweden to the big U.S. market and tackling the big problem of opioid addiction.
During annual Nordic Life Science Days conference in September 2018, when all eyes were on Stockholm and our life science industry, Nikolaj Sørensen’s phone rang. It was his colleague telling him that their company, Orexo, had won a patent battle that had been going on for over four years and cost over 200 million SEK. They had finally won their appeal against Actavis on the Zubsolv® (a buprenorphine/naloxone sublingual formulation for treatment of opioid dependence) patent for the U.S. market.
In May 2014 Actavis advised Orexo that it filed an Abbreviated New Drug Application with the FDA seeking approval to market a generic version of Zubsolv before the expiration of patents that cover the product and its method of use. Orexo commenced a patent litigation and the Court later conducted a bench trial and held that one of the patents was valid and infringed by Actavis’ proposed generic product, while the other patent was declared invalid. Orexo appealed to the Federal Circuit and they found Orexo’s long term Zubsolv patent to be valid, and reversed the invalidity decision previously rendered by the District Court of Delaware in November 2016. The Judge said Orexo’s patent provided a significant improvement for treating opioid addiction and that its novel formulation allowed patients to reduce dosages and lower dependency.
“This battle has been like a wet blanket over us for so long and winning this has been an ambition and vision for me since I started.”
”It was very emotional. This battle has been like a wet blanket over us for so long and winning this has been an ambition and vision for me since I started,” said Nikolaj when I spoke to him about a month later. He also described his and the board’s inability to fully focus on developing new projects during these years. “Our R&D has been suffering, and it has been a stopper on our business development and also on M&A opportunities.”
No other Swedish life science company has in modern time won a litigation like this, he adds. “So I actually almost hope that others will share this experience, because that means they have taken a risk and started commercializing their operations. I also hope that they are prepared when that day comes.”
Sørensen advises that from the minute you have an idea, outline a strategy and communicate it, both internally and externally, using a correct language and a formal tone, even if it is just in an e-mail with a colleague. It helps when a lawyer goes through your documentation, whatever it is.
The much longed for decision has now confirmed Orexo’s IP protection for Zubsolv until 2032, and enabled the company to fully focus of growing and expanding its commercial platform. Since the win, the company’s share price has increased from 35 to 65 SEK.
All the way to market
Orexo was founded in 1995 by Thomas Lundqvist, Anders Pettersson and Christer Nyström, with the goal to develop improved pharmaceuticals by optimizing properties of well-documented substances in combination with the company’s own drug delivery technologies. Five years later the first product was registered, Diabact UBT, a breath test for diagnosing helicobacter pylori. Later, Orexo’s subsidiary Kibion was divested and Diabact now belongs to them.
In 2003 the company initiated several development projects and in 2005 it became listed on the Nasdaq Stockholm stock exchange in anticipation of the launch of Abstral and Edluar (both based on the company’s sublingual tablet formulation, for cancer pain and short term insomnia respectively) in the USA and Europe by partners. In 2007 the company acquired Biolipox to broaden its business model to include the development of traditional new chemical entities (NCEs). Biolipox’s lead project was later acquired by AstraZeneca.
In 2013 Orexo established a commercial subsidiary in the U.S. and launched Zubsolv just ten weeks after the FDA approval. The company is today well positioned on the U.S. market and has preferred positions on some of the largest public and commercial U.S. payers’ formulary lists. After four years on the U.S. market Zubsolv sales are more than 480 million SEK. The company is entering its third year as profitable. Major shareholders are Novo Holdings A/S and HealthCap, and the company currently employs 137 people. It also recently decided to internalize the contract field force in the U.S. and has been able to retain R&D activities in Uppsala, Sweden. Nordea Markets estimate the elevated market share (+1 pp) due to improved market access will yield additional net sales of approximately USD 0.6 billion for 2018-2023.
”When I started we were not remotely close to being profitable and I am proud of the fact that we, as almost the only Swedish pharmaceutical company to do so, have been able to commercialize our product on the U.S. market,” says Nikolaj, and he outlines two factors behind the success.
“The first is our focus on re-formulation. Our early stage biology risk has been less when compared to other companies. Another key factor is our strong culture. We have had a clear focus on taking products all the way to the market from the start, not just focusing on the next development steps. We also have regulatory experience and we know what to expect from the FDA and the EMA. A lot of companies underestimate the complexity of the journey and they only target phases I and II.”
Nikolaj sees this as a problem in general in the Swedish life science industry, that we are poorly positioned when it comes to the later stages and commercialization.
“We need people who are willing to take a risk and invest in later stages.”
“From a science perspective we have a strong background that has generated quite sophisticated biotech companies, and that is impressive. But from a society perspective we need to have companies in the actual commercial stages. We need people who are willing to take a risk and invest in later stages. The people investing also need to feel that “if this succeeds I will get a decent return” and that is also an issue of taxation,” he says.
His home country, Denmark has done better at growing and maintaining large life science companies. That is perhaps due to the fact that these companies are controlled by very large foundations, which is a very effective way to ensure that they do not leave the country, believes Nikolaj. In addition there is some form of tax relief.
“When I was a student Sweden was considered to be one of the very interesting life science nations, but unfortunately I do not think Sweden is on that list anymore.”
“Denmark’s history of very long-term investors has benefited the pharma and biotech industry, where there are long development times. Novo Nordisk has been the engine and the country has been blessed with large companies that are tied to the country. From a society perspective, Sweden has lost compared to Denmark. When I was a student Sweden was considered to be one of the very interesting life science nations, but unfortunately I do not think Sweden is on that list anymore,” he adds.
A suit and a tie
When speaking to Nikolaj I can sense his passion for business and business strategies and it comes as no surprise that his first “job” was as CEO of his primary school during an annual business week. He remembers proudly putting on his father’s old suit and big 80s tie and taking on his new role with great enthusiasm. As the oldest sibling of three he says that he and his siblings’ choice of careers has been quite stereotypical. The middle sister – the diplomat – is a psychologist and the youngest brother – the creative one – is a web developer, and as the oldest, Nikolaj’s target was business.
Although, he could have had a focus on life sciences early one. He grew up in Gentofte, north of Copenhagen, just around the corner from Denmark’s first insulin factory, Nordisk Insulinfabrik.
“If the wind came from the east you could feel the particular smell from the insulin.”
“If the wind came from the east you could feel the particular smell from the insulin. I also worked there as a teenager, I guess my small hands were suitable for packaging,” he says and smiles.
But his closeness to the country’s life science pride, with his father being a medical professor and his mother being a nurse did not change his career target.
Nikolaj started at the Copenhagen Business School. When finishing his Bachelor’s degree at Glasgow University he met his wife to be and when she needed to be in Stockholm for her work he ended up finishing his studies at the Stockholm School of Economics. He began working as a consultant and later as a project leader at the Boston Consulting Group (BCG).
“It was an optimal choice for me, since I got to be exposed to multiple different industries and issues, and I learnt about cost-efficient operations, M&A strategies and I saw real life examples of what we had studied at school. It was a strong learning process.”
His final years at BCG also involved more and more life science projects and he started to become specialized in the field. For example, he was part of the merge of Pfizer and Pharmacia in the Nordics.
Proud of where you work
All is not easy running a business, however, and during his career Nikolaj has had to take a lot of difficult decisions. In late autumn 2008 he became the President of Pfizer AB and during his time there the company experienced several reorganizations and redundancies.
“The biggest key factor as a leader in these situations is that you quickly need to establish a common goal and help everyone see why the changes were made, and what the next step is,” he says. “I take some pride in having created, both at Pfizer and Orexo, an engagement that is more positive than before the reorganization.”
He also emphasizes the importance of being proud of where you work, and the field of life sciences is very rewarding in that sense.
“I can’t imagine any industry which provides the same level of pride as life science and health care. With this is mind I can’t stop being perplexed with the impression of lack of engagement I, as an outsider, get when I listen to people working at the largest healthcare investment in Sweden in modern times, Nya Karolinska Hospital.”
“I can’t imagine any industry which provides the same level of pride as life science and health care. With this is mind I can’t stop being perplexed with the impression of lack of engagement I, as an outsider, get when I listen to people working at the largest healthcare investment in Sweden in modern times, Nya Karolinska Hospital. Looking beyond the incredible high cost to build the hospital, we now have one of the most modern hospitals in the world. As a manager I believe this should lay a solid foundation to create engagements, but from the media I get the exact opposite impression. If I have the misfortune of becoming serious ill, I feel very privileged to have access to world class health care around the corner from where I live in Bromma, and I hope everyone working there sooner or later regain the pride of working there.”
Nikolaj Sørensen’s last year at Pfizer, as marketing team leader for the blockbuster brand Lyrica, meant a lot of travel.
“I spent more time in an airplane than with my family, but then, as a stroke of luck and with perfect timing came an offer from Orexo. It was just what I wanted; a smaller company, hiring rather than firing, and to be a part of building something. I wanted to work as the entrepreneurial business person I saw myself to be. At Pfizer I was more of an administrator of a global organization.”
When he started at Orexo the goal was set on building a commercial organization directly at the company and to move away from being a R&D company to become a specialty pharma company.
Everything from his previous career, on many different levels, has contributed to his performance at Orexo, he says.
“Besides leadership and pharma industry experience, my experiences go all the way back to my student job as a sales person in an electronic store, where my boss taught me to focus on the customer at all times. That has followed me ever since. I have also learned a lot about manufacturing in low margin business from my time at BCG and how every cent counts.”
For the future of Orexo he sees two tracks. One track is in Sweden, working committedly on R&D projects, either with the existing staff or through hiring and contracting for specific expertise. “From a three to five year horizon I hope we will have another project coming out of our R&D in Sweden and being commercialized by Orexo in the US,” he states
The other track is in the U.S., where he hopes to expand the commercial portfolio. “We are working intensively with business development in the US to identify and acquire rights to products that can reach the market before our own pipeline is ready.”
Apart from Zubsolv in the U.S. the company’s other products are commercialized through partners.
”The partnerships with Kyowa Hakko Kirin and in particular the commercial success of our product Abstral for treatment of breakthrough cancer pain, has enabled our investment into commercialization of Zubsolv. Together with other early stage partnerships the milestones payments and royalties has provided a financial stability needed to take the next steps in the evolution of the company,” says Nikolaj.
”To limit the risk launching Zubsolv, we made a risk share agreement with a contract sales organization in the U.S. which served us well during the first year, lowering the cost of the launch substantially.”
”To limit the risk launching Zubsolv, we made a risk share agreement with a contract sales organization in the U.S. which served us well during the first year, lowering the cost of the launch substantially. However, partnerships require management and while the strategies and vision of the partners nearly always are aligned in the beginning, my experience is this rarely hold through during the life time of a product and how to manage this situation should optimally be regulated in the contracts from the beginning.”
U.S. drug pricing
I also asked Nikolaj about his opinion on the ongoing U.S. drug pricing debate. He said that historically U.S. drug pricing has been recognized to be much more attractive than European drug pricing. And this is still the truth for pharmaceuticals without competition, which has led to some of the obscene price increases we have seen recently in the U.S.
“From a personal perspective I find the system in the U.S. to be very ineffective, as a significant share of the revenues generated by a certain pharmaceutical is going to insurance companies and pharmacy benefit manages (PBM) and the value of the rebates rarely transform to lower prices for the patients.”
”However for products in classes with other products with similar therapeutic properties and in particular with generic products, the price pressure is immense. In Europe we are often mislead with official prices in the U.S. are significantly higher than in Europe, but we miss the rebates pharmaceutical companies pay to insurance companies. The net price received by the pharmaceutical companies is in many categories today below the net price in many European countries. From a personal perspective I find the system in the U.S. to be very ineffective, as a significant share of the revenues generated by a certain pharmaceutical is going to insurance companies and pharmacy benefit manages (PBM) and the value of the rebates rarely transform to lower prices for the patients,” he says.
Orexo’s main focus today is on pharmaceuticals against addiction, and opioid addiction in particular. More than five million U.S. citizens are misusing opioids and at least two million are opioid-dependent. According to New York Times, during 2017 there were approximately 72 000 overdose deaths in the U.S., including about 49 000 that involved an opioid (66.4%).
“Opioid dependence has a huge impact on society, beyond any other disease, and so many people, at all levels of society, are affected.”
“Unfortunately this problem continues to grow. From a societal and people perspective, right now it is one of the most severe diseases in the U.S. Opioid dependence has a huge impact on society, beyond any other disease, and so many people, at all levels of society, are affected. Some are just college kids, so there is a huge need for help all these people who are suffering,” says Nikolaj.
Only one in six people suffering from drug-use disorders currently receive treatment and the company has been active in both creating awareness and lobbying for increased access to opioid-dependence treatments. The bipartisan bill contains several reforms to address the U.S. opioid crisis and it looks like the political sentiment in the U.S. will also further support growth for opioid addiction treatment drugs, such as BNX (buprenorphine/naloxone) and BUP (buprenorphine).
“That’s a lot for a small company who holds five to six percent of the market.”
“I am very proud of what we, a small company from Sweden, have achieved in the U.S. We have for example been a driving force, supporting legislators and government with information and knowledge, for better access to treatments in the U.S., which led to a game-changing decision about increasing the cap on the number of patients that can be treated by physicians. Our campaign Out the Monster has also won a Gold Lions Health Award at the Cannes Lions Festival. [The campaign aimed to empower and encourage patients to come forward and face the monster so they may seek the treatment they both need and deserve.] That’s a lot for a small company who holds five to six percent of the market.”
Photos of Nikolaj Sørensen: Jenny Öhman/Copyright: Nordic Life Science
3 X Leadership
1. What is a successful leadership?
“Being able to create motivation and engagement, having everyone focused on a common goal to avoid a situation where you are not aligned.”
2. What is characteristic for your leadership style?
“Creating engagement and being a motivated leader who listens. I hope I am described as a leader with enthusiasm and a positive spirit that has strength. At Pfizer, according to the employment survey, one of my strengths was that I was more personal and closer to the organization. I think that is important, not to burst into a room and make people afraid to approach you. I also want to have a holistic perspective and I want to break down corporate silos. To share the same goals.”
3. What is the best part of your job?
“Here is an example of an episode that really motivates me. I was in Chicago in 2015, together with sales representatives, and we visited a doctor working there. He told us about his most recent patient, a 14-year old, girl sitting on the stairs when he arrived with her parents. She had injected heroine in her room at home and she was the same age as one of my daughters at that time. As a father, I can’t imagine nothing is more devastating than this. So I felt enlightened going to work, knowing I do something to help this young girl and many others like her to get out of addiction. Even if we could just help one person I would be very proud. Knowing that about 50 000 people every day use our product to combat their opioid addiction is the best part of my job.”
Facts Nikolaj Sørensen
Family: Wife and two teenage daughters, and my dog Charlie
Position: CEO and President, Orexo AB
Education: BSc Economics and Law, Copenhagen Business School; MSc Economics and International Business, Copenhagen Business School, including studies in International law at Glasgow University and Economics at Stockholm School of Economics
Career: Boston Consulting Group, consultant and project leader, Managing Director, Pfizer AB, European and Canada Marketing Director Lyrica, Pfizer Inc, Chief Commercial Officer, Orexo AB
Interests: Outdoor activities; hiking, playing football, skiing
Reading right now: Niklas Natt och Dag, 1783
Role model: Depends on the situation but I am fortunate to work with many brilliant minds
This interview was first published in our magazine Nordic Life Science, No 04 2018, November 2018