There’s much more to Ireland than tax breaks — pharma boss Grainne McAleese
GRAINNE McAleese works in an enormous, gleaming Fort Knox of a factory in West Dublin. To get in you have to provide your name in advance to the security guards. “Pretty typical of most pharma companies,” McAleese says.
The pharma company in question is Alexion, where McAleese is general manager for Ireland.
The company has been here since 2013 and employs 250 people across sites in Blanchardstown and Athlone. Total revenues were $2.6bn (€2.5bn) last year, with net profit of $144.4m (€136.8m).
It has a significant manufacturing operation here. Out of the back of the massive factory there’s a massive building project under way. The company has substantial growth plans and aims to have 500 employees in Ireland by 2019.
McAleese says Alexion’s move to Ireland came about because the company “really needed to expand their manufacturing capability and capacity” due to rapid growth. Since the 2013 move the company has announced €700m of investments.
“There’s already a significant biotech cluster here, you even see some of the other companies that are right around this area, and the skills and the talent were here, to be able to do it in Ireland, versus looking at another European location, or another location in Asia potentially,” she says.
“I think access to the EU and being English-speaking was a factor, tax is obviously a consideration but what’s more critical for the company is around the stable corporate business and tax environment in Ireland.
“We really wouldn’t be investing such a significant amount into Ireland and hiring such a huge proportion of our total employee pool in Ireland if it was just for tax.
“There are significant operations here, and we feel we can really hire the people we need to build a strong team and have really strong talent here.”
As well as the construction going on in Blanchardstown, Alexion is adding 50 jobs in Athlone via the construction of a new factory which has received planning approval.
McAleese is an accountant by profession. After studying in DCU, McAleese (37) took the well-worn path through KPMG in Dublin before joining PwC in New York. Many of her clients — not by any particular design — were in the pharma sector.
“It was always an industry that interested me and intrigued me. There’s science in my family, my sister is a scientist, so I suppose I always had an interest in pharmaceuticals. When I left PwC in New York I joined Elan, the Irish pharmaceutical company, in San Francisco... I think at that stage I was ready for a challenge of helping to be part of a company and helping to run the finance organisation in a company rather than being client-facing all the time,” says McAleese.
She worked at Elan for 10 years and ultimately became group financial controller. A lot happened in her time there. In 2005 the company withdrew multiple sclerosis drug Tysabri over fears it could be linked to the development of a rare disorder in patients.
There were acquisitions, crises, spin-offs. Then there was a series of hostile takeover bids from Royalty Pharma, with the company ultimately being sold to Perrigo in 2013. McAleese left after that transaction, but wanted to stay in the same sector. A job came up at Alexion, and she was happy to jump aboard.
The current gig involves a lot more time spent on the operational side of the pharmaceutical industry. But McAleese says many of the same principles apply whether you’re managing a finance team or a larger organisation.
“Good systems, good processes, good practices, good compliance. They are all equally relevant in terms of running an operation... and the same as with a finance team, having great people, great leaders who are running these businesses as well,” McAleese says.
Alexion’s purpose is to develop treatments for rare diseases. Its top product is Soliris, which treats two conditions and was at the centre of a row last year with the HSE over a €430,000-a-year per patient price tag.
HSE director general Tony O’Brien called the cost “astro- nomical”. It’s one of the most expensive drugs in the world, if not the most expensive.
There are reasons for the price run, according to McAleese.
“Our therapies don’t provide only incremental benefit — the therapies are transformative,” McAleese says.
“Doing what hasn’t been done before with science and innovation we give lives back and often restore patients to a normal life expectancy and a very high quality of life.
“Importantly, given the small number of patients, the budget impact for any single payer or government is limited... we have been successful in partnering with governments in nearly 50 countries and patients are benefiting from the life-transforming benefits of Soliris.”
McAleese says the price comes down to factors including the extreme rarity of the disease — which can mean there isn’t much incentive to develop a pharmaceutical product unless there’s a prospect of a high price.
“Our products are indicated for the treatment of diseases that affect a very small number of patients, falling far below the low threshold for an ultra-rare disease.”
Alongside McAleese in Alexion’s upper ranks is Julie O’Neill, Alexion’s executive vice-president for global operations. The company is notable in Ireland’s pharmaceuticals industry in having two women in senior positions.
“I suppose we’re slightly unusual... but I think there is a growing population of women coming up through the ranks in the different biopharma companies.
“And I would hope by the example of seeing senior leaders in pharma like myself and Julie encourages other young women that there are opportunities — and great opportunities — for them in this industry.
“And it’s actually something we’re actively trying to encourage in terms of encouraging young female students to take Stem subjects and ensure that there is a bigger take up of women in Stem and in science in later years.
“We’re looking at ways that we can really inspire and motivate and encourage female students that this is a fantastic career path and you can have a really valuable work experience and life experience from working in this industry.”
For McAleese’s part, she has never experienced any discrimination.
“I’ve never felt any gender bias, and it could be either my generation or the fact that I’ve always worked with progressive, very supportive bosses where gender was not an issue. And that’s both male and female bosses.
“And I think it’s important when you look at successful women in industry, it’s not just about women supporting one another, it is about male bosses as well encouraging females in the same way that they would encourage any male employees, with equal opportunities.”
McAleese has daily interaction with Alexion’s head office in the United States, providing progress updates on operations, financials, and the big capital projects. Once the capital spend is out of the way by 2019 the focus then will be on execution, supporting the growth of Alexion’s products, McAleese says.
Asked what she’d say if she met Taoiseach Enda Kenny tomorrow and was asked for advice on ensuring Ireland remains a pharmaceuticals hub, McAleese says: “I would say that we need to keep competitive, that means as competitive a business environment as possible. That would mean looking at our tax rate but also our business environment and regulations and other things like that.
“We also need to ensure we have the right talent. Currently we have a significant number of people employed in pharma in Ireland but also in biologics. And that is expected to grow.
“So it’s about ensuring that we’re putting the right level of investment into our universities. So I would say business environment and competitive tax rate as well as ensuring we’re investing in the right areas of university education.”
In a world full of geopolitical turmoil, where US president-elect Donald Trump is threatening American companies with a 35pc tariff if they shed American jobs and move overseas, she doesn’t foresee much of an impact on Alexion’s Irish operations.
“There’s definitely a huge amount of uncertainty and it still remains to be seen what would happen from a Trump presidency in the US. That would have a bigger impact on us — what happens in the US market, rather than a Brexit scenario.”
However, she had some words of comfort about the company’s longer term commitment to Ireland. “We have to wait and see what happens. It’s still an uncertain tax landscape in the US, with Trump as president.
“But already having located here and having committed such big investments here, that really doesn’t impact what we need to do overall as a company and how Ireland will contribute to the growth of Alexion in the future.
“It may impact companies that are looking to locate somewhere in Europe now but I think for companies already in Ireland it will have very little impact,” McAleese says.
“We’re here to stay.”
‘Our therapies don’t provide incremental benefit — they can transform the lives of patients’