Cary’s Chiesi USA Growing in Specialty Pharmaceuticals Market
When Chiesi USA moved into its new headquarters in Cary earlier this year, executives of the specialty pharmaceutical company made sure there was extra space for long-term growth.
They leased the top two floors – 55,000 square feet in all – of a new, six-story, office building overlooking the Koka Booth Amphitheater and Symphony Lake in Regency Woods II. The glassed-in space, bright with natural light, is large enough for the company to double its 130-person Cary staff in the next 10 years.
Chiesi USA (pronounced (key-A-zee), the American subsidiary of family-owned Chiesi Farmaceutici of Parma, Italy, is updating its five-year strategic plan and expects robust growth in U.S revenues over the next decade.
That growth will come from the company’s current portfolio of marketed drugs, its pipeline of drugs in development, and its acquisition and licensing of new drugs from other companies, says Josh Franklin, Chiesi USA’s senior vice president of marketing and corporate development.
“We’re a performance-oriented company,” Franklin told the North Carolina Biotechnology Center during an interview and tour of the company’s new Cary offices. “We set audacious goals.”
Currently, the company’s U.S. portfolio of nine marketed drugs is focused on acute cardiovascular care, neonatology, cystic fibrosis and other rare diseases.
Globally, Chiesi is best known for Curosurf (poractant alfa), a lung surfactant for treating respiratory distress syndrome in premature infants.
Born of a merger
Chiesi USA’s roots go back to 2004, when Cornerstone BioPharma Holdings was formed in Cary to develop respiratory drugs. Through a reverse merger with Critical Therapeutics of Lexington, Mass., in 2008, Cornerstone became a publicly traded company and changed its name to Cornerstone Therapeutics.
Shortly after the merger, the company’s executives met with their counterparts from Chiesi to discuss the licensing of an asthma drug, but the conversation turned to Curosurf, recalls Franklin, who was working at Cornerstone at the time.
Cornerstone bought the U.S. rights to Curosurf, and Chiesi became a majority shareholder of Cornerstone in 2009. Five years later, Chiesi bought the remaining shares, taking Cornerstone private as its wholly owned U.S. subsidiary.
The merger was easy because, “We were engaged for five years before we got married,” Franklin recalls.
The merger also made life much simpler for the company’s executives, who no longer had to meet quarterly shareholder expectations, provide dividends, raise money or fulfill cumbersome public-reporting requirements.
“We report to Italy (now),” says Franklin.
“I’ve never been part of a family-owned company before,” says Ken McBean, Chiesi USA’s president and chief executive officer. “They’re making long-term decisions and long-term investments.”
Globally, the 5,300-employee Chiesi Group invested 23 percent of topline sales on research and development last year. That’s substantially more than publicly traded companies typically invest, says McBean, a former GlaxoSmithKline executive.
From 2008 to 2018 Chiesi nearly quadrupled its R&D investments to about 400 million euros.
Chiesi ranks fifth in R&D investment among all Italian companies, and first among Italian pharmaceutical firms. The company, which has about 600 R&D employees, including 30 based in Cary, also ranks among the top European pharmaceutical companies in patent filings.
Focus on rare diseases
While Chiesi’s main focus has been on commercializing products for the hospital and related office-based specialties such as endocrinology and hematology, rare diseases are a growing emphasis.
Chiesi has an emerging business in lysosomal storage disorders including Fabry disease, an inherited enzyme deficiency that leads to kidney disease, heart attacks, stroke and other organ failures at an early age. The company is partnering with Israeli biotech company Protalix BioTherapeutics to develop an enzyme replacement therapy for Fabry.
The company also has two products on the market for treating complications of the genetic disease cystic fibrosis, a disorder that causes severe damage to the lungs, digestive system and other organs in the body. Cystic fibrosis affects the cells that produce mucus, sweat and digestive juices.
A third drug candidate – licensed from an Australian company – is undergoing FDA review.
If that drug is approved for sale, it would trigger a “mild expansion” of Chiesi’s U.S. staff, McBean says.
“What we need to address is how we build a rare disease business in the U.S. because we have a (product) pipeline, and we have the potential for accelerated approval for one of those products,” he says. “We might have to build two businesses – one global, and one U.S. We may need to turn around and add 15 or 20 people pretty quickly.”
Accolades, community involvement
In January, Chiesi USA was named a Top Employer in the United States for the fourth year in a row by the Top Employers Institute, an authority on identifying and measuring employment best-practices worldwide.
“At Chiesi, people are our most valued resource,” says McBean, “That’s why we are purposeful about building an organization where people can grow professionally, enjoy their workplace and value the work they do.”
The company and its workforce have established a strong culture of community giving.
In 2018 Chiesi USA invested nearly $850,000 through its corporate social responsibility program, and employees dedicated 1,600 hours of time to community organizations and activities.
“Social responsibility is central to our mission statement, and our employees continue to drive this effort to support the communities where we live and work,” McBean says.
A main initiative called the Elementary Engage Program is a partnership to improve local elementary schools lacking resources. In 2018, Chiesi provided funding and employee-volunteer time to Poe Elementary School in Raleigh, supporting the school’s conscious-discipline initiative, as well as itswellness and community-building efforts. The company also continued its previous work with Bugg Elementary in Raleigh, supporting wellness and digital activities at the school.
“That program has just wildly exceeded expectations,” Franklin says. “We know we’re making a difference in the schools. This is important to our employees.”
Chiesi would like to find other corporate partners to follow up on its school involvement.
“When we move on to the next school, why don’t you come in behind us?” Franklin asks. “At that point, the heavy lifting is done.”
Adds McBean: “You don’t have to be a large company to do this. Sometimes you just have to have the table set.”
Additionally, Chiesi supports nonprofit groups within the company’s therapeutic areas, such as the March of Dimes, American Heart Association, cystic fibrosis nonprofits, Neonatal Nurses Day and Prematurity Awareness Month.
Triangle Business Journal this year recognized Chiesi with its third consecutive Corporate Philanthropy Award.
Corporate giving is “definitely in our DNA, and it starts with the Chiesi family,” McBean says. “They are wired this way.”
Ten percent of the company’s goals are devoted to sustainability initiatives.
Chiesi’s community involvement has earned it designation as a Delaware Public Benefit Corporation, a legal status for corporations committed to acting morally, ethically and responsibly.
“This is a crucial step for Chiesi to stay relevant in the world today, especially as people keep a close eye on companies’ values and their commitment to society,” says McBean. “We’re excited and motivated to hold ourselves accountable to strengthen our community through our work both inside and outside our walls.”