LEO Pharma introduces new operating model to increase competitiveness and support future growth
Ballerup, January 19, 2022 – LEO Pharma today announced the introduction of a new operating model and change program to simplify operations, increase profit-ability and fund its ambitious growth strategy.
In 2020, LEO Pharma unveiled its strategy towards 2030. The first phase of this strategic transformation process – including the introduction of a new capital and governance structure – was recently completed. Next phase, announced today, is about focusing on core business and operational efficiency, and improving competitiveness and continuous adaptation to the commercial model that best fits the company’s product portfolio and to the evolving needs and preferences of external stakeholders. Through these adjustments, LEO Pharma will be poised for delivering consecutive growth.
“We are at a defining moment in our transformation journey – and in the history of our company even. With our strategy towards 2030, we know that we are well-positioned for a bright future within innovative medical dermatology. To release the full potential, we must now increase profitability and make bold investments in the best and most innovative treatment options for the patients we serve,” said Anders Kronborg, Chief Financial Officer and Acting CEO and President of LEO Pharma, and continued:
“The new operating model we announce today will make a much more simple, agile and efficient LEO Pharma and this is the best way forward for us to ensure sustainable business model for the future. It will affect employees who have served the company with loyalty and dedication for many years. We will do our utmost to support our colleagues as changes are implemented”.
Simplified setup and focus on core business
To further accelerate the transformation process and increase competitiveness and profitability, LEO Pharma are optimizing its commercial operating model globally and across markets to best fit its product portfolio to the evolving needs and preferences of the external environment.
LEO Pharma’s Global R&D organization will focus the in-house drug discovery on promising small molecule technologies and further increasing productivity to realize the company’s ambition to launch a new innovative asset or enter a new indication every two to three years. Other initiatives include driving efficiencies through outsourcing; further standardization; boosting digitalization as well as centralizing systems, data and analytics. Also, LEO Pharma’s Open Innovation, Regenerative Medicine and the Science & Tech Hubs in Asia and Boston, US, will be closed as a part of the changes announced today.
The changes are expected to affect around 1,000 positions in the global organization over the next two years. Today, the announcement has directly affected 68 people in LEO Pharma’s global organization. Final estimates for headcount impact in all areas of the business are subject to completion of applicable consultation processes.
Poised for growth
Since the launch of the 2030 strategy in 2020, LEO Pharma has progressed on the ambitions of transforming the company into a global leader and top five player in medical dermatology. On this journey, the recent FDA approval of tralokinumab in the US was a major milestone and a turning point in the ability to grow to advance the standard of care for patients, their families and society by bringing innovative treatments to the market. Other key achievements include the efficiency gains and savings already delivered, and successfully expanding sales of the established product portfolio.
By bringing tralokinumab and other innovative treatments successfully to the market and introducing the new operating model, LEO Pharma is poised for delivering consecutive double-digit growth and an EBITDA margin of 25% by 2025 preparing the company for an IPO within a four-to-five year horizon.
About LEO Pharma
LEO Pharma helps people achieve healthy skin. The company is a leader in medical dermatology with a robust R&D pipeline, a wide range of therapies and a pioneering spirit. Founded in 1908 and majority owned by the LEO Foundation, LEO Pharma has devoted decades of research and development to advance the science of dermatology, setting new standards of care for people with skin conditions. LEO Pharma is headquartered in Denmark with a global team of 6,000 people, serving 93 million patients in 130 countries. In 2020, the company generated net sales of DKK 10.133 billion.