Genmab’s status as Europe’s leading biotech company is underlined after Genmab delivered a surprising record result for 2020. CEO Jan van de Winkel moves up to first place in Financial Weekly’s annual CEO Performance ranking. Inspired by John F. Kennedy and Henry Ford, among others, he has taken crucial initiatives and has led Genmab from crisis to success. Subject editor Morten A. Sørensen describes the case.
The rescue plan that was to lead Genmab out of a crisis has become a growth and return formula which has created one of Europe’s leading biotech companies. This is the reason why the company’s CEO Jan van de Winkel moves up to first place in Financial Weekly’s annual CEO Performance ranking, which is based on three parameters in the companies that the CEOs manage: ROIC – Return on Invested Capital, growth in return on capital and growth in revenue in 2020.
Genmab has delivered strongly on all three parameters and has come out of 2020 better than expected. Growth is likely to slow in 2021. But the quality of revenue will be even better, because royalty payments will account for more and milestone payments will account for relatively less. The year will also be marked by major investments in future growth. Basically, however, Genmab will be driven further based on several of the key principles that Jan van de Winkel – a co-founder of the company – has followed since he became CEO in 2010. From interviews and analyses in professional media, one can now piece together his formula. It has five core elements:
Renegotiation of cooperation agreements: By 2010, the company’s market value had fallen more than 80 percent. This was partly why Jan Van de Winkel replaced Lisa Drakeman as CEO. The company was in a crisis, and van de Winkel got an important partner, the large pharma group GSK, to help. Within a week, Genmab received a payment of $ 135 million from GSK in exchange for lowering some future claims for royalties and abandoning some milestone payments. This provided financial leeway to maintain a strong research effort, which was something that was going to be crucial for Genmab.
Combating silo mentality: The various departments, research, clinical development and the commercial side communicated poorly with each other. Therefore, Jan van de Winkel established portfolio boards, where teams across the functions met to discuss all aspects of the company’s projects and products. This approach has since helped to create a company that was more focused on products than on technology – a key prerequisite for success.
Outsourcing: Since 2009, Genmab had been trying to sell a malfunctioning factory, valued at $ 240 million, in the United States. van de Winkel wrote off the factory in 2012, sending a tough signal that Genmab would move on no matter what. The factory was later sold for $ 10 million. Genmab now uses a fully outsourced model for production and clinical trials. This has led to a deepening of the collaboration with external partners, which according to Jan van de Winkel you should be as committed to as you are to your own employees or family.
A long-term vision: From 2011 to 2012, Jan van de Winkel worked on creating a strategic vision for Genmab until 2025: Genmab was to develop ground breaking antibodies for use against cancer. According to Jan van de Winkel, that vision still drives himself and the company forward. He looked high and low for inspiration for the vision meetings and used, among other things, video clips of John F. Kennedy’s speeches about an upcoming mission to the moon and Henry Ford’s visions of creating a car for everyone.
Move the research out of the basement. Right after he became CEO, Jan van de Winkel’s office was on the ninth floor while the research took place in the basement. A new physical environment therefore had a crucial symbolic significance. It became flatter without lifts, but with “lots of stairs” that could lead to spontaneous meetings and exchange of ideas. An excellent, low-priced coffee shop served the same purpose, attracting both Genmab’s own staff and doctors and researchers from nearby hospitals and institutes. In this way, it is emphasized that research and exchange of ideas is the heart of the company.
All in all, Genmab has succeeded in attracting researchers who have not only developed the successful remedy for bone marrow cancer, Darzalex, but also a number of other promising products. According to analysts, a new substance, GEN1046, currently has “multi-blockbuster” potential and will probably enter a decisive test phase in 2021.