Immodest ambition drives Elan CEO to the top

Mr Donal Geaney, chairman and chief executive officer of Elan Corporation, does not believe in modest ambitions.

He says it won't be long before Elan Corporation becomes Ireland's most valuable public company and after that he is aiming to make it one of the largest pharmaceutical companies in the world.

In parallel with these ambitions, his grand plan is to increase Elan Corporation's sales to $1 billion (£714 million) by 2001.

While some may see these ambitions as the product of over-confidence, any objective review of Mr Geaney's record at Elan Corporation would suggest that at least some of them are achievable.

The company now has a market capitalisation of $5.4 billion compared to $2 million when Mr Geaney took up his current position in 1987.

Elan's share price on his first day with the company stood at $12; it has now reached an impressive $54. Mr Geaney attributes the growth to what he calls "the team" at Elan.

Heading the third largest public company in Ireland, it might be expected that Mr Geaney and this team would be widely recognised within Irish business circles. But until recently that has not been the case.

This is probably because of the shortage of pharmaceutical companies on the Dublin market and the consequential lack of interest among Irish investors in the area. Conversely, the US stock market has drawn Elan to its bosom.

The company's business is exceptionally high-tech and not only involves producing drugs and medicines, but also creating more effective ways to deliver them into the body.

Mr Geaney spends considerable time in the US and 90 per cent of the company's products are sold there.

The Dubliner's hard-nosed style makes him well suited to the sometimes brutal world of the US drugs industry.

Despite the challenges of quarterly reporting and meeting the stringent standards of the US Food and Drug Administration (FDA), Mr Geaney likes doing business in the US.

"They are very up front there and respect you once you are honest and disclose everything that is relevant," he says.

Disclosure is important in the pharmaceutical industry because investors remember the bitter experiences of the past.

While there is now a more noticeable Irish presence on the New York stock exchange, Elan was one of the first companies to dip its toes into Wall Street.

Mr Geaney is sharply aware that while the company has a chance of outgrowing the giants of the Irish market, like AIB and Bank of Ireland, Elan is still a small player in the US.

"We are not in a position to pat ourselves on the back just yet, we still have a lot of extremely hard work ahead," he says.

Nonetheless, he is eager to point out that Elan is an Irish company, run by Irish staff.

He says that unless companies globalise and change radically they will not survive in the long term. "Look back at a list of the main companies on the Stock Exchange in Dublin in the 1960s, very few of them are left now I think we all know why," he says.

He had to undergo his own radical change back in 1987 when he decided to leave his job as a partner in the accountancy firm Stokes Kennedy Crowley (now KPMG), where he had worked since graduating from Trinity College.

A spell working with Elan gave him a taste for the world of mergers and takeovers and he was soon hooked.

"If I had not taken the chance I would have missed out on everything that has come along since then," he says contentedly.

Most of this has revolved around broadening Elan's horizons.

The company began as a niche operator with the hypertension drug, Cardizem. Over the last few years it has sought to develop a broader base of drug products.

Elan is keenly aware that almost as important as existing products is the research and development effort required to produce future products.

the products must keep up with constant the incessant changes in healthcare and science.

Trinity College plays an important part in this process as Elan's drug research centre.

At the Trinity facility, scientists develop new products for Elan which will not come onto the market for at least six or seven years. Mr Geaney says the people in the Trinity facility are stretching the boundaries of science.

Elan is a very large company, but in global terms is only in the top 100 pharmaceutical companies in the US and could be a takeover target.

This week's merger between Glaxo Wellcome and Smithkline Beecham, while a huge deal, still only gives the new entity about 7.5 per cent of the pharmaceutical market.

This is because there are so many players in the industry and many of the larger ones have the ability to swallow a company of Elan's size.

Elan has a manufacturing plant in Athlone employing approximately 700 people, a corporate headquarters in Dublin and other operations spread between Florida, Switzerland and Israel.

"The challenge for us is to stay big enough so we can't be acquired," says Mr Geaney.