In mid-June 2016, the Minister for Health, Marisol Touraine, announced a third National Plan on Rare Diseases – which affect almost 1 person out of 2,000 in France. We believed this provided a compelling opportunity for the Sycomore Sélection Responsable fund to strengthen its exposure to the healthcare industry, particularly on the theme of orphan diseases. We therefore invested in the Irish pharmaceutical Shire, a company led by Flemming Ornskov and employing 5,500 people.
Adding value for society as a whole
Shire, which features among the top 100 most sustainable companies in the 2015 World Economic Forum, creates genuine added value that is of direct benefit to the community. The group is unique in that is focuses on rare diseases which are still poorly addressed by the industry. Shire enabled over 1,300 patients suffering from these illnesses, from 34 counties, to receive free treatment.
Clients and suppliers: best practices within the industry
Shire has implemented an ambitious CSR policy designed to address the key challenges inherent to the sector. As far as product quality is concerned, the group is well positioned: Shire has not received a warning letter from the FDA for the past 6 years – only two insignificant product recalls.
The company is a member of Pharmaceutical Supply Chain Initiative since 2016 for its speciality drugs, for which production is outsourced. In addition, regular audits are conducted on the suppliers. The legal proceedings initiated in recent years against the company for the promotion of “off-label” uses for some of its drugs led to relatively low penalties.
Committed to environmental stewardship
The group’s clinical trials, which are conducted on animals, received accreditation from the Association of Assessment and Accreditation of Laboratory Animal Care; these trials are carried out in compliance with a strict policy covering issues of bioethics and animal welfare.
Although environmental risks are lower in healthcare than in other industries, the group addresses these issues seriously throughout its operations. A discussion on the positive and negative impacts that Shire’s products may have on the environment will be held when our portfolio managers next meet the company. In addition, Shire’s human capital management – which focuses on employee empowerment and on inspiring its teams with an attractive corporate mission – stands out in the industry.
A proven leadership
Finally, Shire benefits from a solid governance model based on an independent board of directors (82% independence ratio) with diverse skills and backgrounds and a high quality executive team renowned for its excellent track record. The group is fully transparent on the CEO’s compensation and minority shareholders’ rights are respected. Past issues relating to tax optimisation and the payment of auditors for non-audit missions, which are historically high, will also be addressed by our portfolio managers when they meet the company.
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