When the chemistry is just right
Pharmaceutical king Sir Allen McClay is nowhere near retiring says Eoghan Williams
Published 28/10/2007 | 00:00
WHEN the Queen made Sir Allen McClay a CBE, he declined to travel to Buckingham Palace to pick up the gong, insisting instead that one of Her Majesty's Minions make the presentation in his office on an industrial estate in Craigavon, Co Armagh.
That was the year before McClay cut his ties with Galen, the women's healthcare company he founded and went on to float for £1bn (€1.4bn).
Though his personal wealth is now put at €450m, it is a fair bet that the office where he received the CBE was no flashier than the rather standard one he shares today. McClay's somewhat 'functional' office overlooks the car park where there is -- quite deliberately -- no space reserved for the Chairman's 1996 Renault Safran.
A decade ago, Galen -- the pharmaceutical company McClay founded the year before the Troubles took hold -- became the first business in Northern Ireland to be valued at £1bn. McClay feels the flotation changed the company's emphasis from long-term scientific research to the "madness [of] preparing quarterly results and satisfying the needs of shareholders".
Galen subsequently bought US rival Warner Chilcott and then focussed its attention firmly on expanding away from Ireland and growing in the US. McClay, then approaching his 70th birthday, did not like the direction things were going and decided to step down in 2001. Though now officially a zillionaire, retirement was not an option.
"I don't like caviar, and champagne gives me flatulence. I could have bought a big yacht, but I hate boats. I could have gone off to an island in the sun, but I hate the sun. I do play golf, but if I retired I would get on a bar stool and shorten my life," he says.
He claims his main luxury is trying to keep his partner in clothes -- "She is a first class professional when it comes to shoes and handbags".
When he opens the floor-to-ceiling drinks cupboard beside his desk, a few Brown Thomas bags are certainly in evidence, but what stands out is the magnum bottle of 1979 Chateau Petrus Bordeaux. McClay says it is worth over €2,000. For one of Ireland's richest men it seems a small luxury. McClay is in fact an exceedingly modest man, convinced that many rich people "pretend to be happy", but he is not a man without a sense of showmanship. He gets up from the interview to open the corresponding refreshments cupboard of his CEO, Alan Armstrong. It, by contrast, is stuffed with family packs of cheap crisps and twix bars, with a teapot and cups neatly stacked on a tray.
Self catering was the order of the day when McClay left Galen on September 31, 2001 and on October 1, 2001 he rented a small unfurnished unit on an industrial unit in the shadow of where he had founded Galen back in 1968. He wasn't sure what his next business venture would be, but his main motivating factor was not to let down the talent he had built up in Craigavon.
"The people I had worked with had been my family since 1968, and now they were being scattered to the four winds.
Almac Sciences was established in January 2002, with McClay using the bulk of his fortune to plough into the new business and buy back arms of Galen. He says the science is now well beyond him and that his biggest commitment is financial, pointing out that "the only time anybody needs to go down the IPO route is when they don't have the internal resources to do what they want."
He reckons within the next few years Almac has a realistic prospect of achieving revenues of £10bn (€14bn). For now though, it is "like a little chemistry set" and McClay claims the move away from the short-termism of pleasing shareholders and the concentration on cutting edge research makes chairing Almac like "being able to play with a chemistry set every day".
The company has five divisions, providing integrated research, development and manufacturing services to over 600 companies worldwide including giant multinationals of the pharmaceutical sector such as Pfizer and GlaxoSmithKline. Almac employs 1,300 people in Craigavon, with 29 nationalities represented on site, with a further 800 in the US.
This week, the firm announced a €70m investment in Pennsylvania where it has launched its new North American headquarters and expects to take on a further 250 employees. The global HQ remains firmly in Armagh with McClay emphasising that "the economic relationship between our two countries is no longer a one way street".
So, with his fortune, McClay can do away with the need to raise funds through a public offering, but is the expansion in the US a sign that he can do nothing to stop his other gripe with Galen being replicated -- a shift to North America at the expense of Craigavon?
"I go back to my aunt Minnie, she had a saying: 'If you're going to launch big ships you have to go where the water's deep'," McClay says.
"Some 65 per cent of medicines are taken in America. It is a very, very sophisticated market. The Americans are at the leading edge in the research they do, so we've got to have a presence there."
But McClay is confident that Almac's core work will remain in Ireland, because that is where he has assembled his talented team, which includes five professors as well as research scientists recruited home from leading international universities including Harvard.
He is critical of a reliance on multinationals which concentrate only on manufacturing in Ireland.
"If you look at these businesses in the countries where they have big tax concessions, what they did was they attracted the manufacturing end, but once the knowledge end didn't come, the next country that offers cheaper labour or better tax incentives will get the business.
"That is a danger. Manufacturing can be moved easily. That's a fact that everybody in Ireland appreciates, particularly in the pharmaceutical industry.
"But with R&D, you don't shift R&D. R&D is where you get a nucleus of people. It's not like a machine."
At the cutting edge of Almac's R&D work is the diagnostics division. McClay believes it is playing a part on the global stage in the next big medical revolution: personalised medicine.
"I think if you really look at what we're about the big thing is personalised medicine -- to be able to diagnose properly and then to be able to get the correct therapeutic response for the diagnosis. At present we don't have that."
McClay does not have an exit strategy, but is working to turn Almac into a centre of cutting edge research comparable to the Wellcome Trust, the world's second richest medical charity.
McClay has not spent his millions on fast cars or big houses. Instead he is investing in a group of people based in Ireland who are playing their part in trying to cause an international medical revolution. It is this possibility which gives McClay his kicks and it is a possibility that he believes is very real: "Now, these are exciting times," he says, "but to me they are inevitable."