Nikolai Tangen: Hi everyone and welcome to In Good Company. I'm Nikolai Tangen, the head of the Norwegian Sovereign Wealth Fund and today I'm in particular good company because I'm here with Albert Burla who is the chairman and CEO of Fizer, one of the largest farmer companies in the world. Now Albert has been with Fiser for 30 years, been CEO since 2019 and has led the company through a remarkable period of change. Warm welcome.

Albert Bourla: Thank you very much. And you know I'm with Fiser 33 years. I'm with I'm with my wife 30. All right. I I got it mixed up there a bit.

Nikolai Tangen: Yes. Now, a lot of stuff has happened since you took over as uh CEO. What What are you most excited about just now?

Albert Bourla: I think I'm always excited by by the future like all CEOs, right? They see the the opportunities ahead and um uh science is at the highest uh levels we ever had it and science is affecting our business uh very big time. So I'm very very optimistic about the scientific progress that we can see in the next years until the end of the decade.

Nikolai Tangen: You sharpened the focus on innovative medicine solo consumer healthcare and so on. Why did you think that was the right decision to make?

Albert Bourla: I'm a believer that you know corporations role is not to hedge uh it is uh to be very good a few things investors role is to head. So I believe that requires different culture for a scientific company and different culture for a consumer company and very different culture for an of patent generic company. So I felt that uh we should choose to be good at what it is really important and that was science.

Nikolai Tangen: M m now we're not going to spend much time on on co but we have to just touch on the fact that you did an unbelievable job uh put a a huge amount of your own capital in there and produced the vaccine in 8 months just how was that possible?

Albert Bourla: Well, you know it was the possible uh for several reasons but the most important is was exceptional times. So everybody felt that this is not uh business as usual and everybody felt that um the the culture of society, our civilization is it's at risk. So everybody gave everything. And when I say everybody, I mean the government, I mean uh our people, I mean uh our hospitals that corroborated. So it was uh not easy to be done without them being aligned.

Nikolai Tangen: Why don't we continue to work this way at full speed?

Albert Bourla: because uh we don't have this big need that uh is driving people's behaviors and they have the tendency to go back to the old habits. I have seen that with regulators but after being extremely uh instrumental in being able to achieve what we achieved they became back to more conservative. I have seen that with the government operations that were opening the ways to uh to us to be able to accomplish what we accomplished and now they are back to the normal uh trend. So it's uh unfortunately you need a common enemy to motivate people.

Nikolai Tangen: Absolutely. No, we see that in many places. Now on the back of that success you had a big pile of money and then you had to decide what to do with it. M how do you decide on a thing like that?

Albert Bourla: First let me tell you that I don't think that it was only the money that came to us that it was a very big asset. Uh the most important I think was that they believe in our organization that there is nothing that we can do. M our people felt so proud about what they were able to accomplish and as a company and individuals we were soured by awards and uh by recognition uh that um make us all feel that uh when we put our will together we can uh bend every curve. Mh. Um that's a very big asset and I think that we found it extremely helpful once things went uh not good after the co uh uh was controlled by what we did and as a result the money stopped being as big as they were coming. Uh so the fact that we had developed this resilience culture helped us a lot to pivot to something new. M

Albert Bourla: uh now the money were quite quite quite good and we invested it all. There were a lot of uh uh of course uh people that uh would have different views as to how this money needs to be invested. Um there were the conservative people that would say give it as a dividend. Uh there were people that were saying uh buy back shares and you know our sales were at 50 at that time. uh and uh there were uh people that were saying it's time to invest in business. So it's a unique opportunity. You have an LOE period. You need to to make sure you do investments. I've chosen the last part and uh we did a significant amount of investments almost 80 plus billion dollars in acquisitions. Uh three of which are 80% of the total cost. And um uh still the jury is out particularly in the bigger one of them uh which was uh siden it had products that uh they were in the market and over there it's an overwhelming victory those products are doing tremendously well

Nikolai Tangen: well we we'll come back to those but just first that kind of confidence that you gain by achieving uh something like you did during co how long time does that confidence last

Albert Bourla: it was a very tough period in the year 2023 uh in 22 our revenues from COVID were 56 billion now it is six so it's it was a huge but the confidence I mean the you know the fact that people think they are super human I'm I'm coming to to that so when you are having such a drop of reality from uh the stock being the best performing to suddenly the stock being the worst performing that puts a lot of doubts in everyone's minds and collectively and individually that included me that uh I was wondering if I'm a failure just months after I was the hero of the world but also I knew that that included many people uh in my organization because they perceived the stock price as an external validation of success and when that was not there anymore and of course not the weekly recognitions that we were receiving they felt very bad.

Albert Bourla: uh still I believe because we developed this resilience and because this memory uh was lasting a lot we were able to overcome it and in 24 we came up uh really as winners mentality with the confidence that we can go and win in the marketplace we can win in business development we can win in research and that's what happened in 24 and 25 there were exceptional years in terms of performance everybody was very impressed how we are able to grow topline and beat analysts and reduce cost.

Nikolai Tangen: Organizational confidence is such an interesting thing, I think. And um one of my favorite movies uh is Kung Fu Panda. I don't know, you probably haven't seen it because it's a children's movie, but basically they're trying to I love children's movies. They're trying to figure out why this panda is so strong and you know uh what's his magic thing and they find these magic ingredients and it's basically just a mirror. They they you know, he believes he believes in himself. How do you how do you how do you foster uh organizational confidence, self-confidence?

Albert Bourla: Uh it is um coming with um confirmation through successes. It's very difficult uh to build a a culture of confidence. If uh people see only failures in front of them, they need you need to to to take it together with with successes and you need to magnify because there is always in the organization pockets that they are having examples of that and pockets that they don't and usually everybody's attention it is on what went wrong. You need to make sure that you project to the collective organization what went right as well.

Nikolai Tangen: Um let's go back to the uh the acquisition. So you spent more than 40 billion uh to buy uh siegen. What was it that you saw there that other people didn't see?

Albert Bourla: It was a one technology to be frank and that technology was ADCs. It was a a technology that um was started to become one of the hottest new things in oncology. It was not yet at that time. it became much bigger and there were a lot of singular players here and there that they could have ADC technology but there was only one that uh had four products in the market and they had uh 13 R&D uh projects in a clinic

Nikolai Tangen: ADC being antibbody drug conjugates

Albert Bourla: antibbody drug conjugate it is one of the latest uh uh and more promising ways to fight cancer

Nikolai Tangen: why does didn't work so well.

Albert Bourla: You should consider the ADCs like this extremely precise missiles that modern warfare is is using. Why they are so extremely precise? Because they have a GPS systems that takes them directly to the target and then based on what is the target they can adjust the warhead. They can make it big, small, explosive. This is exactly how ADCs works. The antibbody is the GPS and it is programmed biologically to identify a location in the body and go and stick to it. And uh the drug it is the warhead that uh it is carried together with the antibbody and when it hits the target is releasing uh the impact. Imagine a chemotherapy that doesn't go everywhere but uh goes predominantly to the cancer cells. That's the ADC technology. You can change the antibbody and you can send from liver to brain to bones to stomach. You can change the payload and you can use radioactive payloads or you can use chemotherapy or you can use protease. You can use a lot of different weapons. But that's exactly the beauty of it that uh from a from a scientific and business perspectives gives you an opportunity to have so many combinations and so many sorts and goals.

Albert Bourla: So that's what u I really believed in in that and and we did and if the technology is proven to deliver on the promise it's going to be one of the most successful acquisitions if the technology doesn't deliver uh to what we were uh hoping will do I think will be like a modest return but I don't think we will lose money.

Nikolai Tangen: So this was so that was in oncology. Now um the other area you wanted to zoom in on was obesity and you you you you uh you bought Matsera. Why was that so important Dubai and you out Nova Nordisk there?

Albert Bourla: Yes we we always uh believed that uh obesity is a very big area and we always believe that Fiser it is the company that can be very competitive over there. So we enter into the obesity space way back in the day and um if things wouldn't go wrong for us scientifically because two major assets that we had in the clinic uh they suddenly saw signs of liver toxicity. So we had to discontinue them although they were very effective right. Um but uh if that was not the case we would be the first to launch an oral uh product right now in the market and uh things will be very very different for all of us. But unfortunately this didn't happen. So now we are having a development organization that knows how to do primary care a very big complicated studies. We have a commercial organization that it is a powerhouse and knows how to sell stuff. And uh we have a manufacturing network that can make those stuff better and faster and cheaper than anybody else. And guess what? We didn't have a portfolio. So it was for us extremely important to cover this gap because of bad luck of scientific bed luck with an acquisition. And that's what we did with Mera.

Nikolai Tangen: um why is your um clinical success rate better than competition so I think the success rate in the industry is something like 10 11% you are quite a lot higher than that why are you why are you so good

Albert Bourla: Um I think because uh uh you can have first of all this type of success and you're right one in 10 succeeds in the industry almost two in 10 succeeds in our hands. So we are 18 19% of uh clinical successes and uh we have a very very long history as a research organization and actually Fiser's research organization it is I believe one of the best I'm sure we will discuss what we have done to change the trajectory of Fiser organization but uh because when it comes to capabilities we are all the metrics indicate that uh we can kill it that you mentioned one of I can mention to you uh the phase 2 uh success rates that uh with an industry being around 25% and uh uh 30 and we were below that 15 20 and we jumped it to 50 plus uh in regulatory success we are almost at 95%. So all the metrics are showing uh that we are very good but I wouldn't also say the success because sometimes success is because you choose to do easy things and not challenging things right not scientifically big uh big project. uh if you see the number of breakthrough designations that we received from FDA which is a recognition that uh this potential medicine it is so good that I will put it in a fast track because if it is successful can change the trajectory of a disease. Uh we were among the top ones if you see how many approvals we received we were among the top ones. So I think we were always very very good when it comes to capabilities.

Nikolai Tangen: So but you restructured last year.

Albert Bourla: No, no, no, no. There is a big butt. I don't think we were perceived as very good for a good reason because when you measure how much we put in the system and how much we got out of the system in terms of dollars, we were mediocre not top quartile because everything else that I told you we were top quartile.

Nikolai Tangen: So what did you change last year?

Albert Bourla: What was the reason of of that? Uh it became very clear to me that we made the wrong choices into choosing uh which products to develop. They were not easy technically uh which makes me even more angry. uh so it was technically challenging but we miscalculated the commercial potential of those products and there were silos between R&D and commercial that created that it was uh uh not focus on the R&D we were going to whatever uh we had as positive data we would go and develop it um and that's the number one thing that I aim to change um the good news is that um if it was a question of uh capabilities for us that would mean five six seven years journey to be able to turn that around. If it is a question of focus with good capabilities but wrong focus that's a cultural that's a governance that's a leadership issue you can change within months.

Nikolai Tangen: Let's spend some time on uh on AI. Um we recently you and I spent some time at the conference together where some people think that within 10 to 15 years we can get rid of all the illnesses in the world. With more use of AI. Just what are your when you hear that? What are your reflections?

Albert Bourla: I I think that it is a very bold statement that uh probably exaggerates to make a point but I think still the point is valid. I think that we will see in 10 15 years and earlier I think by the end of this decade in five years uh tremendous tremendous progress that uh it is uh due to AI in addition to advancements in biology. So that's the point. I don't think in 15 years all diseases will be cured. Uh but I think that in five years we will have a very different level of standards of care.

Nikolai Tangen: How does how will that change the pharma industry?

Albert Bourla: Will change it? Uh not only the pharma industry, will change the pharma the health system, will change hospitals, will change physicians, how they are uh organized. Uh it it will change regulators, how they see products and it will change pharma and pharma will change in research and development because I think we can identify better targets and then synthesize better molecules and then have better clinical trial. but also in manufacturing and it will be make huge difference also in commercial uh approaches.

Nikolai Tangen: Is it good news or bad news for VA?

Albert Bourla: I think it's very good news but uh we need to be careful that that will be radical change that will be a disruption and uh disruption always creates new winners and new losers. The bigger the disruption the bigger the uh new and how will you make sure that Fiser is on the right side of that change? That's all I sleep and uh uh go to bed and wake up with in my mind. There are two things, China and AI and uh and politics unfortunately.

Nikolai Tangen: Let's do AI first. Just specifically, how do you how has it changed the way you were because it was it was instrumental in in helping you with the with the COVID vaccine, right?

Albert Bourla: Yeah, it was. And it was not with the vaccine that much. It was with a treatment pcloic the pill that we discover was indeed the first machine learning molecule that with such an impact at least that I'm aware of. Um AI cannot do everything right now but can do way more than what we are using it for. That's the fundamental question I'm asking. All these models can do way more than what are used for. And the question is so then why they are not used as much because right now we have been reached the level that it is not a question of technology. It is a question of uh organizational ability to adjust and transform itself through AI.

Albert Bourla: um that poses a question uh what is the best way to enable leaders to transform their organizations with AI and um I think the first one it is that they should receive the accountability of doing it. So there are two two views to how to organize AI. One it is centralized. You have visionary AI guys that they're coming and they are building your discipline in your and then they cascade to everybody else. And there is one that it is very decentralized that says that the center is only the infrastructure, the data, the computing power, the cloud. But then the accountability, responsibility and resources to create use cases uh is with the units, is with manufacturing, it is with research, it is with commercial. uh I went to that and we discussed it a lot with Fiser and we moved into giving accountability to our leaders to do those changes but also they have to deliver. So they have all the obligation to deliver their transformational plans that uh will will really uh move uh the needle really uh go to something very different. So I think that's a very very important thing.

Nikolai Tangen: Um you mentioned AI and China. What is happening in China in the VA industry?

Albert Bourla: I think the Chinese when they put something in uh their mind as top priority they have proven that they can deliver exceptional results. So the saying is they are working with the five years plan and they had 2025 was the 14th five-year plan from Maetung's time and this is where they first time spoke that they want to develop by years 35 to 36 global players in pharmaceutical space and to do that they said in the first years they need to develop a biotech and improve science. etc. They did tremendously well. Right now the um in the nature index uh of uh of of ranking universities uh based on uh scientific outputs uh out of 10 the top 10 was always eight US the usual suspects MIT, Harvard. uh in 25 only one was US Harvard and eight were Chinese. Eight of the top 10 were Chinese in the world based on peer review publications that uh they had and grants and PhDs and and all of that. So the progress that's happening is amazing from uh uh uh the early stages of uh drug discovery to regulations to IP protections to utilizing talents encouraging investments subsidies uh it's it's uh they are moving with the speed of light

Nikolai Tangen: is it the basic research uh you think which is the main reason behind this one one of the what are the factors influencing they factors that influence

Albert Bourla: was the the execution of a meticulously well thoughtout plan. The first one was you need to have uh a regulator that like their FDA that it is not corrupt that it it is competent that can differentiate between garbage and uh diamonds when it comes to science. They did that meticulously well. they change their FDA regulations after repeated visits to the FDA here in the US to know how they are doing it. The second is that they know that if someone invest his money to make uh uh something in biotech, the whole asset is a formula on a piece of paper. It's not uh the machines, it's not the buildings, it's not the the drills. So to do that, you need to have very strong IP protection. So they developed a very strong intellectual property protection system in China that gave confidence now to investors that regulator will be fair and is on on science and objective. My patents will be protected because we have that this new law that came and they created a judiciary system that can resolve uh IP disputes very quickly. So if someone challenges your patent you are not having uncertainty for 10 years.

Nikolai Tangen: and what can um regulators and society do are there any if you were to change three things that would make your life easier

Albert Bourla: I'll tell you what US should do should stop uh trying with all the heart and brains that they have to put 80% of their effort how to slow down China very big mistake because we will it's a waste of resources and brain power because you will never slow them down the gene is out of the bottle we should put 80% of our focus and effort how to become better than China and for that I know what FISA needs to to do and I know what the US government could do to help us

Nikolai Tangen: But let's move on to leadership. Why are you a good leader?

Albert Bourla: I'm not sure if I'm a good leader, but I'm a leader that change every year. I'm a leader that learns. And uh one of the key characteristic of of a a good manager, it is that uh uh time uh works on him like uh in wine. So makes him better. The moment that I feel that the end of the year I was exactly the same as it was in the beginning of the year, I think it will be time for me to go and retire.

Nikolai Tangen: So Parker rates the wines from uh from 1 to 20. So how do you uh what kind of uh wine rating do you give yourself?

Albert Bourla: Yes, I I would say that one of the 20 is the highest by the way. One of Good to know one of the key characteristics of a leader is humility. So it would be a very bad demonstration of of judgment trying to say but um I'll tell you something that uh I am uh judged by my people every six months. In Fiser we have a system that everybody is uh uh getting a score every six months about specific leadership traits like is he creating a good environment? Is he creating uh is he thinking big? Is he making decisions fast? Uh is he changing his decisions? Is he focusing the organization? Very specific questions. The same for years now. 19 I put that system in place when I became CEO. And who tells if you are a good leader or not? It was the reverse of before. Before we have our scores for leadership that the supervisors will say he's good, he's not good, she's bad. We did the exact opposite. Now the people that are working for you will tell if you are good or you are bad and the people that are working with you the peers. So imagine a fiser let's say span of control of 10 means that every person will get 10 people that report to him and 10 people that they are in the same team with him tell every six months how he's doing in being decisive for example.

Nikolai Tangen: where do you score highest what is your super strength as a leader

Albert Bourla: think big. I'm getting very very good scores. Measure outcomes. I'm getting very scores. Um, very decisive. I'm getting very good scores. Um, speak up. I'm getting uh very good scores.

Nikolai Tangen: have you how has your leadership style developed over years?

Albert Bourla: became I developed more the softest parts of uh of uh uh the manage managerial skills and also I developed um a lot um my my big admiration of culture. Um I believe that uh in a company you need the right structure and then you need the right strategy and you need the right leadership and the right culture. But the areas that most of the companies are spending most time discussing it is the organizational structure which is important but it is the fourth important because it's even more important to have the right strategy. If you don't have the right strategy when no matter how you organize your R&D organization will not be successful. But even more important the strategy is to have the right leadersh because the right leaders and I'm sure you know that better than anybody else can take a mediocre strategy and make it brilliant and bad leaders can take a brilliant strategy and deliver nothing of it. So leadership is probably one of the top. There is only one thing that it is better and more impactful than leadership and this is culture. And you know why? Because at organizational level you can have all the people in this organization of thousands of people to be triple A players. You will have the A+ and the A and the A minus and the B and the C's. But if you have the right culture, the right culture uplifts everyone up. The C's are becoming C++, the Bs are becoming B+ and the A's are becoming triple A's. So um I'm a big believer t