Stephen Stead has worked his entire professional life in the pharmaceutical industry, in a wide range of positions covering not only general management but also commercial and technical responsibilities.  He first got to know Advent by helping us source and evaluate potential acquisitions in Eastern Europe.
After successfully turning around, restructuring and rebuilding Romanian pharmaceuticals business Terapia, he took the reins of Poland’s largest pharmaceutical company, Polpharma, overseeing a successful buy-and-build strategy.

Stephen is now back working with Advent as CEO of portfolio company, LaborMed, another Romanian pharmaceuticals manufacturer, looking to deliver similar stellar financial and operational performance in the rapidly developing Central and Eastern European market

I’m a pharmacist by education and I spent a lot of time with originator companies such as Smith Kline, Boehringer Mannheim and Glaxo, both in technical and commercial roles. I started out in the UK, but I’ve also worked a lot internationally with those companies, taking on a variety of posts running businesses in many of the Central and Eastern European countries.

When the Berlin Wall fell, I was working for SmithKline Beecham in their Middle East and Africa division, but I fancied a change. The whole region is a blossoming and fast-expanding market with a great culture and a rich history – and I wanted to play my role in developing the business culture. So since 1991, I’ve been living and working in Central and Eastern Europe, building and restructuring businesses for both mainstream multinational pharma companies as well as the generic drug producers. I am a great believer in learning by doing and building on experiences gained.

By 2002, I was working as an independent consultant trying to leverage some of the skills I’d gained during my career. Through a process of networking and business development, I got in touch with Joanna James (a managing partner at Advent and co-head of Advent’s Central European programme). Initially, I was working on projects helping them to source acquisitions in the region.

That led to a number of due diligence exercises, which included work on the acquisition of Terapia – and me going onto the board of the company in the classic operating partner way. Then when I was asked to find senior management for the company, I volunteered to actually run it – which is how I came to be CEO.

An operating partner needs to be a bit of a Superman. You have to be able to turn your hand to anything and everything, to be flexible and pragmatic – and at the same time to focus on the results that need to be delivered. So my role varies from doing the standard, consulting-type work; business analysis; due diligence work, which generally has to be completed in a very tight time-frame; and then operating and running businesses, which is probably my core strength.

At Terapia, which is Romania’s largest generic drug producer, we had a major challenge in cleaning up what was, to be frank, an environmental disaster area. It was an enormous civil engineering project – and I’d never done anything like that before.There was also the challenge of building up from scratch an effective sales and marketing division able to deliver results.

There was an awful lot to be done. But it was all out in the open, the issues were very obvious. So the role was project management, identifying the resources we needed to execute the plan, then rolling up our sleeves to get on and do it.

Here at LaborMed, it’s building a functioning commercial team in a fast-changing environment.LaborMed was set up to deliver unbranded products, and this is now a branded, and more regulated, environment. At the same time, there are challenges in getting below the initial due diligence and sorting out the nitty-gritty problems in how the business runs. We have to make sure the existing team harmonises with the new team and that they are able to work together to deliver a new vision and a new business plan.

I enjoy being put on the line, but then having the freedom to act – being given total responsibility for delivering the results that are expected. I also enjoy living in Romania – it’s a very nice place, I like the people and their can-do attitude. And I like very much the trust that’s given to me by the local Advent team, the mutual respect that’s developed. There’s a focus on delivering results. There’s no fuss, no BS and no politics – just get on and do it.

The big challenge is being able to deliver results that are above the norm, in a short period of time. For example, we’re planning to grow LaborMed by a factor of three over the next four years or so, in a market which is slowing down. In Terapia, we doubled sales in two years, while at the same time running a number of projects to completely restructure the business – there was real time pressure. So it’s being able to deliver tangible results in line with high expectations in short order.

There are two operating partner types. One is mine, where you’re fully integrated running the business; the other is where you’re more of an adviser, overseeing the operational activities and usually taking a seat on the board. There is a difference. I’m very much an operational, “get stuck in and do it” type of person. If you’re doing my kind of work, you have to be able to go out on a limb – to not be frightened of building things up from scratch or developing the people within the business.

You also have to be prepared to work without much in the way of corporate support. Like a lot of operating partners, I’ve had a career in big companies where there’s a lot of back-up. But Advent often buys companies that need either fixing or growing, so you have to be able to come in and make change happen yourself. You have to find that support, work out what needs to be done and deliver results. It demands a high degree of practicality.

You have to be ready to take on a challenge and to give 100 per cent of your time and energy – to really want to create or build something, and to see results. You have to be focused on the outcome – to understand the magnitude of the challenge and work through the people in your team to deliver the results that Advent and their investing partners want.

You need people who are confident; who have an ability to rise to a challenge; who can fit into, or change, the culture of the company they take over; and then to deliver results. Any investor needs to see the financial return – so you have to be a bridge between that objective and the people within the company. There has to be this moderating role between what can be done by the people and what results are required.

Experience is a big plus. I have an innate feel for the industry, having been in it for a long time. Although I don’t use my pharmacological training on a day-to-day basis, it helps to be able to feel the business in that kind of context. And I think that’s something Advent is looking for: they want you to be able to give an immediate opinion, to be able to say whether something looks and feels right – to communicate the big picture as well as understand the detail.

After Terapia, my first choice had been to work with Advent again. But a deal we’d looked at in Turkey hadn’t come off and there were no more relevant opportunities for them in the region. So I networked my way back into Polpharma, which had been an unsuccessful bidder for Terapia, and the shareholder asked me to be the CEO.

After we’d worked on a major merger, there was this opportunity to come back and work with Advent – and I jumped at the chance. I have a great deal of respect for the team and I’d enjoyed my time with them while I was running Terapia. So I elected to leave and work at LaborMed with Advent – and look at other potential acquisitions they could be making.