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Prove yourself through action.
This concept from Japanese culture was what AJ Vaccines CEO Ole Vahlgren took with him from his time as head of Otsuka Pharmaceuticals.
For this reason, he and AJ Vaccines have not appeared much in the media since he took over the helm as CEO of the former state-owned vaccine factory in February 2022. There were simply elementary things that needed to be fixed in the company before Ole Vahlgren’s start as CEO could be called a success.
Since the Danish state sold the vaccine factory to Saudi Arabia’s Aljomaih Group in 2016, the company has lost USD 200m in pure losses, with 2020 and 2021 being the worst years financially.
”There was a distinct lack of communication across the company. There was a lack of synchronization, and the classic outcome of poor communication is dissatisfaction, a lack of credibility, which leads to more mistakes,” Ole Vahlgren tells MedWatch about the early days at AJ Vaccines.
In his first year as CEO, he has proven himself through action, but he believes he has not yet reached his goal.
The deficit has been nearly halved from USD 70m in 2021 to USD 39m in 2022, and this has not been achieved through layoffs, efficiency improvements, large investments or higher demand. The only thing Ole Vahlgren has focused on is strengthening communication between employees and creating what AJ Vaccines calls horizontal alliances.
”Basically, we haven’t gotten any new customers, we’ve just delivered what was in demand. And then we made a plan, communicated it transparently and followed it,” says Ole Vahlgren.
”Fixing the plane while flying it, solely through communication, commitment, transparency, stability, the desire among employees to be here,” he elaborates.
Phase 2 and 3
Ole Vahlgren calls the first step on the road to a bottom-line profit stability. In order to find the next USD 40m on the road to profitability, Ole Vahlgren says that AJ Vaccines must find ways to increase internal productivity.
”Now we’re going to embark on what you could call innovation, and that’s pure process improvement. We need to be even better at planning and we need to be even better at selling. We need to figure out how we can be competitive in new markets and how we can get more out of each employee.”
The plan further down the road, the third step in the grand plan for AJ Vaccines’ success, is to invest more money in research and development.
”We’re thinking a lot at the moment about balancing the books on operations. You can’t have a business that is losing money on ongoing operations. Once we have that, we can start investing more money in R&D, because we already have some great ideas on how to improve our existing products”
Ole Vahlgren himself took the job at AJ Vaccines because he saw a potential in one particular AJ molecule, BCG, which is marketed as both a vaccine against tuberculosis and bladder cancer.
”I believe that there is another level in BCG and that we can, for example, make a recombinant version,” says Ole Vahlgren, adding that the molecule has shown a fundamental strengthening of the immune response in patients.
For this reason, Ole Valhgren believes that the drug can be advantageously combined with other drugs, which could mean a far greater potential, and thus also sales, than it currently achieves.
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It’s important to open up - not to put on a showcase or tell people how amazing we are, because then we would have waited until we had a surplus. We want to be a part of the overall ecosystem
Ole Vahlgren, CEO, AJ Vaccines
AJ Vaccines is already in contact with a potential partner who can deliver on the CEO’s wish, but at the end of the day, research and development funds will still be small in the coming years. A profit simply has to be made first.
”You’re not going to get anyone to come and talk loud and long about the third step until you’ve demonstrated that you can actually deliver on step one and step two. No one wants to listen to that. How can I convince people that we need USD 30m to run an R&D project if I’m losing over USD 20 million on operations?”
A new communication strategy
Another part of Ole Vahlgren’s transformation is as much external as internal. AJ Vaccines has not been very visible in the public, but this is about to change. Communication has already been strengthened, both on Linkedin and now with interviews with this media.
”It’s important to open up - not to put on a showcase or tell people how amazing we are, because then we would have waited until we had a surplus. We want to be a part of the overall ecosystem,” says Ole Vahlgren.
At the same time, transparency is important in Ole Vahlgren’s management philosophy and outlook. Transparency is a word he returns to several times during the interview.
”I think it’s really important to be consistent in what you say internally and externally. So basically, I don’t want to say a lot internally that I don’t want to say externally, and vice versa. It’s really a philosophy I have because you have to be accountable for it, whether it’s one way or the other. So once you start communicating things internally, and if you really believe in it, then you can communicate it externally,” says Ole Vahlgren.
Ole Vahlgren emphasizes that as CEO, he has not been subjected to any kind of silence or censorship from the ownership in Saudi Arabia. He is in complete control of that.
”I have to represent the company and do the right thing for the company, and I think the right thing for the company is for people to know AJ as well as possible. Also for new employees who come in, so that they are not surprised by what AJ is for a company,” says Ole Vahlgren.
Ownership up for debate
The Saudi ownership of vaccine factory has created both headlines and debate.
For example, since 2017, Danish news paper Ekstra Bladet has dealt extensively with AJ Vaccines’ ownership, where everything from special agreements on rent, corona aid packages and more in-depth articles about AJ Vaccines’ Chairman of the Board Abdulaziz Hamad Aljomaih have been turned around in the tabloids.
According to Ole Vahlgren, it is of no importance to him as CEO that the ownership is Saudi Arabian. His interactions with the owners on the board have initially been sparse, even more sparse than the boards he himself sits on. But he doesn’t get tied down in any way.
”Is there anything I really, really want to get on with that I’m not allowed to get on with? That’s one of the questions I ask myself when I measure my board. The other question I ask myself is, is there anything I don’t want to do that I’m being forced to do? And I can say that there are zero and zero on both sides of that list,” he says.
However, Ole Vahlgren admits that not everything is 100% on that front. He would like the board, which currently consists of five men, all from Saudi Arabia, to have a little more weight in the form of industry experience.
”If I were to adjust over time here, I think that in reality, every top manager needs to be challenged, needs to be asked critical questions. It’s not just in governance, but you need to have someone who can challenge you strategically,” says Ole Vahlgren and concludes:
”Now it’s not the CEO who has to put together the board, but if we want to move up to level 2 and 3, as we talked about before, then I think it would be beneficial for AJ’s board to expand with new competencies.”
And the new competencies could very well be female. Ole Vahlgren makes an appeal to all life science women: If you want a seat on the board of AJ Vaccines, get in touch.
Ole Vahlgren, CEO, AJ Vaccines