Billionaire's race for life

CONCEITED chief executives like to borrow their imagery from the world of sport so they can boast about 'focus', 'performance', 'winning' and other such buzzwords. The fact that they are often rather corpulent is an irony that escapes them.

But when Ernesto Bertarelli, the 38-year-old Italian billionaire who heads the $12bn (£7bn) Serono biotech enterprise, talks about his industry as a competitive sport with 'every inch worth taking', his words carry a certain authority.

He is, after all, the head of the Team Alinghi syndicate and navigator of the crew that brought the fiercely-fought America's Cup - yachting's greatest prize - back to Europe for the first time in 152 years.

This means that Bertarelli - who is definitely not corpulent - can use a few sporting metaphors without ridicule. The America's Cup is one of sport's toughest challenges. You do not win it by luck.

'One has to navigate with intelligence in every aspect of the biotech industry, from securing the space for a new discovery, to writing the patent, developing, manufacturing, marketing and selling the drug. It is not just deal-making, you have to be smart at every stage to win,' he says.

His involvement in the cup is not merely playtime, but a powerful metaphor for the American dynamism and competitive spirit he has injected into the Geneva-based Serono since his father died and he became chief executive in 1996.

But at the moment, it's not plain sailing. Its shares shot past rivals' in 2003, but have fallen this year on fears that its top-selling drug Rebif, a treatment for multiple sclerosis, will be hit by a new drug, Antegren, which is expected to be launched next year.

Forecasts are for Rebif to count for nearly half Serono's $2.3bn revenues this year. Antegren, developed by Irish drug maker Elan and its US partner Biogen-Idec, is based on a different mechanism, thought to be more effective at the advanced stages of MS.

Analysts are bullish on prospects for Antegren, and so they blow cold on Rebif.

Biogen is already Serono's deadliest rival in the $3.6bn world market for multiple sclerosis treatments. Its Avonex, commands a 37% market share in the US, against Rebif's still relatively puny 15.7%.

US sales of the drug, albeit the fastest growing in that category, have so far failed to meet high expectations. But Bertarelli is bullish and says: 'We will prove them wrong about Rebif and wrong about the potential of Antegren.

'Just as they initially said Rebif would come into the American market and overnight dominate it, so they are making extraordinary claims for Antegren, when it is still only an early stage.'

Bertarelli still insists that Rebif will be the top-selling drug for MS in America by 2006. 'I do not manage my company on the basis of analysts' opinions,' he says. 'If they are disappointed with 55% growth of sales of Rebif in the US, that is an issue for them, not us.'

In an effort to boost the share price, Bertarelli unveiled a $590m share buyback. With $2.5bn of cash available, Serono was tipped to grab Britain's Celltech, which eventually went to Belgium's UCB for a bargain $1.53bn.

Bertarelli is now under pressure to do something more creative with the company's cash than mere buybacks. Of course, the analysts would be more than happy if Serono came up with the Holy Grail - a cure for cancer.

Given that his father died from the disease, it would certainly be an astonishing twist. So what are the chances?

'Basically, we focus on growth and death of cells - well that is cancer,' he says. It was a revelation for me ten years ago when my father was dying and he came into my office and showed me a scan of his DNA - 22 chromosomes all fragmented, his DNA completely scattered.

'I have a vivid image of it in my mind. It was like looking at broken glass. He said: Look at this...that is why I am dying. That's why our research makes cancer an obvious target.'

His workaholic father's mantra that man must work and lead a productive life, no matter what his economic circumstances, made a profound impact on Ernesto.

He admits: 'I do not enjoy everything in the job. But I love the challenge. I am very active and intense, but I do not think I am a workaholic.

'My father worked hard, but that is all he did. I realised early on that that has limitations. You miss life. I don't want to be like that.

'I knew my father through work alone. I don't want to be like that with my children.'

Bertarelli lives in Geneva with his beautiful English wife, Kirsty, a former Miss United Kingdom, and two children, one aged three the other nine months. He is incurably European in culture and his refined lifestyle. But in the way he works, he is strictly American 'can-do'.

'I believe that you have to take decisions, not just sit on a fence,' he says, 'even if some are the wrong decisions, as long as you get more right than wrong. Be proactive.

'In Europe, people say, that is the way things are, and then they do nothing. That is why we are losing competitiveness.'

You would think that with his wealth and power, Bertarelli would be ultra-confident. But he admits to waking each morning full of fear. 'Only a fool does not have fear - that is what gets us going,' he says.

So what does he fear? 'The healthcare environment in Europe. The ever-higher hurdles for regulatory approval, the negative image of what we do and misunderstanding of what we bring to society.'

While treatment for cancer would be rushed through regulation worldwide, Bertarelli is cynical about how European regulators would respond to a new drug for obesity.

'I am not sure they would welcome it,' he says. 'They would say it is a lifestyle issue.'

Meanwhile, he is preparing for the next America's Cup race, which sets off from Valencia in 2007. It will take someone exceptional to beat him.