Menarini: East of Eden

When Alberto Aleotti began running Menarini in the mid-1960s, drug companies in Italy did not do research, because the country offered no patent protection. He believed patents would be key to the industry's growth, and campaigned for years on the issue. As soon as Italy began issuing patents in 1978, Menarini began doing research. Aleotti expected the work would take time to bear fruit, and so he concentrated on helping foreign partners sell their innovative products in Italy and beyond. Menarini's highly successful co-marketing of Glaxo's Zantac spurred other large firms to seek its help too. They signed deals with no upfront fees, only royalties, and Menarini's revenues and infrastructure grew steadily through the 80s. The company's research efforts advanced in parallel with revenue growth, which slowed with scandal-induced price cuts in the 90s. As yet, the work has yielded little of commercial value-but Aleotti says he expected it would take this long. Marketing remains Menarini's core strength, but changing industry dynamics are making novel products harder to come by. The company considers several of its drug candidates very promising, and is now striving to move them along faster. Industry observers are watching the progress of this exceedingly private firm, which says it will soon announce agreements of great strategic importance.