Bought a tablet factory – and built his own empire

In 1995, Thomas Eldered was CEO of one of Pharmacia’s factories in the Stockholm area when the Swedish pharmaceutical giant, after a takeover, decided to move its production abroad. 34-year-old Thomas was facing an imminent risk of losing his job. However, instead, it actually turned out to be the starting point for one of the biggest success stories in Swedish life science.

Life Science Sweden met Thomas Eldered at the office of his venture capital company Flerie Invest at Skeppsbron in the Old Town in Stockholm. It was a hot summer day just before the holidays, and he recently presented the newly started pharmaceutical company NorthX Biologics to the Board. NorthX Biologics shall produce advanced biological medicines on behalf of Swedish and international biotech companies.

Lars Backsell was one of the board members. He was just on his way out of the fancy but sparsely furnished office.

Lars has been visiting and it was much appreciated,” said Thomas before we settled into one of the rooms.

Thomas Eldered and Lars Backsell have worked side by side on the most important business project of their lives. Together, they have received awards from the Swedish Royal Patriotic Society and EY Entrepreneur of the Year. Their business journey started in a factory with around 130 employees. Much later, when they sold their company, it employed 9,000 people in 10 countries and distributed products to more than 100 different markets.

Let’s jump back to 1995. Thomas Eldered was a civil engineer with a degree from Linköping University and had been Site Manager for a factory for a few years. The facility is located in Årsta in southern Stockholm, and at the time, it was owned by the pharmaceutical group Pharmacia, Sweden’s then largest pharmaceutical company alongside Astra.

It was probably youthful optimism that made us start Recip

A couple of years earlier, Pharmacia made a major acquisition in Italy, and now the group management had decided to close down the factory that Thomas Eldered was managing and move production to Italy. Thomas Eldered did not know Lars Backsell very well, but the two had enjoyed a work connection, as Lars was Head of Pharmacia’s Self-care, which manufactured some of its medicines in the factory that was threatened with closure.

However, Pharmacia’s management had worrying plans other than just for the factory. The Self-care section was facing major restructuring, and Lars was also in danger of losing his job.

Lars and I reviewed our options and concluded that we should propose to Pharmacia that we buy the plant in Årsta. It was an opportunity for us to create something new. It would also solve a number of problems for Pharmacia, above all, they would avoid laying off staff. Besides convincing Pharmacia to let them buy the factory, they needed a substantial bank loan, which they also managed to land.

It would also solve a number of problems for Pharmacia, above all, they would avoid laying off staff

However, sceptical voices were raised. The two entrepreneurs lacked a long-term business plan, and furthermore, the factory lacked the resources that Pharmacia’s previous headquarters had offered: marketing, IT support, administration and more. Some people simply found the situation too uncertain, and they thought it safer to stay with the large Swedish company Pharmacia.

Nonetheless, Pharmacia was bought out and moved abroad, while we stayed in Sweden and expanded,” notes Thomas Eldered, not without pride.

Despite moments of concern, the vast majority of employees chose to remain at the factory and work at Eldered’s and Backsell’s new company, which was named Recip. In the first years, their plan was to manufacture medicines on behalf of Pharmacia, but their next moves were still unclear.

We had several ideas, but it soon became clear that they were not optimal, and in some cases, we were too early,” says Thomas Eldered.

He says that he and Lars Backsell believed the pharmacy monopoly would be abolished, and they built their ideas around that. However, there was a time horizon of many years before the pharmacy market would be reregulated and private pharmacies allowed, so those plans were scrapped.

Thomas Eldered

Age: 61.
Family: Wife and two adult children.
From: Sundsvall.
Lives: In Nacka outside Stockholm.
Education: Civil Engineer specialised in industrial economics at Linköping University.
Current occupation: Chairman of the Board of NorthX Biologics and founder of the investment company Flerie Invest.
Last book read: The Fallen Empire by Martin Kragh. “Interesting reading that paints a picture of why things have turned out the way they have in Russia.”
Last watched film/series: “I rarely watch series, but I may go and see the new Top Gun”.
Motto: “You can do more than you think, which does not only apply to me, but also to others.”
Interests: “Family, mountain hiking and skiing. I also enjoy my job, and have always devoted much time to it.”
Favourite place: The Swedish mountains.

The initial assignments for Pharmacia gave the two entrepreneurs time to think and try their hand at the business. They established a research department and developed their own products, traditional drugs, as well as non-prescription drugs and prescription drugs. Their first own product to be produced was a food supplement with folic acid.

When asked about his motto, Thomas Eldered says at first that he has none, but after a short moment thinking, he says:

You can do more than you think. That is my motto, which has guided me throughout my professional life, and this applies not only to me but also to others.”

He says that they enjoyed strong support from their employees at Recip right from the very beginning, and that everyone chipped in with tasks that no one at the factory had tried before. These were tasks that the previous head office had taken care of, such as marketing. He and the employees could and did manage much more than they had thought possible.

It was amazing to see how the whole organisation took on the task with great enthusiasm when we started in 1995. Naturally, some things could have been done better, but overall, it was magnificent to see that when you empower your employees to solve tasks, they will generally succeed somehow. We have carried this principle with us all along. When I left last year, we employed 9,000 people and had manufacturing in 10 countries, and yet, we tried to organise the business so that our subsidiaries would have a concept similar to what we had in 1995 when we started: to empower people to do things they have never done before, and it has been very well received.”

It was magnificent to see that when you empower your employees to solve tasks, they will generally succeed somehow

In the first years with Recip, Thomas Eldered and Lars Backsell contemplated their business strategy thoroughly.

One of our development paths was based on the idea that as we were manufacturing pharmaceuticals on behalf of Pharmacia, other pharmaceutical companies might need help with manufacturing as well.”

Time would soon show that they were right. Manufacturing on behalf of other pharmaceutical companies turned out to be a winning concept, and the two founders eventually decided to focus entirely on that idea and to sell their own products business unit. In 2007 they did just that, and at the same time, they changed the company name to Recipharm.

When Recip started with contract manufacturing of pharmaceuticals, the concept was not nearly as widespread as it is today. The company became pioneers in the field and can probably take some of the credit for life science contract manufacturing developing into an industry of its own.

From the time Recip was founded in 1995 to the name change in 2007, a lot happened in Swedish life science. In the same year that Recip was founded, Pharmacia was already merged with American Upjohn and was eventually bought entirely by Pfizer.

In 1999, Astra merged with British Zeneca, and the head office moved from Södertälje to London. However, Recip remained in Swedish ownership and kept growing. In 2014, Recipharm went public and gained many new shareholders, but the founders were still majority owners.

Only last year – after 26 years – the two founders left their company, which happened after they, together with the venture capital company EQT, made a bid for Recipharm, the entire company was valued at almost SEK 25 billion. The purchase was completed in early 2021.

Lars and I were looking forward to continuing our involvement at Recipharm, but it didn’t turn out that way for various reasons. Now we have left the company completely in EQT’s hands, and maybe that’s just as well.”

I have always been amused by creating and building, but I did not see this coming

Is it a coincidence that Thomas Eldered became an entrepreneur? Yes, it was a bit of a coincidence, he admits and adds:

I have always been amused by creating and building, but I did not see this coming beforehand. The opportunity arose, and Lars and I were convinced that we could build something together. This happened at a time when we didn’t have much to lose. Had we not invested, we would probably have been out of a job. I guess it was youthful optimism that made us start Recip.”

Thomas Eldered grew up in Sundsvall. His father was employed in the forestry sector, and his mother was an assistant nurse. Thomas remained in Sundsvall until it was time for military service, during which he was stationed with the Air Force on Frösön in Jämtland, Sweden. He is not particularly interested in talking about his childhood or any other private matters, and he quickly changes the subject when it comes up.

However, he has recently renewed the connection to his childhood city of Sundsvall, as Chairman of the Board of NorthX Biologics, the pharmaceutical company that aims to put Medelpad on the map as an important life science region. The company collaborates with the state-owned company Vinnova, which the government has commissioned to establish an innovation hub outside Sundsvall. The government was very proud when the investment was presented together with Thomas Eldered at a press conference last year.

Nowadays, Thomas Eldered runs the investment company Flerie Invest, and NorthX is one of the company’s more significant investments. The office in the Old City in Stockholm employs five people and also a number of people attached as advisers.

What criteria do you have for investing?

It must be something that we understand. We stick to life science and basically only to pharmaceuticals or pharmaceutical support, such as interesting new therapies, biological drugs and other exciting projects.”

Artikeln är en del av vårt tema om News in English.

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