At the height of Italy’s lockdown in April factories were shuttered across the country. But in Piombino Dese, a small town about20 miles outside of Venice, the hulking glass-cutting machines at the Stevanato Group kept whirring along, spitting out millions of ampoules and syringes. Hundreds of employees donned face masks to work around the clock in three daily shifts, seven days a week – making everything from insulin pen cartridges to miniature glass barrelsand — most pressingly — millions of tiny sterile vials, each one smaller than a single fluid ounce, that one day will house doses of a Covid-19 vaccine.
“Every Saturday and Sunday, even on Easter, I went to work alongside my employees to show that we were in the trenches as well,” says Franco Stevanato, the 46-year-old CEO of the group and grandson of its founder, Giovanni.
Vaccines, like most injectable drugs, need to be packaged in sterile glass. Glass is essentially impermeable to corrupting gases like oxygen while even high-grade plastic lets some air inside. Making these vials was a big business even before Covid-19 appeared in January. Last year, the global pharmaceutical industry purchased some 12 billion vials. The Stevanato Group, a 71-year-old family-owned firm, provided more than 2 billion of those (The company is also the world’s largest manufacturer of cartridges for insulin pens). A Covid-19 vaccine, which likely will have to be administered in two separate injections, will require billions of additional vials. Stevanato expects the pandemic to drive up demand for its glass vials by 20% over the next two years.
“We proactively started to supply our customers with everything they wanted [to fight] Covid-19,” says Franco. “There was no magic strategy. We tried to move quickly and took enormous risks by anticipating some investments, because it was the right time to do it.”
Other than making the actual glass, which they buy from big outfits like Corning and Schott, Stevanato does it all. They design the vials. They make the machines that craft and sterilize the containers. They work with medical regulators in 150 different markets around the world. And then many of their customers use Stevanato-made machines to package the drugs before shipping them to pharmacies and hospitals.
Those machines are a key differentiator. In 2007, when French pharma giant Sanofi needed a supply of sterile syringes that could quickly hit the market, Stevanato developed a ready-to-use syringe that didn’t require any additional sterilization. Stevanato built its own machines to wash and sterilize the syringes and patented the whole process, creating a product line that is now one of the company’s top earners.
“They really value quality and they really value customers and connecting the customer needs to their products,” says Ron Verkleeren, who manages the life sciences division at Corning and has worked with Stevanato since 2011. “That really sets them apart from the competition.”
It’s a solid, if unspectacular, business. In 2019, Stevanato netted $47 million on $675 million sales. Forbes estimates that Sergio Stevanato, the 77-year old company president and son of the founder, owns a 68% stake worth $1.8 billion. Sergio’s sons, Franco (the CEO) and Marco, the 47-year-old vice chairman, run the place now. Each own 16%, worth more than $400 million apiece.
Big changes are afoot. In June, the group raised $59 million in a private debt placement, the first time the company had ever sought outside funding. They plan to use the money to develop wearable medical devices and machines to automatically assemble them. And the family has plans to take the company public within the next three years.
“The banks we’re working with want us to go public earlier, but I want to do it when I feel sure, regardless of Covid-19,” says Franco.
Stevanato has been ramping up for a Covid-19 vaccine for months. The firm hired more than 580 new workers in the first six months of 2020. In late June, Stevanato signed a deal with Norway’s Coalition for Epidemic Preparedness and Innovations (CEPI), a Gates Foundation-backed group that is assisting with scalingnine different Covid-19 vaccine projects — including efforts by Boston-based biotech Moderna and Oxford University — to supply 100 million borosilicate glass vials for up to 2 billion doses of vaccine.
Borosilicate glass can withstand much higher temperatures than other types of glass and is more resistant to external chemicals, making it the glass of choice for sensitive medicines like vaccines. Stevanato is also supplying several other significant vaccine efforts it can’t currently disclose, along with 30 more in early stages of development. Altogether, that’s more than a fifthof the 176 vaccines in the works around the world.
“We talked with every glass producer and the Stevanato Group was the only group that still had uncommitted glass [vial production] capacity,” says Jim Robinson, deputy chair of CEPI’s scientific advisory committee. “They had the prize that everyone wanted.”
Vaccines face much tougher regulatory barriers than most other medicines and need to be stored in sterile glass vials and syringes, says Verkleeren of Corning. “A lot of drugs degrade in the presence of oxygen. It would take millions of years for one molecule of oxygen to permeate glass, and it would take minutes for it to go through plastic,” he says. “Quality and sterility are really, really important, because if it’s not sterile, or there’s a quality problem, and you’re injecting something into the body, it can be very, very serious.”
The Stevanato Group was founded on the outskirts of Venice, a city with a long tradition of glassblowing, in 1949 to make bottles for wine and perfume. The firm, originally called Soffieria Stella, grew as the postwar Italian economy boomed. By 1959, they needed more space so they relocated to Piombino Dese, an industrial town situated on the confluence of five rivers.
As food producers began to switch to plastic in the 1960s, Giovanni Stevanato took a risk and doubled down on glass, developing a machine capable of rapidly producing containers from glass tubing at scale. The 3BS machine, named after Stevanato and his three co-inventors — Bormioli, Bottaro and Bardelli — enabled the firm to double production and target a new market: the growing pharmaceutical industry. In the early 1970s, the family shut down Soffieria Stella entirely, cementing its pivot to medical glass packaging.
“The first decades were very difficult,” says Franco, particularly because the family shunned outside investment. But they made headway. “By making our own machines, we could produce 50% to 60% more than our competitors. Because my father reinvested all our profits into the company, we could advance our technology faster than the others. [They] would buy their technology in Germany, but we could double their production with the same number of employees.”
Franco and Marco entered the family business in 1998 in their mid-twenties, two years after the death of Giovanni. The first order of business: rebuffing a series of acquisition offers from larger competitors. The second order: Expanding the company abroad. In 2008, the family opened its first overseas plant — in Monterrey, Mexico — to target the North American market. Stevanato now has a network of 12 factories on four continents. In 2016 the group entered the U.S. for the first time, via its acquisition of German plastic packaging firm Balda for $112 million, which has two facilities in southern California.
One advantage of providing complex, specially designed packages is that they are patented and included in the regulatory approval process for new drugs, meaning that pharmaceutical firms must use the company’s packaging for the duration of the product’s lifespan. According to Aaron DeGagne, healthcare analyst at Morningstar, this effectively locks in business for decades, because drug producers often continue to use the same packaging—even after the medicine’s patent expires and it becomes a generic drug.
Spinning a sleek, Stevanato-made insulin pen between his fingers during an interview via video, Franco spells out a future in which his family firm expands into more complex products. “Now we have [insulin] pens, and tomorrow the devices will be more self-medicating, analyzing…and much more evolved,” he explains. For example, a cancer patient may be able to self-administer drug infusions at home. “This is the big challenge we want to dive into over the next 10 to 20 years.”
I cover billionaires and their wealth for Forbes. In the past, I’ve covered everything from oil & gas for Bloomberg News to the 2014 Indonesian presidential election for the Jakarta Globe. I’m a graduate of Columbia Journalism School and UC Berkeley, and my work has also appeared in the Houston Chronicle, the Calgary Herald, and more…