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European Pharmaceutical Contractor

Finding a Figurehead

Without exceptional leadership talent, the value of intellectual property (IP) in biotechnology companies would be unrealisable for investors. Some may regard this as controversial, but latest research and knowledge from the investor community leaves no doubt. Using data from EvaluatePharma and other industry sources, RSA analysed 551 venture-backed biotech companies and their strategic transactions, including 3,105 licensing deals, 178 initial public offerings and 629 merger and acquisition transactions. The report profiles 10 chief executive officers (CEOs) accredited with driving biotech success – identifying their key traits – and picks out the top 25 venture-backed biotech firms from over the last decade.

Growing Pressure

One key driver is the rapid growth the industry continues to experience, and the challenges of finding the best people to help maintain this momentum.

Last year saw venture firms plough $6.55 billion into the biotech sector, with Europe alone seeing a year-on-year increase of $1.24 billion in investment. The figures tell a story of renewed interest in the life sciences: more deals, more partnerships and more investment.

With the initial impetus coming from the US, Europe is now benefitting from a broad range of new investment models, including crowd funding, angel investment and specialised crossover funds. Venture capitalists and public companies acting as operational investors are also active in growth areas of the life sciences, such as personalised medicine. New patient capital investors – Woodford, for example – are breaking the old model of 10-year fixed funds and investing for the long-term.

This diversified market is enabling biotech firms to raise funds for small- and large-molecule therapeutics, as well as devices, digital innovation and healthcare data.

Given this vibrant environment, it is easy to underestimate the essential value that biotech leaders bring. Without being able to match talented leadership with the burst of funding and innovation that is driving the industry, there is a risk that the sector will not fulfill its true potential.

Equation for Success


While it is true that investment fuels the biotech industry, and intelligent business models allow investments to grow, it is the equity value of talent – combined with IP – that investors pay so much to own. The fusion of these vital ingredients underpins the creation of real value and is what makes biotech work.

Valuation of IP is familiar to every biotech investor and careful due diligence is essential before putting money at risk. As people are essential to that success, the same professional due diligence is necessary when assessing biotech leaders and their teams. Quite simply, IP and talented people are two equal parts of the equation; without one, you will struggle to make the most of the other.

Bringing business leaders into a company can and should be led by due diligence. Investors and company management need decision support and comparative analysis of talented candidates.

Many firms focus on hiring costs (due diligence), rather than the long-term value of the talent they are searching for. This is the opposite of how they think about their R&D assets. To be fair, this behaviour has been made worse by the many executive search firms that only have access to limited database information on executives as their key proprietary assets. The RSA report into assessing talent explains why deep analysis and due diligence provide decision-makers with valuable intelligence when searching for new leaders. Actively discovering and developing top talent is a never-ending task for any company that aspires to be the best.

For the Long-Haul

When looking at Europe’s leading CEOs, the importance of staying power and a long-term commitment is evident. Many of the most successful CEOs are either founders or very early hires into the business. True entrepreneurs have a long-term perspective; they are committed to their cause and take the view that: ‘It will be good in the end – if it is not good now, then it is not the end’. Investors, both private and public, have supported those CEOs over the long-run. This has often been through substantial challenges, requiring changes of strategy, a refocusing of science or a rethink of business plans.

The leadership of a strong CEO through both good and difficult times has, as analysis shows, proven to be one of the most significant factors in building value. This long-term view is what sets the success of this group apart. The triumphant CEO will always be looking at the long-term value and objectives of their firm.

It is important for CEOs to be multifunctional. Being able to show strong leadership across a variety of technical, commercial and operational activities is invaluable. But CEOs cannot and should not do it all, so to accelerate growth they need to have the ability to build the right teams, recognising that other people are also critical to success. Quality people are capable of increasing the value of IP assets, but rarely do great assets succeed without quality people. Company leadership is key to the organisation’s ability to raise funds and deliver on the business model.

Commercial Nous


Combining financial acumen with an understanding of the technology itself is also essential. In this sector, the CEO’s role revolves a great deal around fundraising, so it is vital to be able to demonstrate intelligent use of funds to develop assets quickly and efficiently. Equally, it is also important for the CEO to explain the science that underpins the firm clearly.

Many of the top 10 CEOs highlighted in the RSA analysis are able to bridge the science, financing and profitable aspects of their businesses to give investors total confidence in their leadership capabilities. The top CEO cohort has sailed both calm and choppy waters using commercial knowledge and deal-making skills to guide themselves and their companies. This is not something that can be left until the IP is complete. Today’s highly partnered and deal-rich environment requires commercial strategy to be built alongside – and to influence – the science.

Note

This article is based on the RSA Talent EquityTM T VC Report and RSA Talent EquityTM T CEO Report. Both reports are accessible via the following link: www.thersagroup.com/ talent-equity


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Chris Molloy is CEO of RSA, a leading global Life Sciences Executive Search and Interim Management specialist group. He has over 25 years’ executive experience of international life sciences across pharmaceuticals, biotechnology, informatics and start-up sectors. He began his scientific career in 1990, leading multiple in-house and collaborative research projects at GlaxoSmithKline (GSK). Leaving GSK in 2004, he moved into biotech and to Asia as Chief Operating Officer of MerLion Pharmaceuticals. During this tenure he was responsible for business planning, operations, business development, licensing, fundraising and M&A. Returning to the UK in 2008, he became Vice President of Corporate Development at IDBS.
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