Eric Claassen, CEO Vironovative BV and Professor of Entrepreneurship in Life Sciences at Vrije Universiteit Athena Institute in Amsterdam, and Michaël Mellink, Senior Partner Life Sciences at Odgers Berndtson, continue their conversation on cracking the valorisation code. As a project moves from concept to market, what type of team-members do you need, and when exactly do you need them? You can read the first part of this two-part series, here.
What are the key success factors of a successful drug?
Eric Claassen: Team, team and team. And who’s done it well in the Netherlands? Onno van de Stolpe, the heavy lifter. There are, of course, companies such as Crucell, Genmab and Pharming that have done very well, but consistent performance across multiple companies, long-term, of billion-dollar value, we have only one, that is Galapagos. The rest don’t even come close.
Michaël Mellink: I know it’s no secret that there are a number of drugs on the shelf that have a great deal of potential, but have not actually been sufficiently investigated. This is because their assessment was too limited, or the insight was insufficient, or that simply no money was available.
What kind of team creates a successful drug?
(EC): A good team in this business needs a lot of experience. You cannot set up a biotech / pharma / medtech company with students who have just left the academy. You must also have people with long-term experience in that team who have preferably done the trick twice. That trick takes twelve years on average, to bring a product from concept to the patient in the pharmaceutical industry.
We are talking about people who are a bit older and preferably completely immersed in the industry, perhaps not far from retirement. Often, they are senior ex-corporate people who have never bought a roll of stamps themselves and do not immediately feel at home in a start-up culture. They need to be balanced in that team with others. So you also need people who want adventure and will get that roll of stamps if it is needed. And work through the night with a pizza! "The team must master all aspects of the process" You must have a marketing expert at the start of the product. People think that only comes when the product is finished, but nothing could be further from the truth. You need an industrial expert and an IP expert, and broad IP; at that. Everything from copyright to patents and intangibles. Those intangibles are very important. You need these people from the beginning to ensure that everything is well-protected and usable. You can protect an invention well, but if you don't have the freedom to operate, it cannot be used. Then you must also have someone who is a captain, with a CEO profile.
It is essential to acquire experienced team builders. But it is very important that you get a triple A investor as soon as possible, because then your follow-up financing and success is almost guaranteed.
Should the CSO also be CEO?
(MM): You could say that the CSO is often the CEO at the same time. But does a CSO have the competencies and skills to fill the position as CEO. Or should he/she limit his/herself to the scientific part and tolerate someone who will further develop the market. That is the question.
You must be able to make a division into competencies.
(EC): 1 in 20 fathers of brilliant ideas can do that, 19 out of 20 just can't. Universities should prescribe ‘you can do this, but not as a CEO’. There are some fine exceptions, but many professors who have tried, have failed miserably.
(MM): We’ve talked a lot about team-building and roles, but I’d like to say a little about where headhunters might fit into this process.
My advice is that it is only much later when the company is scaling up, if things start to take off. When making the shift from a lab to a company, one needs to know what functionalities are needed for that.
We now have a company that wants to go to market with a new product, where the organisation must be built. The challenge is to decide which functions are the most important, and which can wait a while. One may need an operational HR person to scale up from 10 to 50 people to ensure that employees have a valid employment contract. Furthermore, it is of course important that you have someone to handle financial affairs and tax payments. That can be a financial manager.
At some point, when a product has a lot of potential and you have to scale up quickly, you have to look for investors. For that you need someone who is financially well-versed, can raise money to get the organisation as large as possible as quickly as possible. Certainly, if at some point there is such an interesting proposition, then the organisation will want to go to the stock exchange. If you want to do an IPO, you need a well-informed CFO. "A headhunter has value when there is already a solid first setting, in which seed money has been collected"Otherwise, you cannot attract the right people that want to take the risk. That market of people is large enough in the Netherlands, but you do not have to limit yourself to it. In the search for talent, it’s a global world.
Read part 1 of ‘From science to entrepreneurship’ now.
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