Mike Ward, Global Head of Thought Leadership at Decision Resources Group, part of Clarivate, chaired a panel of top industry executives at the Anglonordic Life Sciences Conference: Renee Aguiar-Lucander, CEO Calliditas Therapeutics, Steven Powell, CEO eTheRNA immunotherapies and Roel Bulthuis, Managing Partner at INKEF Capital, shared key decisions that shaped the fate of their various enterprises. What would they do differently and what would they not hesitate to do again? We share top takeaways from this insightful discussion.
IPO your business
- Floating your enterprise is a marathon, not a sprint. It requires building relationships with investors, auditors, lawyers while building the organization internally. You need to have these connections and ‘boots’ on the ground and it takes time to build these relationships.
- Whether or not to IPO in US vs Europe should really be determined by the company’s capital needs, the size and maturity of your business and also your existing shareholder base – the need for crossover investors is important. The ultimate goal is to align the business’s capital allocation strategy with its operational strategy: where are your potential competitors and peer group; where is the addressable market and will you need to set up a commercial organization based in the US?
- Always have a plan B: No one can control the markets. Be able to pivot if and when macro events suddenly happen and raise money when you can, not when you need to.
- Current competition in the venture ecosystem is leading to post money valuations that are hard to justify. It is therefore important to balance not ‘leaving money on the table’ with a reasonably modest valuation so that the company can build shareholder value in the aftermarket.
Buy vs Build
- Option to buy rather than build is an intrinsic part of having a plan B
- There are teams that can build the platform to generate the pipeline, while others can run their clinical programmes while looking for in-licensing opportunities. The nature of the executive teams’ is as critical to inorganic growth decisions as the company’s existing platform.
- At later stages, it’s important to build management teams that have the breadth to look at the internal pipeline while still looking at potential licensing deals and acquisitions. And importantly, they should also have a shared ambition to combine these two activities.
Working with founders and management teams
- A hands-on approach to mentoring one’s portfolio companies, however useful to some founders, can actually lead to unnecessary intrusion. Letting management teams do their jobs and trusting them is key to running a successful and diverse portfolio.
- As an investor, one can be supportive and provide ideas but it’s important to respect management team’s independence and encourage their ability to execute. In the end, the teams are the ones running companies.
- When backing CEOs for early-stage companies, it is fundamental to choose someone that not only has the track-record but also the ability to create a culture where the entire team feels empowered to execute their programmes.
Convergence between life sciences and tech
- Twenty years ago, the industry witnessed major VC firms split their tech and life sciences investing arms into highly successful spinoffs. However, the influence of technology, both in hardware and software and in how biotech, medtech and digihealth companies build their pipelines is immense and the need for an integrated investing approach has never made more sense.
- As tech permeates every aspect of modern life, life sciences investment teams will need to be multidisciplinary to ensure they can add real value to their portfolio companies.