Life science leaders give valuable advice on surviving a downturn
The final panel at this year’s Anglonordic Life Science Conference was led by Mike Ward, Global Head of Life Sciences & Healthcare Thought Leadership at Clarivate, who asked life science leaders for their wisdom on the subject: “If I knew then, what I know now.”
The expert panel had a wealth of experience to draw on: Niall Martin, Chief Executive Office of Artios; Dan Mahony, Chairman of the UK BioIndustry Association; Eva-Lotta Allan, Chair of Draupnir Bio; and Stephanie Leouzon, Managing Director, Healthcare Investment Banking at Stifel.
A key focus was how to survive in today’s challenging market conditions, writes Optimum Communications Account Director, Jonathan Edwards¸ who attended.
Patience and resilience are key
The best place to start might be at the bottom – but it is also the hardest place to be, as raising money can be a real challenge, warned the panel. It may well take longer to achieve ‘success’ than you thought. In such circumstances, it’s vital to be patient – although not passively so – and resilient. Keep networking, keep knocking on doors to get the investment you need. Sometimes that’ll mean knocking on the same doors, time and time again. Once you’ve raised the funds, you’ll be confronted with a new set of challenges – how to put that money to the best possible use to drive the business forward.
Accept that raising money will prompt difficult questions about your business and its management team. Is fundraising possible with the current management team in place? Are new people needed to bolster efforts to raise sufficient funds?
A problem shared is a problem halved
Remember your non-executive directors. They can help think through a company strategy in a more detached manner, bring fresh perspectives and calmness to the board. They can also help mentor the team, and in particular first time CEOs, as well as acting as diplomats between different stakeholders.
Spend or save?
Management teams need to know when to prioritise spending, and when to keep some money back. Sometimes you need focus, and sometimes you need to keep your options open.
Choose your targets carefully
Should you focus on your single best asset? Or hedge your bets by developing several simultaneously? It’s a balancing act. Time is money, so the more time you spend developing an asset, the more money you’ll spend. Investors used to look for ‘best in class’, now it’s ‘first in class’. Ask yourself: what really sets this asset apart from the competition? That’s especially important when a company has two or three assets it is trying to take forward – but only limited time and money. If you are developing a clinical platform, make absolutely sure that platform works before focusing on what appears to be the golden nugget.
To IPO – or not?
There’s no straightforward answer to this question. If you can raise the right amount though an IPO, said the panelists, then it’s likely you’ll make it through these difficult times. Going public can give you relatively quick access to large amounts of cash, which can help you grow. But with a public listing comes added regulatory responsibilities. Staying private enables firms to fly under this ‘regulatory radar’ for longer.
If you are looking to IPO ask yourself some hard questions. Why do you want to go public? Where do you want to list? If it’s the US, why – Is it resources, staffing, bringing in US investors? Do you really need the liquidity an IPO promises, or can it be achieved through other means? Timing is crucial. Is this the right time?
Partnerships: prepare yourself
Know what you are getting into. Try to avoid outsourcing lead programmes. For those that are outsourced, originator companies should aim to retain some rights, for example by co-developing, or by reaching royalty or milestone agreements. Enter a partnership hoping for the best – but planning for the worst. It is important to have someone on the Board who’s been through the partnering experience before, as it can be time-consuming and draining.
The panel closed the session on an optimistic note, providing one key piece of advice from everything they’ve learned over the years: “Things are never as bad as they appear. Companies taking measured risks and maintaining self-belief will get through the difficult times.”