Fireside Chat: Chair: Dan Mahony, Co-head of Healthcare, Polar Capital Kieran Murphy, President & CEO, GE Healthcare
Strategy and Core Values at the Heart of Pandemic Crisis Response
Optimum’s 12th Annual Healthcare Investor Conference opened up with Dan Mahony chatting virtually by the fireside of Kieran Murphy, of GE Healthcare. This was an opportunity for all to benefit from Kieran’s extensive wisdom and experience working in the global healthcare sector, both as a dealmaker for small companies in years past and today as CEO of the $17 billion multinational, GE Healthcare. The result was a surprisingly open and frank discussion.
Kieran described the considerable adjustments and innovations GE has made in response to Covid-19, highlighting the extent to which GE has been able to use its muscle to unleash resources and deploy expertise, infrastructure and capital to help in the global effort, coming to the aid of China early on who then reciprocated by sharing knowledge and technological advances as the virus spread across Europe.
Kieran stressed the importance of a company’s core values and purpose when faced with a crisis, alongside transparent communication. He talked about weekly Zoom calls, during which he addressed and galvanised thousands of GE’s workforce while commandeering members of his senior management team to share their stories and perspectives on the crisis – an approach that felt both “raw” and vital in GE’s battle against the virus. In response to this ‘call to arms’, Kieran has been amazed by the extent to which staff have rallied, describing those in administrative, regulatory and office roles within the business volunteering in their droves for night shifts to make ventilators. From the beginning, Kieran has been determined to place GE at the centre of the crisis, to do whatever it takes to help customers while keeping staff safe and ensuring that the supply chain is adaptable, reliable and keeps up with demand wherever it may change.
On digital health Kieran talked about the fact that we’re only in the early foothills of taking digital health forwards. The digital framework has so many modalities that there is an infinite number of spaces to work in. Single solutions and individual artificial intelligence products continue to proliferate, adding enormous value but realistically need platforms upon which to sit to enable wide deployment with all the regulatory, manufacturing and scaling thought through.
Dan and Kieran also discussed the challenges of executing successful M&A transactions and extracting maximum value out of biotech businesses. Kieran commended Europe’s excellent science but suggested US companies are better at commercialising that science and focusing on being close to customers, on sales channels, distribution, scale and getting the right teams together for each different stage of company evolution. Although US companies have the advantage of a bigger, more homogenous market on their doorsteps. Rather than ‘how to get your first million?’ he suggested ‘how to get your first customer?’ is the more pertinent question, stressing time, patience, partnership thinking and realism as the key to success. After all, “quick fortunes come slowly.”
Reflecting on acquisitions, Kieran identified a clean structure and a well-developed long-term strategy as key components in successful deal making, emphasizing the importance of “watching the hygiene” around a target’s “legal structure and IP” in order to avoid bad acquisitions that can “burn so much energy!” and occasionally strain relations with regulators if manufacturing and Quality and Assurance are not as stringent as they could be. He also spoke of the importance of focused cash generation and R&D in delivering long term value. GE regularly partners with small enterprises and Kieran stressed the importance of finding the right channels and partner platforms for small biotech.
Dan and Kieran rounded off by discussing the increased relevance of environmental, social and corporate governance (ESG) – how it is vital for businesses of any size and at any stage of development to demonstrate their environmental, social, and governance credentials in order to attract talent and solid investment, something that was also highlighted in the conference’s investor relations panel. “There’s no choice, even for smaller companies to do less than go full bore on ESG. It has to be on the agenda.” Kieran saw big drivers of ESG as including diversity, energy usage and preventing environmental problems. “Just switching to electric cars might save tons of emissions.”