BIO-Europe Spring is one of Europe’s biggest biotech partnering events with discussion topics ranging from platform technologies and manufacturing to biotech investments. Here are some of the key take-home reports from the proceedings.
The event, which took place from March 20 to 22, in the budding biotech hub of Basel, Switzerland, was in full swing with a long lineup of sessions. Labiotech.eu teamed up with its parent company, the cloud partnering platform Inova, to deliver the top insights from the conference.
Table of contents
M&A isn’t going anywhere
Moderator Melanie Senior began the keynote session at BIO Europe Spring with a pointed question: is big pharma moving away from mergers and acquisitions, and instead focusing on partnering?
After all, Senior explained, after declines in M&A activity during the COVID lockdowns and despite hopes that 2022 would see activity bouncing back, big acquisitions didn’t emerge. What’s more, even if recent announcements from Pfizer and Sanofi might presage an M&A turnaround, it’s still unclear if these are the beginning of a trend or a temporary aberration.
Her question was directed to panelists Susanne Kreutz, global head of corporate and business development at Novartis, and James Sabry, global head of pharma partnering at Roche, and the answers were positive but nuanced. Kreutz expects M&A activity to continue but with a focus on high-quality, high-impact late-stage assets where reimbursement and regulatory approval are clear. Sabry concurred, noting that the M&A slowdown is part of a down cycle in the industry, but that this is temporary and far from the end of M&A activity in biopharma.
Some, including BIO senior vice president for industry research in his opening address at the congress, pointed to the US Inflation Reduction Act (IRA) as a handbrake on innovation and R&D, with flow-on impacts on partnering activities. Yet, both Kreutz and Sabry rejected this analysis, with the former noting that the IRA has not and will not impact the Novartis innovation strategy which remains focused on patient outcomes. Sabry concurred, explaining that the IRA is not influencing Roche’s search for innovation and will always work with payers to make sure medicines get to patients.
Senior then pivoted from strategy to execution, quizzing the executives on the balance of power between top pharma and biotechs in today’s bear market. You can call the shots, she said, so how are you thinking about deal structures in such an environment?
“We don’t think about front-foot or back-foot or who has the advantage or the disadvantage,” answered Sabry, adding that Roche does not have an adversarial relationship with its partners. Kreutz agreed, explaining that Novartis wants to see eye-to-eye with its partners and find the deal structure that works for both parties. Using terminology that would be echoed by large pharma speakers across the BIO Europe Spring panel sessions, Kreutz asserted that Novartis is “deal-type agnostic” and that it is the science and innovation that matters.
Turning to the practicalities of partnering, Senior asked how biotechs could best connect with the Swiss pharmaceutical leaders. Sabry replied by imploring biotechs to take initiative, introduce themselves to pharma teams at conference booths, and explain in a concise manner what their science is and what they hope to build. He encouraged biotechs to reach out early in the development because building relationships in the industry takes time, and Roche wants to partner with people it knows well. Finally, he added with a smile, don’t be discouraged if synergy is missing in initial discussions because “it doesn’t all hang on the first date.”
A Chinese biotech with a global focus
For the last decade mainland China has grown in size and reputation as a source of innovative biotechnology. With a domestic market of more than a billion people and a regional market that encompasses more than 4 billion, the initial focus of these firms was on serving nearby markets and working with multinational pharma firms on joint venture projects. More recently, though, a new wave of biotechs have emerged in mainland China which have a truly global focus.
Among them is Zai Lab, a Chinese firm with its headquarters in Shanghai, R&D facilities in Suzhou, and commercial and regulatory offices in Beijing, Hong Kong, Taiwan, Menlo Park and Cambridge, Massachusetts. Founded in 2014, the company successfully completed two fundraising rounds for a total of $136 million before a 2017 NASDAQ IPO for $172 million. Today, it has a market cap of $3.1 billion and chief business officer (CBO) Jonathan Wang was at BIO Europe Spring to talk business, partnering, and what they look for in any pitch to collaborate.
Wang explained that Zai Lab has revenues of $250 million, a $250 million internal R&D budget, and more than $1 billion in cash to power their innovation. This innovation will be powered by partnering, Wang explained, and partnering has been a strategy leveraged by Zai Lab for growth since its inception. “Our global ambitions will be fulfilled by partnering,” he said, and of the 8 programs that Zai Lab has on the market right now, all have come from partnering and collaboration deals.
Clarivate’s global head of life sciences and healthcare thought leadership Michael Ward quizzed Wang on his target areas for partnering activities. Wang responded that their current therapeutic area priorities remained oncology, immunology, and neurology, with cancer programs being around 70% of the total focus today. Wang expects that this 70/30 split will even out over time and likely approach a 50/50 split soon. In terms of modalities, Zai Lab is open to all types, preferring to pick the modality and target which have the greatest potential to treat or cure disease.
With this being the case, Ward pushed Wang to explore what a potential Zai Lab partner should bring to the table to make a deal. “At the foundation is the science,” Wang responded. If the science is addressing an unmet medical need, whether in China or elsewhere, that’s attractive to Zai Lab. According to Wang, a partnering pitch needs to contain three things: the data, an explanation of the unmet medical need, and why Zai Lab is a good fit as a partner. The potential partner needs to be able to identify what expertise Zai Lab already has in the domain and why a partnership makes sense for both parties.
“We want to work with innovative companies with their own programs,” said Wang. “We have a collaborative spirit and culture; we know we can work with most companies out there.” Zai Lab is committed to maintaining an external innovation strategy and, with several of its current collaborations having emerged from initial discussions at BIO Europe Spring, Wang was keen to explore opportunities with potential partners from Europe, the US, and elsewhere.
What lies ahead
The BIO Europe Spring panel session was titled ‘Dealmaking in 2023: What Lies Ahead,’ but it began with a look back to 2022. Panelists Konstantina Katcheves, SVP at Bristol Myers Squibb, Karen McGurk, executive director of transactions Europe at MSD, and Bradley Hardiman, head of Europe BD, and S&E at Astellas, agreed that the market environment was less than ideal heading into 2023, but there was still much to gain.
Katcheves suggested that because of the macro-economic and regulatory environment, there was likely to be some restraint on M&A activity this year, but that she expected partnering to continue at an active pace. McGurk agreed, suggesting that “we’ll look back on 2023 and see that we were busier than ever.” It was Hardiman, though, who put the current business environment in a broader historical context. “We’re in a unique situation,” he said, “unless you’ve been around long enough and then you’ve seen it all before.”
In essence, then, even if there were external factors that might slow down innovation, it’s likely to be a temporary slowdown at worst and certainly not anything that would significantly impact partnering efforts. Indeed, McGurk argued that the current environment will see pharma companies adopt an international and disciplined approach to partnering, going after the best science, and filling their pipelines with “deals that make sense.”
Moderator Susanne Weissbacker of EY-Parthenon quizzed the panelists on what good partnering looks like in 2023. Hardiman responded that it came down to three things: communication, communication, and communication. Effective communication helps the partners to build trust and learn precisely what the other party wants. He urged flexibility and developing an understanding of what the dealbreakers are for the other side.
McGurk echoed Hardiman’s call to communicate, encouraging biotechs to come and discuss their hypotheses and innovations. If the biotech is focused on the patient and if the biotech can explain how the partnership will add value for both parties and accelerate development timelines, there is a good foundation for a future collaboration.
Turning to challenges in the months to come, Katcheves believes that the macroeconomic environment, regulatory restrictions, and pricing policies will be the biggest hurdles to innovation. Hardiman added that getting past gatekeepers such as executives that don’t share the vision of the business development team is a challenge, too, though he conceded it is one that has long existed. McGurk concurred, reminding the audience that, in the biopharma space, necessity is the mother of invention.
Weissbacker concluded the panel by asking each of the panelists for their predictions for the year ahead. For Katcheves and BMS there will be more collaboration, an embrace of artificial intelligence, machine learning, and digital health, and a focus on health equity. Hardiman agreed with Katcheves on AI and machine learning but suggested that picking winners is difficult for the industry at this point. McGurk reiterated that she expects 2023 to be busy and that pharma companies, like hers, are ready to step up and have partnering conversations to continue to drive innovation.
The obesity marketplace is heating up
According to the World Health Organization, “obesity is one of today’s most blatantly visible – yet most neglected – public health problems.” Hundreds of millions of people around the world are obese, including more than 40% of the adult population of the United States according to the CDC. For many years, obesity was thought to be the inevitable result of an individual’s own lack of willpower. More recently, though, a deeper understanding of obesity as a disease has emerged from fundamental scientific research, and treatments have arrived that promise to help arrest a global obesity trend.
Analyst and journalist Melanie Senior welcomed two panelists working on therapies to treat obesity to a discussion of the current obesity drug market and its trajectory in the years to come. Allessandro Toniolo, CEO of Resalis Therapeutics, and Josua Jordi, CEO of EraCal, were open in explaining how. Despite both addressing the same disease and both seeking to be best-in-class, they perceived the market to be so open and offer so much value that it was a true ‘blue ocean’ space.
Senior put the scale of the obesity epidemic in the United States into sharp focus by explaining that there are six times more cases of obesity in the US than all cancers combined. She asked the biotech executives how they planned to address this market, especially because obesity is a disease that can lead to a wide variety of other complicated conditions including depression, diabetes, and cancer.
Toniolo agreed with Senior’s positioning of obesity as a complex disease, and added that it is also a multi-organ and multi-pathway disease. “We wanted a technology that could hit multiple pathways,” he said, and so Resalis was pursuing a non-coding RNA-based approach.
Jordi’s approach was different. He and EraCal were aiming to create a “next generation anti-obesity drug,” delivered orally once daily. Early data suggests that this approach is at least as effective as an injectable alternative and, with a new mechanism of action, this is a first-in-class compound. Jordi sees his treatment as akin to hypertension treatments where the condition can be managed with a single pill, once daily, an effective monotherapy but still capable of being used as a complement to other therapies.
Senior pushed both CEOs on the issue of safety. After all, she said, there have been famous safety issues in the past with appetite suppression therapies – how will these alternatives be different? Jordi admitted that historical efforts to address obesity have sometimes proved problematic but believes that a whole-organism approach will help EraCal, and others, avoid such safety issues. Toniolo, too, explained that testing and trials of their micro-RNA therapy will allow them to understand its impact on genes.
The market opportunity for both biotechs is enormous and, at least for the moment, neither is worried that they might lose a share of that market to the other. “We’re not competitors with Allessandro, with Eli Lilly, or with Novo Nordisk,” Jordi said. “This is blue ocean territory, and we hope that everyone succeeds.”
Shifting approaches to investment + investors collaborate
Days after the collapse of Silicon Valley Bank and during a broader global economic downturn, four investors shared a stage in Basel to talk biopharma investment strategy, venture capital strategy, and partnering at BIO Europe Spring. Clarivate’s Michael Ward moderated the discussion between Jasper Bos, general partner at Forbion, Bradley Hardiman, head of Europe S&E and BD for Astellas, Carole Nuechterlein, head of the Roche Venture Fund, and Hubert Birner, managing partner at TVM Life Science Management GmbH, and opened the proceedings quizzing the investors on their strategy for sourcing and closing new deals.
Birner explained that TVM was currently investing out of their 8th fund and had raised $500 million in new capital since the pandemic, to invest in the U.S. and Europe. Their investment strategy had two streams: the first, where single assets were licensed into special purpose vehicles and prepared for acquisition, and the second, being a classic co-investment strategy for later-stage deals.
Nuechterlein said that her mandate at the Roche Venture Fund was to return financial income to Roche, and that while the pharma company was traditionally conservative, the venture fund took on greater risk to deliver greater returns. “We invest in areas that are interesting to Roche,” she said, “or that should be interesting to Roche but where Roche hasn’t arrived yet.” The Roche Venture Fund focuses on seed, Series A, and Series B investments, but will not invest in the later-stage deals that attracted TVM.
At Astellas, Hardiman explained in turn, a Series A investment is the sweet spot. Investments by the company are strategic and aimed at filling the corporate pipeline. Astellas invests globally and in a wide range of therapeutic areas, modalities, and always with an eye towards collaboration. This broad mandate was something that Bos spoke to, as well. His firm was ready to invest across the development lifecycle from very-early-stage to pre-launch and commercialization, and Forbion has some $2.5 billion under management today.
If the current macro-economic environment had the investors worried, it didn’t show. All agreed that the current downturn would take a few years to play out, but that it was very different to the 2001/2 and 2008/9 declines. “The capital markets collapsed in 2008,” said Nuechterlein, and this is not the case in 2023. Birner added that while it is not clear how long the downturn will last – it could be the summer, or into 2025 or 2026 – everything that is happening now has happened before.
Overall, a feeling of optimism pervaded the panel. Bos exemplified this, reminding the audience that biotech can do things that couldn’t have been dreamed of ten years ago. “There’s a lot of capital in the market for creative people to find cures for diseases that were untreatable before,” he said. Birner agreed, noting that if a biotech is smart, and if it remains flexible, it will always find money. Nuechterlein added that where a biotech can demonstrate good data and good molecules, people will invest, and Hardiman urged biotechs to make every penny count. In a downturn, capital efficiency should be a biotech’s watchword; it’s certainly what investors are seeking alongside novel, innovative science.
Investing to accelerate innovation in Europe
Is Europe really anti-innovation?
And if not, what will drive innovative drug discovery in Europe in a period of tightening belts?
These two questions set the scene for a spirited panel with an optimistic bent at BIO Europe Spring as Daniel Chancellor, Thought Leadership and Consulting Director at Citeline, probed a panel of pharma, biotech, and VC executives on their activities in Europe and their innovation strategy for the region.
Alette Verbeek, SVP, global strategic partnering at Zai Lab, and Jonathan Tobin, a partner at Brandon Capital, both spoke about the quality of the science in Europe. For Tobin, when his Australian firm was seeking to expand and faced a choice between the U.S. and Europe, philosophically, there was a closer match between Europe and the company headquarters. “The sorts of businesses we build are capital efficient,” he said, and in Europe, there were plenty of “old-fashioned, capital efficient, asset-centered” companies to be found. Verbeek added that Zai Lab has a strong relationship with several European companies, including GSK, and that the question for her is not whether to partner in Europe, but how to accelerate that partnering.
Co-panelist Calin Jurma, senior investment officer at the European Investment Bank, offered one avenue for that acceleration that biotechs had tapped, with some success in recent years. The EIB’s venture debt program targets clinical stage companies that need capital to get to commercialization. The EIB provides capital but remains a silent partner; they do not take board seats and offer debt funding that is both founder-friendly and investor-friendly. With a goal of lifting R&D spending in Europe to 3% of GDP from its current rate below 2.5%, the EIB expects to play a significant role in ensuring innovation continues in Europe.
Tony Jones, CEO of One Nucleus, presented another means by which innovative biopharma firms can move faster and grow more quickly. Instead of injecting capital, – he admits that One Nucleus has ‘less skin in the game’ than some larger venture firms – his firm focuses on helping biotech founders make the transition from running a lab to running a business. “We connect them with people who have done this sort of thing,” he explains, offering the example of ex-pharma executives who, with their support, help transform promising startups into successful biotechs.
Jack O’Meara, CEO and co-founder of Ochre Bio, argued that Europe was the right place to build a successful biotech even if the capital was more likely to be found elsewhere. “We did our seed round in the U.S. and then a Series A led by a U.S. firm,” he explained. However, the scientific talent is in Europe, the development costs are one-third of what is typical in North America, and there is less competition to attract the best people to the company. While there has sometimes been a disconnect between top pharma and small biotechs in Europe, the continent’s strong history of drug development offers hope that this can change.
The ‘Old World’, at least in the eyes of this panel, still has much to offer when it comes to innovation.
Where does the future of APAC partnering lie
There was a time when biopharma deals in China were largely transactional. As moderator Timothy Pang, executive director of Citeline, put it, these deals are relatively simple: basic territorial rights, sales rights, and marketing rights. As years pass and markets mature, however, deals become more complex. In place of one-off transactions and limited joint venture opportunities, biopharma companies develop more sophisticated networks of collaboration. For the Asia-Pacific region, recent deals suggest that this increasing complexity in dealmaking is the new reality, and the question becomes, what happens next?
Ji Li, principal at JL Biopharma Consulting, recalled that early interactions between multinational pharma companies and Chinese firms were limited joint ventures, a corporate arrangement prescribed by Chinese laws. Today, though, all the top pharma firms see China as one of the most important sources of innovation, and there is a corresponding huge appetite for external partnerships amongst Chinese biotechs. Konstantina Katcheves, SVP at Bristol Myers Squibb, concurred, and added that her firm has shifted from early transactional deals to having built up teams for local S&E, joint development, and closer collaboration in mainland China.
Darren Ji, CEO and co-founder of Elpiscience Biopharmaceuticals, explained that this is just the tip of the iceberg for biopharma partnering in China. “China has changed from a service provider into an innovation machine,” he said. “We don’t benchmark ourselves against other Chinese companies but instead against global companies in Boston and Cambridge.”
Ji added that the Western companies bringing teams into Chinese labs are contributing to the wider ecosystem and helping drive innovation locally.
Somewhat controversially, he concluded that he believes there is a greater drive to innovate in China than in the West. People work harder in China, he stated, and that this is the first generation of people who are working harder than the West, while focused on biotechnology. Moderator Pang asked Ji whether immigration to the United States from the Asia-Pacific region was continuing to fuel innovation there. Ji rejected the idea, arguing that Americans are no longer working to innovate and build better futures for their communities but just “working to work.” Young people in the U.S. today are interested in economics, marketing, and finance, he said, adding that they are not interested in the natural sciences anymore.
Turning to the other major developed East Asian markets, Pang quizzed the panel on the state of biopharma innovation and partnering in Japan and South Korea. Li proposed that big pharma in Japan had always been globally engaged, and that the mid-tier pharma companies in Japan are becoming significant regional players. While the “innovation engine” in Japan is less pronounced than in China, when it comes to South Korea, there is perhaps a mid-ground. Michelle Chen, CBO of Insilico Medicine, suggested that South Korea sits somewhere between China and Japan in terms of biopharma development. She added that South Korea is playing to strengths in manufacturing, with Samsung Biologics doing well as a CDMO even if discovery efforts in the country are more limited.
So, what does the future hold, asked Pang to the panel. For Li there is an expectation of an acceleration in the number of deals, as companies in the West remain hungry to fill their pipelines. Katcheves agreed and believes that the future will see real transformation and acceleration in digital health and personalized medicine in the region. Chen suggested that the APAC region will drive novel science and that this will power new innovations, with Ji concluding the discussion by suggesting that the current environment represents a golden opportunity for European and Chinese partnerships to emerge and expand.
Partnering in a time of instability
Moderator Michael Ward, global head of life sciences and healthcare thought leadership at Clarivate, set the scene for a panel titled ‘Partnering in a Time of Instability’ by laying out exactly where that instability lay. A land war in Ukraine, tensions between the United States and China, the collapse of Silicon Valley Bank, the passing of the Inflation Reduction Act in the U.S., and less capital available for biopharma innovation from nervous investors. “Is this a more challenging time for the industry than what has been seen before,” he asked.
Avaleigh Milne, head of business development for pharma research and early development at Roche, agreed that there was currently a lot of stress in the system and that there were real contrasts with the capital-rich environments of recent years. Despite these challenges, there remains tremendous innovation across the sector, and she is confident that the industry will make it through a downturn.
Andreas Wallnofer, a partner at Jeito Capital, also pointed to big shifts in biopharma investment markets. He noted that the window for biopharma IPOs has essentially closed with a 90% reduction since 2021. Like Milne, he perceives that the sector is in a period of accelerating innovation despite the economic instability, but warns that biotechs can no longer rely on speculative investments without solid data packages to demonstrate value.
Another change in the market has been a shift in the so-called balance of power between small biotechs and top pharma. Ward suggested that a couple of years ago, biotechs held the upper hand and top pharma was on the back foot. Today, that dynamic has shifted, with Milne pointing out that a lot more biotechs are reaching out to discuss opportunities for collaboration. “They see us as being able to provide stability and expertise,” she said, but confirmed that Roche’s approach to partnering has not changed, nor has the value of partnering to the organization changed.
Michael Engsig, CEO of Nykode Therapeutics, revealed that his company did not see top pharma partnerships as a haven in uncertain times, but admitted that partnering has helped de-risk their research and development. “We don’t need to go to capital markets when we have a partnership,” he said, and prospective partners find biotechs with existing top pharma partners attractive as they know good due diligence has already been completed.
Ward pushed the panelists to offer their advice to a biotech executive in unstable, uncertain, and unpredictable times. Wallnofer urged biotechs to avoid making deals out of desperation, or because of a lack of other opportunities. The quality of the partner matters, he said, and that you need to avoid being too constrained by the deal. Milne suggested that biotechs should work on understanding the roles and expectations of each side as partnering demands an aligned scientific vision. Bring the scientific teams to the table early, she implored, and build a truly symbiotic relationship.
Engsig echoed Milne’s focus on science, and suggested that biotechs focus on building relationships between scientific teams first. He urged biotechs to attend scientific conferences, and show their data to scientific teams before meeting with partnering teams. “You need a champion on their other side of the table,” he said, adding that biotechs who can find such a champion, will be in a stronger position than one pitching cold to BD teams.
Day in the life of an experienced dealmaker
In the annual ‘Day in the Life of an Experienced Dealmaker’ session, four executives joined moderators Anton Gueth (Evolution Life Science Partners) and Evonne Sepsis (ESC Advisors) to offer their insights on the state of biopharma in 2023. Over forty-five minutes of spirited discussion, the panelists outlined what they are looking for, the deal structures they are seeking, and even explained why a couple of deals fell through.
Philippe Lopes-Fernandes, executive VP and CBO at Ipsen, set the scene by offering some context to the current dealmaking environment. “There’s a feeling in the community that pharma has a lot of money and firepower, that there is a patent cliff approaching, and that the value of biotechs is dropping,” he said.
“So where are the deals?”
In response, he said that Ipsen isn’t looking for cheap deals, they are looking for the right deals: assets that fit in the pipeline, technology that the company is comfortable with, and structured in the right way.
Nathalie ter Wengel, European lead worldwide business development at Pfizer, agreed that deals are still there for the making. Even if data says that industry M&A activity is down, she revealed that’s not impacting Pfizer. The company did four acquisitions last year and has reached $100 billion in revenues post-COVID, leaving the company with the cash reserves to do deals. Matthias Muellenbeck, SVP and head of global BD & AM at Merck KGaA was equally bullish for 2023 dealmaking, and if there are synergies and differentiators that can emerge from the collaboration, there will be capital to be deployed.
The sole venture investor on the panel, Kinam Hong of Sofinnova Partners, reminded the audience that even in this period of economic downturn, the industry remains strong. He said: “We’ve seen downturns before,” adding that “this is not new, it was difficult, but we survived.” His firm is looking for assets that will make an impact on patient outcomes, and has resources in six different funds for investments in different therapeutic areas and development stages.
The moderators turned the discussion to deal types and, as was the catch cry across the BIO Europe Spring event, pharma executives affirmed that they were ‘deal type agnostic’. “We enter discussions transaction type agnostic,” said Muellenbeck, with Lopes-Fernandes echoing this sentiment and stating: “I don’t think there is ‘one size fits all’ in dealmaking.” Ter Wengel joined her pharma colleagues in remaining open to all types of deals, reminding the audience that it would always come back to the science and what the parties were going to bring to the table.
Only venture capitalist Hong broke from the agnosticism. He said that investors will always prefer a clear exit via M&A rather than a long-term licensing deal. A license on a lead asset is not what venture investors will be happy with, and the best outcome for the investors is a clear, clean exit and not ongoing royalty payments.
Closing out the panel on a lighter note, the executives were asked to speak about deals that had not been done and identify what went wrong. Ter Wengel led off and urged the audience not to yell at their opposite number, even if they were upset. Burning bridges, she says, is no way to build a reputation in an industry where people regularly change roles and employers.
Muellenbeck suggested that it was during the due diligence stage where most deals fell apart, and he advised biotechs to be upfront about the challenges they are facing or will face. Lopes-Fernandes agreed, and reminded potential partners that deals were always about more than just money. In this industry, trust and relationships matter.
Navigating the roadblocks
When it comes to the roadblocks in biotech there are only two questions that matter: what are those roadblocks, and how can they be avoided or, at least, have their impact minimized? These were the key questions that a panel including a biotech founder, a venture capital investor, a serial biotech entrepreneur, and a biotech incubator chief, set out to answer in a spirited and engaging panel at BIO Europe Spring.
Andrea Chicca, CEO and CSO at Synendos Therapeutics, kicked things off by suggesting that the biggest challenge faced by small biotechs is spinning their program out of an academic lab. It requires a lot of support, it requires funding, and you need a network, he said. You also need to deploy resources efficiently to create success, he added, and so business knowledge and industry expertise becomes critical.
Florent Gros, CEO of Priothera, agreed that the challenges to biotechs were many. “The roadblocks are multidimensional,” he said, and knowing how to navigate them is a major challenge. Finding the right team can take a long time, he said, and while raising capital is always possible, it can be hard to know how much money is needed. “We raised $30 million but we needed $120 million,” he admitted, “and we only found out later.”
Stephan Emmerth, director of business development and operations at incubator and accelerator BaseLaunch, suggested that a major roadblock was understanding if the science was ready for a launch. “Often the science is too early,” he explained, adding that the founders don’t know what to do with it. Lab projects commonly spin out far too early and there often needs to be more data before a viable startup can be established.
It was Sara Nunez-Garcia, founding partner at Forty51 Ventures, who offered the most original take on biotech startup roadblocks. “For us,” she said, “the biggest roadblock to startup success is human psychology.” For Nunez-Garcia there is rarely an issue with talent (there’s a lot) or capital (there’s plenty) but there are often issues in setting the right strategy and executing efficiently. People are afraid of failure, of making the wrong investment, and of doing the wrong experiment; getting them aligned and moving them forward is key to overcoming this most human of faults.
When questioned on how to deal with these roadblocks, the panel suggested a variety of mitigation measures. Chicca pushed biotech founders to move directly to the experiment that will either confirm or kill their hypotheses, and Gros agreed. “Kill the project as early as possible,” advised Chicca, and do not shy away from failure.
Nunez-Garcia, on the other hand, advised biotech founders to focus on developing their emotional intelligence and business acumen. “We are not looking for the smartest person in the room,” she explained, adding that everyone in this industry is smart. “We are looking for the person with high emotional intelligence.”
There are so many decisions to be made and things to consider, she continued, and biotech founders need to be able to make decisions, execute those decisions, and adapt to challenging circumstances.
Author: Dylan Kissane
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