Timing is everything. That was the overarching sentiment from the experienced group of biopharma leaders that formed the panel discussion chaired by Mike Ward, Clarivate Global Head of Life Sciences and Healthcare Thought Leadership, at this year’s AngloNordic Life Science conference.
The ‘If I Knew Then What I Know Now’ panel has for 15 years been a staple of the annual conference, which brings together biotech companies and investors in London for networking, company presentations and plenary discussions.
This year’s four panelists had built and sold companies through economic recessions, funding cycles and biotech bubbles both in Europe and the United States and have the scars to prove it. When the economic situation is up, advised Stephanie Léouzon, managing director of health care investment banking at Stifel, you should “raise as much cash as you possibly can.”
“While it is good to start [an enterprise] at the bottom of the market because the returns are better, it is also the hardest time to raise money, whether it’s a fund or a company,” said Dan Mahony, current Chairman of the U.K.’s BioIndustry Association, recalling the establishment of Polar Capital Partners on the eve of the financial crisis in 2007. “You have to be patiently impatient,” he said. “You have to be active [about raising cash] and keep knocking on doors,” he advised.
Taking a long view and hustling through the downturn
Company leaders must think strategically about what the organization should be when it grows up, said Eva-Lotta Allan, chair of Draupinir Bio and former deal maker at Ablynx, Immunocore and Vertex, as this will help to narrow the focus and inevitably become more financeable. The advice of a calm board that can provide independent guidance to a CEO is critically important at this time in a company’s lifecycle.
“And once that money is there, the pressure will not subside,” said Allan. “You must put that money to good use, prioritize the right projects and create value.” Optionality is great at this point, panelists agreed, but focusing on one value driver – whether an asset, a platform, or a project – to help the company reach its value inflection point is the best next step forward after raising funds.
Artios Pharma CEO Niall Martin recalled the sale of KuDOS Pharmaceuticals to AstraZeneca for $210m in late 2005 and advised that there will always be a question mark about the right time to sell when there is pressure in the system to sell assets, which is mirrored in today’s biotech environment.
“It’s a lesson in doing things too early,” said Martin. If the company had waited six months for phase 1 results and knew the true value of its asset, KuDOS would have been “five, six or seven times more valuable.” KuDOS’ lead asset, cancer drug olaparib (AKA LYNPARZA®), went on to generate sales of $2.9 billion for AstraZeneca in 2022.
The panelists agreed that “what goes down will come up” and vice versa. “These cycles are just the nature of biotech,” said Mahony and for a company wanting to enter the public markets, timing is key. “Knowing when to jump through the [IPO] window is very important and hindsight is a wonderful thing,” concluded Martin.
To learn more about how Clarivate helps life science companies partner smarter through deal-making intelligence, please visit Cortellis Deals Intelligence. You can find further insights from Mike Ward here.