Pharmaceutical Executive Europe - June 2008 - (Page 20) 20 Special Report June 2008 Pharmaceutical Executive Europe recognises that professional management teams do a better job and would therefore be a better way to protect their investment deserves praise, but that isn’t always the case. I know of one investor who remarked that his number one job was to ‘counsel out’ founding academics from portfolio companies. “One of the aspects to consider is the sheer difficulty that academics face in getting an idea across the “valley of death” between innovation and successful exploitation. For a typical innovative technology the valley is at least 10 years wide and $40m deep.” Simon Davey, ex-CEO, Sagentia In the US, the availability of significant early stage funding (not grant money) is far greater than in Europe, and investors usually have enough board level clout to ensure that professional management is involved earlier on. In the absence of a similar venture capital market, Europe needs the academic sector to subsidise the research and early commercialisation phases. Indeed, fledging European biotech companies absolutely depend on the ambiguous relationships with university research departments. The development and staffing costs are often met by university departments and academic budgets until there is something to take to market. Commercial success in life science companies, as in any other high tech endeavour is all about having the right people in the right place at the right time. But this actual mix of people and skills changes over time. The right people at start-up, that is, in preincubation, technology-driven, phases that are usually still within an academic environment, are not necessarily the right people to take a company to an exit, in whatever form that might be — IPO, RPO, trade sale, selective spin-off, M&A or major licensing deal, etc. Should academic entrepreneurs make the leap? A key issue is that during the start-up period there is usually not enough money around to pay for a professional management team, which gives founding academics more reason (or perhaps excuses) not to let go of the reins. This explains some of the differences between the US and Europe where the role of founding academic is concerned. Should academics that chose to commercialise their IP and spin-out a company around it give up the comfortable safety net of their professorial chair and university salary and commit to their new business venture? The answer is a very firm “It depends …” The problem is that we want world class academics to keep on inventing — we should not try to turn them into third class businessmen. Academics should not be forced to take the plunge into management unless they are clearly C-level executive material. There will often be contractual ties with the university and there are benefits to staying linked with the institutional network to allow for fast-track access to resources and other opinion leaders, all hopefully at a lower cost to the start-up. Sometimes the enterprise needs the connectivity best gained by an academic, particularly in cross-disciplinary technologies. By staying in academia, they have access to facilities, like electron microscopes, etc., that can be next to impossible for start-ups to get access to let alone acquire. Is a mixed model of participation, commitment and reward a better model? Many CEOs would prefer academics to stay where they are, contributing to the company via consultancy. This is because CEOs know well that academics are usually untrained and or inexperienced as managers, whatever their own views of their abilities. The perfect scientific founders stay in the university, keep out of day-to-day management, and make their contribution via consultancy and remain committed to the cause. “One issue that is often forgotten […] is the need for all successful companies to change. … Very often academic founders can be inhibitory in allowing these changes to happen … they often cling to the linkage between the company and its scientific heritage.” – Dr Andy Richards, serial entrepreneur. In Europe there is a big gap between academia and business. European academics are often naïve about what it takes to make a company successful seeing success as an extension of the academic activity that preceded company formation. The future of academic entrepreneurs Academics are a diverse group but the fact is that only a few are capable of running a commercial organisation from start-up to exit event or even to maturity. So how can academics who aspire to
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Europe - June 2008 Pharmaceutical Executive Europe - June 2008 Contents From the Editor News and Analysis Calendar Brussels Report - Tell Us Something We Didn’t Know BioFutures - Friends, Acquaintances and Strangers IT Matters - The High Cost of Swimming Upstream Strategy Fundamentals - Hidden in Books Corporate Strategy - New Dimensions for New Business Models Special Report: Making the Leap Sales Force Incentives - The Goal: Setting Goals Last Word Pharmaceutical Executive Europe - June 2008 Pharmaceutical Executive Europe - June 2008 - Pharmaceutical Executive Europe - June 2008 (Page Cover1) Pharmaceutical Executive Europe - June 2008 - Pharmaceutical Executive Europe - June 2008 (Page Cover2) Pharmaceutical Executive Europe - June 2008 - Contents (Page 3) Pharmaceutical Executive Europe - June 2008 - From the Editor (Page 4) Pharmaceutical Executive Europe - June 2008 - From the Editor (Page 5) Pharmaceutical Executive Europe - June 2008 - News and Analysis (Page 6) Pharmaceutical Executive Europe - June 2008 - News and Analysis (Page 7) Pharmaceutical Executive Europe - June 2008 - Calendar (Page 8) Pharmaceutical Executive Europe - June 2008 - Brussels Report - Tell Us Something We Didn’t Know (Page 9) Pharmaceutical Executive Europe - June 2008 - BioFutures - Friends, Acquaintances and Strangers (Page 10) Pharmaceutical Executive Europe - June 2008 - IT Matters - The High Cost of Swimming Upstream (Page 11) Pharmaceutical Executive Europe - June 2008 - IT Matters - The High Cost of Swimming Upstream (Page 12) Pharmaceutical Executive Europe - June 2008 - Strategy Fundamentals - Hidden in Books (Page 13) Pharmaceutical Executive Europe - June 2008 - Corporate Strategy - New Dimensions for New Business Models (Page 14) Pharmaceutical Executive Europe - June 2008 - Corporate Strategy - New Dimensions for New Business Models (Page 15) Pharmaceutical Executive Europe - June 2008 - Corporate Strategy - New Dimensions for New Business Models (Page 16) Pharmaceutical Executive Europe - June 2008 - Corporate Strategy - New Dimensions for New Business Models (Page 17) Pharmaceutical Executive Europe - June 2008 - Special Report: Making the Leap (Page 18) Pharmaceutical Executive Europe - June 2008 - Special Report: Making the Leap (Page 19) Pharmaceutical Executive Europe - June 2008 - Special Report: Making the Leap (Page 20) Pharmaceutical Executive Europe - June 2008 - Special Report: Making the Leap (Page 21) Pharmaceutical Executive Europe - June 2008 - Sales Force Incentives - The Goal: Setting Goals (Page 22) Pharmaceutical Executive Europe - June 2008 - Sales Force Incentives - The Goal: Setting Goals (Page 23) Pharmaceutical Executive Europe - June 2008 - Sales Force Incentives - The Goal: Setting Goals (Page 24) Pharmaceutical Executive Europe - June 2008 - Last Word (Page 25) Pharmaceutical Executive Europe - June 2008 - Last Word (Page 26) Pharmaceutical Executive Europe - June 2008 - Last Word (Page 27)
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