3/23/16 ¡ You Drive Innovation. We’ll Navigate . Biopharmaceutical Companies Organizations and Opportunities Materials Developed by Laurie Halloran CEO & President Halloran Consulting Group, Inc Proprietary & Confidential 1 ¡
3/23/16 ¡ Critical Attributes of Life Science Business Success • Define and adhere to a focused business strategy • Build a flat, flexible organizational structure tied to the strategy • Rigorously focus on flawless execution • Create and maintain a performance driven culture within the firm • Recognize that the company will need to change as it moves through stages • Hire the best talent with an eye on the next stage • Deliver real leadership Proprietary & Confidential Characteristics of the ‘ Best in Class ’ Operating Philosophy Leadership • • • Crystal clear customer driven • The vision is evocative and inspiring context • The vision is communicated endlessly • Every action tested by its value added • The mission and goals are congruent • Information is shared openly Decisions are made locally Initiate strategies and ensure • • execution Employees are appreciating • resources Secure and develop resources • Architecture The structure is in alignment • • Dense, mission focused structures Develop continuous learning • • systems Emphasis on value added processes • Business Strategy • Flat organization with few levels • Overlapping problem solving • Multifunctional and team based • Pursue process development • • Work design precedes technology Time/Cost/Quality sensitive • • Partnerships are the norm performance metrics Focus on cycle time • Modified from Rick Sidorowicz:The CEO Refresher, http://www.refresher.com/!fast.html Proprietary & Confidential 2 ¡
3/23/16 ¡ Asking Questions to Define a Focused Business Strategy What do we want to be when we ‘ grow up ’ ? • Where do we see our exit? • How will we organize for the most effective results and encouraging • technological innovation, while effectively licensing and preserving intellectual property for a competitive edge? What is the best business model? • Should we plan for partnerships and/or alliances? • How will we stay competitive in a quickly shifting industry, including • managing product life cycles and determining market positioning and pricing? What are appropriate financial strategies and control systems that • incorporate risk management? How can we create sustainable leadership within the organization to • encourage managerial stability? Proprietary & Confidential Strategy Should Drive Growth and Structure Executive Management should have overall exit plan in • parallel with an organizational strategy in mind from early days – Timing and stage for exit • IPO • Partner and grow • Be acquired • Bootstrap it • Plan A and Plan B – VIPCO vs. FIPCO vs. Hybrid • Resource plan tied to the exit • Core competencies to build vs. buy • Outsourcing Strategy • Change management plan Proprietary & Confidential 3 ¡
3/23/16 ¡ What the IPO Market looks like historically Proprietary & Confidential Management Life Cycle in Life Science Companies Stage 5 Maturity Stage 4 Optimization Core activities: Stage 3 Integration Operate as FIBCO Core Activities Size & Complexity Full pipeline, Stage 2 Focus Staffing: Core Activities including significant >1000 employees Stage 1 Start-Up Late clinical/early approved products Cone activities commercialization Preclinical/phase I Core activities: Challenges: and II Staffing: Staffing: Discovery, early Maintaining profitable 250-1000 employees 150-500 employees; development growth Staffing: in multiple functions balance of scientific, Meeting investor 75-200 employees, and disciplines technical and Staffing: still emphasis on expectations professional business < 100 employees, scientific skills, but skills Challenges: adding development emphasis on scientific Management: transition the business capabilities and some skills Remove management Challenges: into a commercial business professionals using complex Confront growing enterprise without Challenges: complexity—deal with business systems and losing creativity Challenges: • Fostering creativity need for integration practices Focusing on priorities while avoiding chaos Management: Management: • Meeting partners Management: extensive planning, increasingly formal demands if relevant* Initial attempts to defined business structures, structure work, define accountabilities, and processes, systems and Management roles and increase practices structured processes. discipline without Informal, vision driven “ managers manage ” adding bureaucracy and ad hoc processes* plus ability to meet partner ’ s expectations Time Source: Mardis, Aibel & Associates, LLC Biotechnology Management Practices 2003 Proprietary & Confidential 4 ¡
3/23/16 ¡ Proprietary & Confidential Climbing the Ladder… Be Sure You’re on the Right One! Proprietary & Confidential 5 ¡
3/23/16 ¡ Roles Within a Program Team Proprietary & Confidential Small BioPharma vs. Big BioPharma Big Pharma Small Pharma • Specialty Top earning companies • (over $2 billion per year), pharmaceuticals, start- large scale, international ups, biotechs, mid-sized operations drug companies Focus on drugs that will • • Closely associated with have blockbuster status (at academia; more least $1 billion in sales); experimental (risky) risk adverse approach approach to drug Fully integrated • development pharmaceutical operations • Heavily utilize CROs due including internal R&D, manufacturing, clinical, to lack of resources and regulatory, marketing and global presence sales Proprietary & Confidential Levinson, A.D. (2005). What distinguishes biotech from big pharma. Beyond Borders: The Global Biotechnology Report. Rosen, M. (2005). Top 20 big Pharma represents majority of world pharma market. The Wisconsin Technology Network. 6 ¡
3/23/16 ¡ Management Capabilities in Clinical Research No. of Employees 3-5 1000-2000 Number if Clinical Experts None Hundreds Corporate Status Private Public Portfolio Size 1 product R & D portfolios Risk High Lower Board of Directors Active operationally Directs strategy Material News Lower threshold Higher threshold Decision Time Seconds! Months >15 years 10-15 years Skill Req ’ ments for CR Position High Critical Impact Participative Directive Style To Development Head To SVP CEO, BOD Accountability Through reporting channels, Immediate, fewer committees hoops Access to Senior Mgmt Committee or Functional evaluations Immediate Decision-making process Proprietary & Confidential Discovery/Early Stage Companies Research & Finance & Development Administration Operations Quality VP ¡of ¡Research ¡& ¡ Director ¡of ¡Product ¡/ ¡ Director ¡of ¡Quality ¡ Director ¡of ¡Finance ¡ Development ¡ Process ¡Development ¡ Finance ¡ Quality ¡Control ¡(QC) ¡ • Accoun@ng ¡Clerk ¡/ ¡ ¡ Discovery ¡Research ¡ Process ¡/ ¡Product ¡ ¡ ¡Payroll ¡ Chemistry ¡ • Sr. ¡Scien@st ¡ Development ¡ • Scien@st ¡ • Process ¡Dev. ¡Associate ¡ • QC ¡Analyst ¡ Business ¡Development ¡ • QC ¡Technician ¡ • Sr. ¡Research ¡Assoc. ¡ • Process ¡Dev. ¡ • Director ¡of ¡Bus. ¡Dev. ¡ • Research ¡Assoc. ¡ Technician ¡ • Veterinarian ¡ Microbiology ¡ AdministraAon ¡ • Lab ¡Assistant ¡/ ¡ ¡ • QC ¡Analyst ¡ ¡ ¡Glass ¡Washer ¡ • Human ¡Resources ¡Rep. ¡ • Purchase ¡Agent/Buyer ¡ Quality ¡Assurance ¡(QA) ¡ • Recep@on/Admin. ¡ • QA ¡Documenta@on ¡ Asst. ¡ Coordinator ¡ InformaAon ¡Systems ¡ • Analyst ¡/ ¡Programmer ¡ Legal ¡ • Patent ¡AQorney ¡ FaciliAes ¡Management ¡ • Facili@es ¡Manager ¡ • Shipper ¡/ ¡Receiver ¡ Possible to rent vs. own Proprietary & Confidential 7 ¡
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