New management talent needed to support biotech renaissance
2014 saw VCs plough $6.55bn into the biotech sector, with Europe alone seeing a year-on-year increase of $1.24bn. The figures tell a story of unabated interest in the life sciences: more deals, more partnerships and more investment. This new market is enabling biotech firms to raise funds to invest in small and large-molecule compounds as well as devices, digital healthcare and healthcare data.
New streams of funding
With the initial drive coming from the US, Europe is being refreshed by a broad range of new investment models including crowd funding, angel investment and specialised crossover funds. VCs and public companies acting as ‘operational investors’ are also active in growth areas of life sciences such as personalised medicine. New ‘patient capital’ investors (e.g. Woodford) are breaking the old model of ten-year fixed funds and investing for the longer term.
Given this vibrant environment, it’s easy to underestimate the essential value that biotech leaders bring to the success of the sector. Without being able to match talented leadership with the burst of funding and innovation that is catalysing the industry the sector won’t fulfil its true potential. It will just create a wider circle of unhappy and sceptical investors.
The first of our new series of RSA Talent Equity® reports on the most successful continental EU biotech companies shows how talent and IP combine to form the two pillars of a successful biotech business. Using data from EvaluatePharma and other industry sources, we analysed 551 venture-backed biotech companies and their strategic transactions, including 3,105 licensing deals, 178 IPOs and 629 M&A transactions. We applied objective performance measurement criteria, our own talent expertise and industry knowledge to vet the selection of the top CEOs.
Due diligence on talent is as important as it is on IP
Our report shows quite simply that IP and talented people are two vital parts of the success equation, without one you’ll struggle to make the most of the other. Valuation of IP is familiar to every investor in the biotech sector and careful due diligence is essential before putting money at risk. Because of the vital importance of people we believe that bringing business leaders into a company can and should be due diligence-led. Many companies focus on hiring cost rather than ROI based on proper due diligence. This is exactly the opposite of how they think about their R&D assets. Our insights explain why we believe that deep analysis and due diligence provide business with valuable new intelligence when searching for new leaders.
Investors and company management need equal decision support and comparative analysis of talented candidates as they do for promising IP. To access the report or for more information, click here.
If you want to know more about our analysis, or about how successful people drive successful companies, talk with us.