Valuation of IP is familiar to every investor in the biotech sector and careful due diligence is essential before putting money at risk. We have developed a high-definition understanding of the talent equity of successful biotech CEOs in the European context. In the third of my blogs on this RSA Talent Equity® report I am going to highlight the importance of those leaders (and their investors) who take the long view and attract talented people around them.
Taking the long view
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.
True entrepreneurs have a long-term perspective; they are committed to their cause and take the view that ‘It will be good in the end. If it is not good now, then it is not the end’. In this analysis we can see the importance of staying power and a long-term commitment. An unexpectedly high number of successful CEOs in our study were either founders or very early hires into the business.
Investors, both private and public, have supported those CEOs over the long term. This has almost always been through bad times, requiring changes of strategy, a refocusing of the science or a complete re-think of the whole business. The leadership of a strong CEO through both good and challenging times has, in our analysis, proven to be one of the most significant factors in building value.
This long-term view is what sets the success of this group apart. You can see in the companies we have profiled the long-term arc-of-travel for these CEOs. The most successful leaders have had their eyes focused on the future while managing the twists and turns in the road.
Building the right team
The CEO’s role revolves a great deal around fundraising in this sector, so it’s vital to be able to demonstrate intelligent use of funds to develop assets quickly and efficiently. Equally, it’s also important for the CEO to have a strong grounding in the science that underpins the firm.
Our top CEO cohort has sailed both calm and choppy waters using commercial acumen and deal-making skills to guide themselves and their companies. This isn’t something which can be left until the IP is complete. Today’s highly partnered and deal-rich environment requires commercial strategy to be built alongside, and to influence, scientific strategy.
It’s critically important for CEOs to be multifunctional but good CEOs cannot and should not do it all, so they need the ability to build the right teams, recognising that other people are also key to their success.
To access the report or for more information, click here and, when you want to know more about our analysis, or about how successful people drive successful companies, talk with us.