Money is tight for emerging life sciences companies. Interest rates are up, VC investment, M&As and IPOs are way down, and there are persistent rumors of recession. People are rightfully concerned, but there’s no need to panic. We have faced similar challenges before, and though the path is never easy, great science will see us through.
We are living in an age of exceptional scientific advancement. The life sciences sector generally, and oncology companies in particular, are driving massive innovation: cell and gene therapies, next-generation kinase inhibitors, immunotherapies, bispecific antibodies and many others. There is no better time to pursue new therapies to address unmet needs.
During my 25 years in oncologic drug discovery, development and commercialization, I have seen how economic cycles can skew priorities and slow progress – but we cannot let that happen. Rather, we must capitalize on this wave of innovation and maintain our obligations to patients, employees, partners, and investors. To meet these challenges, we must double down on the fundamentals and never forget that science marches on independent of Wall Street.
The sky is not falling (unless we let it)
Even in the best of times, biopharma is a risky business. There are constant pressures from competitors, investors, regulators, and legislators, as well as the macroeconomic climate. To compound matters, biology is complex and often refuses to cooperate. More often than not, agents that show great promise in preclinical studies fail to achieve regulatory approval.
These pressures get compounded when VC and other investment sources dry up, as they did in 2022. Companies can become overly cautious with their financial planning, spending decisions, and risk management strategies. These retrenchments may give company leaders temporary comfort, but they can delay efforts to conduct preclinical and clinical studies, pursue regulatory approvals, hire appropriately, and perform the myriad other tasks required to drive a healthy innovation cycle.
The only real way to mitigate these challenges is to relentlessly focus on execution and remain strategically bold. Regardless of whether the company is working to become a fully integrated, commercial-stage powerhouse or angling for a buyout, executing on the fundamentals will pay off when the market inevitably corrects.
My own career trajectory has been driven by the restless desire to develop treatments that transform patient outcomes. I am not alone in this – few could withstand the inherent challenges of biopharma without the opportunities to improve health and quality of life.
Those daily realities can make us too careful, but we are not in this business to be incremental. Nor should we implement crushing corporate bureaucracies to eradicate risk. We must ensure that fear of failure does not stifle opportunities for success. We cannot allow the fear of doing the wrong things make us forget how to do the right ones.
While judicious caution is warranted, abundant concern over touching a hot stove can slow innovation and stunt an organization’s growth. If market gyrations generate paralyzing fear, innovation grinds to a halt. Promising drug candidates will only limp towards the finish line, which is something patients and investors do not want to see.
Now more than ever, we must retain the confidence to invest in our businesses – we’re not going to save our way to prosperity. Rather, by making bold financial choices now to accelerate our medicines through the pipeline, we set ourselves up to attract new investment.
Being bold means swinging for the fences. That includes identifying therapeutic areas with high unmet need and developing best- or first-in-class molecules that can spur major progress and transform patient outcomes. It’s important to make sure only value-added governance is in place, providing the space employees need to generate creative sparks and propel innovation.
You need to start with a rigorous and judicious selection process to advance only the most promising programs into clinical trials. If study results show that promise, do double down on investment and accelerate development. However, if results fall short of expectations, don’t hesitate to immediately kill the program. Through this process, companies can efficiently direct resources to the most differentiated molecules and subsequently accelerate the pipeline.
Go/no-go decisions must be governed by rigorous discipline. We may become invested in a specific compound, but if it’s not best-in-class, we must let it go. These decisions are tough, but they must be made expeditiously and without remorse.
Engaging the right talent
It’s easy to spend a lot of time on the product pipeline and too little time on the employee pipeline. But putting the right people in place is arguably the most important thing company leadership can do.
The number of life sciences professionals grew by 3.1% last year to a record 545,000. This, again, illustrates that we cannot let Wall Street’s ephemeral nature dictate our strategies. The talent economy is booming, and we have great opportunities to recruit the best.
Companies must build out the necessary internal capabilities and infrastructure to support their evolution, including in-sourcing some activities that were out-sourced during the start-up phase.
The key is to build out required functions at the right time. If a company’s most advanced drug is launching (optimistically) in three or four years, it probably doesn’t need a chief commercial officer today. Existing staff may have to stretch a bit, but with the appropriate guidance and training, they will be up for the challenge.
As our companies transition through different phases, we must recruit people from diverse backgrounds – it’s both the right and smart thing to do. According to BIO, not enough diversity remains an industry-wide issue, especially among small organizations. New voices bring new ideas, and we can never have too many. In turn, good ideas support sustainability. If we don’t invest in diverse workforces, we’re not going to unlock our organizations’ full potentials.
Remember, when we interview employee candidates, they are also interviewing us, and they are looking at the hiring group’s composition. Diversity gives us a leg-up because it shows the best candidates they belong here.
Clarity of vision
Science is a team sport, and the team must remain aligned. That means understanding what the company is doing, what it’s not doing, and why. Aligning the team to a singular vision gives people ownership and instills accountability.
By maintaining this clear vision, nurturing a robust pipeline, attracting top talent and partnerships, and understanding internal strengths and weaknesses, companies can position themselves for success.
Despite the current investment climate, we must proceed with optimism. Developing meaningful medicines is a difficult business, and there will be many failures. However, patients are waiting for new treatments and expect us to act with urgency.
While we should acknowledge the potential for challenging scenarios, we should never be governed by them. Now more than ever, I encourage my industry peers to embrace bold approaches and continue to challenge the status quo so that we can work together to ignite a new era of medical breakthroughs.’
Photo: Urupong, Getty Images