It Takes a Village to Raise a Biotech Startup: Highlights from the Tweetchat
Carol Gallagher, the former CEO of Calistoga Pharmaceuticals, is glad to see Gilead Sciences spending billions on acquiring a new drug for hepatitis C, rather than spending billions on stock buybacks. And Jason Rhodes, the chief business officer of Epizyme, borrowed a line from Hillary Clinton, on how “it takes a village” to raise a biotech company.
These were a few of the nuggets I took away from yesterday’s live chat on Twitter about the state of biotech startups. This was the third life sciences “Tweetchat” that we’ve done this fall, in which readers have been invited to fire off their questions about what’s new in RNA interference, biotech venture capital, and startup survival strategies. Here are some of the highlights from the afternoon:
—Gallagher on how to get by in a period of scarce biotech venture capital: “Absolutely need to demonstrate efficient use of capital and clear value inflections to get $$ and creativity to alternatives.”
—Gallagher on the role of Big Pharma partners, and other ways to finance R&D: “Pharma budgets under pressure. Disease specific foundations can be great partners e.g. Multiple myeloma, CF.”
—When asked about the effect the biotech venture capital crisis has had on entrepreneurs, Gallagher replied, “It’s more challenging but some was a needed contraction–still believe good companies get funds but challenging for early cos.”
—On the key to success with Calistoga (it was acquired by Gilead for up to $600 million). “Calistoga had a very clear and well-differentiated hypothesis that at each step the card turned over favorably and a Gr8 team,” Gallagher said.
—When Laura Strong, president of Madison, WI, Quintessence Biosciences asked Gallagher about whether “lean/virtual” biotech companies are appealing to people accustomed to raising lots of money, Gallagher jumped on it. “Agree–efficiency a must—if virtual can get it done, then Gr8. Calistoga began registration trials with 23 employees,” Gallagher wrote.
Rhodes pointed out the interesting bind that pharma partners have found themselves in. These companies are hungry for innovation to replace aging blockbusters losing patent protection, but by cutting R&D budgets, they have made it tougher on themselves to form research collaborations with small biotech companies that might plug their gaps.
—As Rhodes @JasonPaulRhodes put it on Twitter, “Hurdle for research collabs high as big pharma R&D budgets under pressure despite need for innovation.”
—While the hurdles are high, Rhodes added they aren’t insurmountable. “Even now, pharma co’s willing to collab if believe partner can deliver (and quickly) w/clear Rx target & patient groups defined,” he wrote.
—When I asked Rhodes if Epizyme is building a “diversified portfolio” of funding sources like pharma companies and disease foundations, to cushion it from the ups and downs in biotech venture capital, he took it a step further: “Creative financing a must, not Series A, B, C, then IPO. It takes a village to build a company, VCs, partners, & founds (foundations.)”
—And, in what might be the first use of Latin I’ve seen on Twitter, Rhodes essentially said there’s an essential ingredient for success in biotech: “Track record of successful execution by leadership & org sine qua non for investors, partners and recruiting.” Another way to put it: talented and driven novices are going to find some hard sledding.
Thanks to all those who tuned in to the conversation, and especially those who entered the fray with questions. I’m intrigued by how these chats bring readers together from all over the map to discuss key topics we write about regularly. For those of you in the biotech business just exploring Twitter or relatively new to it, I’d suggest you “follow” the Tweets from the people below, who asked some good questions during today’s chat.