Advice Received, But Not Taken: Tales from the Biotech Trenches
Biotechnology is a challenging business, with drug development timelines that are long, costly, and dependent on the approval of government regulatory agencies. The vast majority of biotechs never succeed in developing a new drug. There are many issues that contribute to whether or not a company achieves its goals and makes it in the marketplace. These include great science, solid financing, and quality executive leadership. A little bit of luck never hurts either.
One of the other key factors is getting top quality advice, and then successfully executing a plan based on that information.
Different companies will have distinct needs: some may need financial guidance, while others need help with experimental design, clinical trial sizing, patent strategies, or regulatory assistance. Getting the right advice may determine whether your company survives and thrives, or becomes a footnote on someone’s Biotech Graveyard Website. Thus, it’s critically important to tap into the expertise of those who can truly help you.
Experience has taught me, however, that there are two kinds of people seeking advice: those that really want it, and those that actually don’t.
I’ve outlined above the rational for the actions of the first group. It’s a pretty straightforward approach: find an expert, tap into their experience and knowledge base, adapt their advice to your particular situation, and make it happen. More confounding is this second group, the ones who don’t actually want the advice they request. They seek opinions merely so they can convey to others that expert advice was sought. However, they are not really interested in what their recruited experts have to say. As Josh Billings observed, “most people, when they come to you for advice, come to have their own opinions strengthened, not corrected.” Let me share a few stories from the biotech trenches:
Several years ago, a well-known biotech company proudly announced the appointment of a world-class scientist to their Scientific Advisory Board. Landing this guy was a great coup. He was well-known and respected as a major domo in several fields, and was a named inventor on some very lucrative patents. There was no doubt he could serve as a fountain of wisdom and knowledge for the company’s young staff. A while later, I ran across a senior executive from the company, and I queried him as to how many excellent ideas had been provided by their highly touted Thought Leader.
I found his answer both surprising and disappointing, a clear reflection on my naiveté at the time. Not only had the Thought Leader not given them any new ideas, he had failed to provide significant input on projects that the company was already engaged in. It turns out the Thought Leader actually missed a good percentage of the Scientific Advisory Board meetings due to his frequent “Please Stroke My Ego” world tours. Management was OK with this, however. The true purpose of having this Thought Leader on the Advisory Board was simply to mesmerize the company’s investors, to reassure them they were a top-tier organization capable of bringing a heavy-hitter onboard to provide counsel.
The company would trot out this guy’s name and reputation in a heartbeat, but consistently failed to take advantage of what he might have been able to offer. Whether this reflected more poorly on them or their Thought Leader is difficult to determine. I can’t say if he was doing this for the stock options, to enhance his own reputation, or was just too egotistical (like many actors) to turn down this featured role with the company. Maybe he signed on with good intentions, but got derailed by his (numerous) other responsibilities. The bottom line: the corporation would have been better served by signing up a young lion (or lioness) for their Advisory Board whose insights and opinions might have been both readily available and valuable.
A consultant I met at a conference further enlightened me with a story of how she was invited to visit a biotech company and render an opinion on the relative value of their various research and clinical development programs. However, it turns out that the company really wasn’t terribly interested in her opinion. She was brought in by senior management solely to rubber stamp the existing programs for the benefit of the Board of Directors. Simply confirm that all is wonderful here, and you can go on your way with check in hand. Opinions that are bought and paid for remind me of the movie business, where ads for the worst films you’ve never seen are peppered with quotes from people you’ve never heard of, extolling the many virtues of what most viewers would describe as a pile of visual rubbish.
The examples above indicate that the appearance of getting good advice is often perceived to be more valuable than the advice itself. This same type of thinking is what led to many of the problems seen on Wall Street in recent years, where facts were not supposed to intrude upon the carefully crafted images of major financial companies. What came to be valued was the “sizzle,” not the steak. This façade was not good in the long run for energy traders like Enron, mortgage traders like Countrywide Financial, or those engaged in a scientific enterprise like biotech. And if you think biotech investors don’t respond to “sizzle,” read Alex Prud’homme’s expose The Cell Game: Sam Waksal’s Fast Money and False Promises—and the Fate of ImClone’s Cancer Drug.
Scientific advisors occasionally do get discarded, even if they provide good advice. Why? Maintaining a Scientific Advisory Board is not an insignificant expense for a small biotech company. Airfare, hotel, meals, and taxis can add up in a hurry, and planning and coordinating the visits can significantly eat into staff time. A friend of mine related recently how he terminated his company’s Scientific Advisory Board after five years of service. He decided to repurpose the money and hire consultants to resolve specific questions on select programs. It’s not that the Advisory Board’s advice was faulty; he simply found this a better use of the company’s limited financial resources.
Sometimes, though, as Erica Jong stated, “advice is what we ask for when we already know the answer but wish we didn’t.” I was once hired to render an opinion on the merits of a small biotech’s research program. Unfortunately, their lead (and only) drug candidate had been selected on the basis of a single publication from which the company had grossly misinterpreted the data. Although they had a strong patent position and a reliable manufacturing process, it was clear that their “drug” had virtually no chance of working. Trust me when I say that this is not the kind of message one relishes sharing with a company’s CEO over breakfast. After relaying this distressing information, I advised the company to abandon the program and find something better to work on (which, under the circumstances, could have been almost anything). Their CEO, however, had no intention of doing so because, as he put it, “our investors gave us $12 million to take this drug into the clinic, and that is what we are going to do.” Not surprisingly, they shut their doors not long thereafter. I always wondered, though: is that really what their investors would have wanted them to do? If they had known that the “lead” drug had no chance of working, would they have signed off on a complete change in direction?
So my advice for those of you who seek guidance is as follows: Find someone whose counsel you trust, and when they give you advice, take it. Why hire an expert if you’re not going to take advantage of their expertise? Keep in mind that if the advice you solicited was free, you may very well get exactly what you paid for. Finally, if you really aren’t interested in getting advice, don’t ask for it. This will be less frustrating, in the end, for everyone concerned.