BIOTECH 2012: Panel of CEOs — Lather, Rinse, Repeat

*Ed. note: The following is part of a series covering the 12th Annual Biotech Symposium, which took place October 22, 2012 in Philadelphia, PA. Stay tuned for the conference wrap up and coverage of additional programming at the event.*

Coming away with words of wisdom from experts is one of the priceless advantages of attending events such as BIOTECH 2012, held Monday October 22, 2012 at the Sheraton Downtown Hotel in Philadelphia.

Hosted by BioNJ, Pennsylvania Bio and Delaware Bio, their three word mission: “Find. Fund. Facilitate.” was clearly accomplished.

Networking is still an integral part of these cerebral gatherings, however programming at this conference provided attendees with  candid information, stimulating conversation and a new perspective on the industry.

One of the day’s informative panels, “Panel of CEO’s- Lather, Rinse Repeat” offered an insider’s look at some unique ‘serial’ entrepreneurs who have been through up to five exits (only to do it again) with different companies in the biotech space. One key item these five panelists all seemed in agreement on was the level of flexibility — the stamina (and the stomach) required to continue to invest the time and energy with new projects once they have made the final exit.

CEOs mused on key points to the ‘standing room only’ covering “What to do and what to avoid doing” when planning an exit strategy. Panelists confirmed that company executives should be thinking about an exit immediately from the inception of an idea.

The panel, sponsored by Fish and Richardson P.C. and moderated by Executive Leaders Radio Herb Cohen, asked for insight from seasoned entrepreneurs: Bob Radie, President and CEO, Egalet Ltd; Donna Tempel, President and CEO, Drais Pharmaceuticals; Steve Tullman, Chairman and CEO, Ceptaris Therapeutics; and Geert Cauwenbergh, President and CEO, RXi Pharmaceuticals Corp.

The panel began with general points about sale and funding. Geert Cauwenbergh, having been through five exits to date, suggested to ensure the company is on every radar screen — but not to over talk about it or over sell, as this may lead to a less than fair market price.

Steve Tullman added, “don’t let the cash force the sale…because buyers sense that”, also leading to a less than fair market price. Donna Tempel warned that the exit will likely never look the way you planned. Bob Radie went further, noting that each exit is different and there’s no formula. He stressed the importance of making sure your team is in it for the long haul.

This segued into the topic of a management team.

According to Radie, the key is surrounding oneself with versatile people. In a roller coaster-like business you are better off with people who don’t get too high or too low. He also recommended choosing a diverse team of people who can wear ‘multiple hats’. Cauwenbergh suggested to delegate and empower your team so that they are eager to work hard and consequently more productive. Tullman added, “Mistakes are expensive. Hire the right people and pay them well”.

One audience member posed a critical question of what one can expect in the pre-clinical stage. All panelists agreed the exit must be considered, but realistically it is difficult to sell an idea very early on.

Radie recommended to look for companies already doing work in that space for very early scientific ideas. Cauwenbergh continued by saying that while everything is for sale, it is very difficult for companies in pre-clinical stages. Outlicensing to a company that needs a pipeline was another suggestion.

A question from a first time entrepreneur: “What if you realize after signing a deal that you took the ‘wrong’ money?”

Cauwenbergh again had some promising advice — the minute you raise money, raise more money. Donna Tempel offered, “manage through (the deal) as though it were a marriage and be as flexible as possible because it’s tough to get out”.

It’s difficult to imagine the concept of building a company, planning for the exit, and then ultimately closing a deal, just to do it all over again. This Panel, Lather, Rinse Repeat helped to alleviate fears and make the concept more palatable. This frequent issue that company executives deal with — raising enough money or selling a company — creates the need to find a new project to work on.

On one hand it’s a celebration, on another it’s, what’s next?

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