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A recent survey of European biopharma companies and board members revealed that 80 percent of firms find access to qualified senior executives to be a challenge, with the toughest spot to fill being the "seasoned CEO".
A recent survey by Catalyst Advisors of 40 European biopharma CEOs and board members revealed that 80 percent of firms find access to qualified senior executives to be a challenge. And this is one challenge that will get worse as continued biopharma IPOs increase the competition for proven leadership.
The survey found that the toughest spot to fill in Europe was the “seasoned CEO”, followed by the Chief Medical Officer.
Following the publication of the survey, PharmExec spoke to Catalyst’s Simon Bartholomew, who believes “EU firms need to respond forcefully” to this biopharma talent management challenge.
PharmExec (PE): Do you think small firms are becoming more attractive when it comes to recruiting talent?
Simon Bartholomew (SB): Absolutely. There’s a push and pull factor. On the push side, Big Pharma isn’t necessarily a secure place to be: you could be taken over; you could have your division hived off, as GSK has just done with its oncology division; you could be closed down. There are no guarantees.
On the pull side, biotechs have funding these days that they didn’t have three or four years ago. The rewards are there, the challenges are there, and the science seems to be there, so biotechs have all the ingredients for success.
PE: Can you talk a little about where the key talent shortages are or will be?
SB: The “classic shortage” is for the biotech company CEO. It’s hard to find someone like that - someone who has training in Big Pharma, who ideally has public company experience, who’s done some deals, and is flexible on location.
In the US, of course, there are hundreds who fit this profile, but in the UK there are probably less than ten and in Europe probably less than fifty. So as a recruiter in Europe you have to think about getting great people who haven’t necessarily “been there and done it”.
Companies have to be pragmatic and reasonable about the kind of person they want. Companies also have to have great science that’s going to go somewhere, and be well funded.
PE: The US must have had this biotech-CEO problem at first…?
SB: My view is that in the US, when investors know they’re onto something they continue to fund it. But a lot of investors in the UK and Europe fund to sell; they have a view that the business is going to be sold in the one, two, or three years. In the US, historically, a lot more money has been raised for new companies than in Europe. In Europe, companies get twenty or thirty million dollars to keep them going for a year or so; after that the CEOs complain that they’re fundraising all the time because they’re always short of money.
Remember that Humira, now a $6bn a year drug, was invented by the UK’s Cambridge Antibody Technologies (CAT), but they only got one percent of revenue from the drug was sold on the cheap to Abbott. It was a great British success story, but nobody in the UK made any money because CAT, at the time, didn’t have money.
PE: How important is cultural fit for candidate selection?
SB: It’s all about the way organizations operate. Are they fast paced? Are they bureaucratic? Do they make decisions on the hoof? Do they provide infrastructure? Do they expect you to organize your own calendar, your travel? What kind of a company is it? Whether someone fits into that - or doesn’t - is critical to the overall success of a company.
One of my clients explained it best when he decided to choose Candidate A over the very similar Candidate B. When I asked why, he said, “Candidate B doesn’t quite pass the train-trip-to-Manchester test, or the flight-to-New-York test.” That is, he wasn’t the type of person you necessarily wanted to spend six or seven hours sitting next to! In a small company, that’s an important consideration.
PE: What advice would you give to the European biotech sector about recruiting top talent?
SB: It’s difficult to accept this if you’re a private equity firm needing to make an exit, but businesses get bought not sold. Going around saying “We’re selling this company in a year or two” almost immediately decreases its value, particularly if there is no money at the end of that year or two. But positioning a company for future sustainable growth - “We’re going to grow this thing, we’re going to take it somewhere” - is a cleverer way to go, and it’s also more attractive when it comes to recruiting people. I think by adopting this approach Europe might have more biotech success stories like the US.
For a copy of the European biopharma survey, Aurea Baring, Catalyst Advisors email@example.com