Welcome to part two of Business Concepts
for Life Scientists, it's a strategy lecture.
My name is Sandy Ruggles and
I'm going to take you through the second half
of the presentation that we put together.
I am a former UCSF graduate student.
I have a PhD in biophysics.
And more recently, am a strategic marketer
in medical device and technology companies.
So in the first half of the presentation,
Deb Dauber took you through value proposition
and how value proposition can define
the strategy for an enterprise.
What I'm going to do now is take
you through the other element that defines
a strategy. And that's the organizational
context, and then from there
how both value proposition and
organizational context feed into an enterprise
as a strategy.
So what is the organizational context?
Organizational context defines, essentially, the
situation that an enterprise finds itself
in. So there are three main questions
that I would address here.
Where in the development cycle
is the enterprise?
What is the structure of the enterprise?
And what resources are available
to achieve the enterprise's objectives?
So let's start with developmental stage.
The developmental stage of the enterprise
is really going to shape the strategy.
In biotech and pharma, there's a very
specific cycle that products follow from concept
to clinic to market.
And that cycle is one that has very clear
milestones and progressions amongst it.
So an organization, or an enterprise,
may start one product, but they'll also have
a second product and a third product
that are in their portfolio that they use
to progress their objectives forward.
So the developmental stage of the enterprise
is going to really define the strategy.
When an enterprise is really early in
the pre-commercial lifecycle, say in the basic
research section, their focus is realy
going to be on validating that entity
for clinical development. A clinical stage
organization is focused on their clinical studies
and a commercial stage organization
is focused on generating as much revenue
as possible off of that entity that they took
through the product development.
Second, let's talk about organizational
structure. So an enterprise can structure
themselves in many, many different ways.
We're going to talk about four common
ways an enterprise is structured.
And this is from a very high level.
So in the bay area, you can find organizations
that are in any of these four buckets.
A fully integrated therapeutics company,
so one that starts with basic research and has
manufacturing, clinical, and sales
capabilities. Good examples of these are
Genentech, Gilead.
Contract research organizations
are enterprises that are focused on a specific
part of the development cycle
and have expertise in assays or
animal studies or clinical studies.
A virtual drug development structure is
one that is very lean on full-time employees
and instead progresses through the development cycle
by hiring contractors or other outside entities
to perform the development work.
And the last might be an organization
that's focused solely on preclinical validation.
So they partner all of their clinical development
and downstream sales with a larger
either pharmaceutical or biotech company.
Third, we're going to talk about the
resources available to the enterprise and how that
affects the strategy that an enterprise
can pursue. And I've broken this up into
two different areas, funding and organizational capabilities.
Both of these act as constraints
on the type of strategies that can be pursued.
So when we talk about funding, we're talking
about the budget available to fund
near term actions and any investment for growth.
So funding breaks up into three different areas.
The source of the funding, public or
private. The amount of the funding, whether that's
small amount of money or many hundreds
of millions of dollars. And the timing
of that money. So whether that's money that
is coming in 6 months or is money
and funding that can guarantee 3-5 years
worth of work.
Second, we're going to talk about organizational capability.
So this is the capacity of the enterprise
to actually reach their goals, given the resources
that they've built. So this affects
the speed and the type of work that can be
accomplished by the enterprise.
So I've broken this into three parts, as well.
We're talking about the people and their expertise.
Their ability and capacity to meet
certain goals and objectives.
We talk here about equipment and infrastructure,
so what does the enterprise have
in order to leverage to meet the goals and objectives?
And last is organizational structure.
So how many senior leaders versus
technicians does an organization have
and how have they been structured in order
to meet their goals?
So think of this as the framework within
which an organization is able to accomplish
their strategies.
So recap, organizational context is the situational
confines for the enterprise. And we've talked
about three different topic areas: development
cycle, enterprise structure, and the resources
available to the enterprise to meet their objectives.
So both of these, the value proposition
the value that the enterprise is bringing to the market,
the unmet need that they are pursuing.
And the organizational context, so the
restrictions and the box within which
an organization can work within,
are feeding into the strategy.
So the strategy is really the milestones
and the map of how an enterprise is going
to reach its long-term goals.
So, we can break up the strategy
into three different sections.
Long-term strategy, so strategy that's
out further than five years is
very aspirational. This is where the enterprise
wants to go and what they want to be.
The mid-term strategy is focused on
3-5 years and it's very preparational and directional.
So an example of this might be
the expectation to add an entire manufacturing
group or to add an entire capability
to the organization and grow that
over time. The last is the short-term
strategy, and the short-term strategy is really focused
around the next 1-2 years.
It's extremely tactical, focused, and incremental.
So really, it feeds into goals and objectives
that every person, stakeholder, has with regards
to the enterprise over the coming year.
So if the short-term strategy is where
the enterprise is going, the goals and objectives
would be where every individual within the
organization is headed personally over
the next 1-2 years.
Let's talk about Catalyst Biosciences
in year 1 as an example.
So Catalyst was really founded on the idea
of taking proteases, redesigning them so that they
would target novel proteins involved in
disease. And in particular, so that these
proteases could be used to go after targets
that were not amenable to antibody therapeutics.
And so the organization was in year 1 was
nascent, was really early. So let's talk about
the development cycle. So Catalyst
was in preclinical discovery basic research
in that year 1, with the goal though of becoming
a fully integrated biotherapeutics company.
The funding was $10.2million in Series A
and the capability was small.
10 people, mostly focused on proteolytic
assay development, automation, cell based assays,
and animal studies.
So what does that turn into from a strategy?
Well, we talked about long-term. Long-term Catalyst
was focused on becoming a publicly traded
fully integrated biotherapeutics company.
Of both getting into the clinic and through the clinic
to commercial of proteolytic therapeutics.
Mid-term, well how do you reach that long-term
strategy? You have to get into the clinic.
So the mid-term strategy was to advance
proteolytic therapeutic candidates forward enough
that they were into clinical study. And being able
to show effects in human patients.
Short-term strategy, 1-2 years, what needed to
be done? Well, the technology was being pulled out
of a university, so it needed to be industrialized,
it needed to be automated, and it needed
to be shown in multiple proofs of concept
validating experiments. And so
the short-term strategy was to find
preclinical partners and to do
internal development to progress the technology
forward enough that candidates can be created
that would advance into clinical studies.
So, strategy has a circular nature.
Strategy is never static, so in large
organizations, this is often an annual
strategic planning process.
A focus on strategy in the first quarter of the year
leads to forecasting and portfolio
planning, feeding into budget decisions
for the coming year, usually that's in the Q3.
And then in Q4, a focus on goals and objectives
for everyone in the organization. So in the coming
year, they know exactly what they need to accomplish
to meet the organization's goals.
So you see this continue over and over
and over and over again. And annual focus at the
beginning of the year on long-term strategy,
where does the organization want to get in 5-7 years?
And how will they get there? Leading to
that short-term series of goals and objectives.
Now in a large corporation you may do
this every year, in a small organization
like a startup, there tends to be a more static
strategy -- long-term strategy -- that lasts for
a couple of years, with the goals and objectives
changing on a six month to one year cycle.
So we're going to use iPierian as an example
here to talk about a large strategic change
that happened and when and how that happened.
So iPierian was founded in 2007
based as a what company, on the technology
of induced pluripotent stem cells as a
platform with which to develop novel
therapeutics. After 4 years of work, they had patents,
they had made some progress, but the board of
directors came in and made the decision to
fire most of the senior leadership of the organization,
bring in a new CEO named Nancy Stagliano,
who changed the direction of the organization
and the value proposition and strategy of the
organization. So she took iPierian
and refocused it as a why company,
into neurodegenerative disease
as a focus area and a technology of
monoclonal antibodies as the therapeutic
platform that they were going to pursue.
So leveraging the expertise in pluripotent stem
cells as a way to move forward in a specific
clinical area. And because of that
we have to imagine that a number of preclinical
projects had to be stopped. They didn't
fit within the why. Those in some cases
were spun out into an organization called
True North, a focus on orphan drug indications and
Nancy worked as the CEO of both of those
corporations for a period of a couple of years.
In 2014, iPierian was acquired by Bristol Myers
Squibb for $175million in initial payment,
and $550million in long-term milestone payments.
And True North continues as a clinical stage
organization with Nancy Stagliano as the CEO.
So, let's talk about where this leads
and where you can look for and think about
additional information that you might want to pursue.
So analysis for developing strategy uses
inputs from a couple of different areas, competitive
landscape, market opportunity assessment,
market segmentation, metrics. How is a project
progressing or how is a commercial
product selling? And portfolio. So analysis
of all of these areas will feed into
a strategy that uses the following skills.
So budgeting, forecasting, enterprise growth
planning, commercial planning, and program
management are all skills that are needed
in order to develop a robust organizational strategy.
So let's talk about a parallel to academia.
Here are some questions to consider
as you think about strategy in the context
of an academic focus area.
So first, what is the development cycle of
projects in your lab? Where are they between
basic research and publication?
How many projects do you have in each part
of the development cycle?
What are the organizational capabilities
of the lab? How many grad students,
postdocs, lab managers, are in that lab?
What kinds of equipment do you have, in order
to do the experiments that you're looking
to do? And then, what are the near and
long-term strategies for your lab?
So, what do you plan to accomplish
in the next year versus plan to accomplish
in the next 5 years and what
needs to be done in order to meet those milestones?
So wrapping up, here's some resources
to learn about business strategy.
You can look for university course work
primarily through a business school that
may provide information on -- theoretical information --
on business strategy. There are courses
on iTunes and Coursera that you can
look into. The Harvard Business Review
has excellent case studies that you can use
to understand business strategy. And
FierceBiotech or the Fierce umbrella
of daily newsletters can give you
focus and understanding of what it is
going on a day to day and week to week
basis with enterprises within a specific field.
And last, if you have a certain company
that you're really interested in, earnings calls and
publications from those public companies can give you
a huge insight into their business strategy.
So we've reached the end of the presentation,
thank you for watching and I hope
this was informational and educational.