From The Editor | January 28, 2019

A Biopharma CEO's Revelation: "We Outsource, Therefore We Exist"

Louis Garguilo

By Louis Garguilo, Chief Editor, Outsourced Pharma
Follow Me On Twitter @Louis_Garguilo

A Biopharma CEO’s Revelation

The new chief executive slowly made her way to the makeshift stage in the largest of the three meeting rooms at the young biopharma where she was taking leadership.

The company’s first founder-CEO had been a researcher, and discovered a novel platform by which he and his small team had identified three promising anti-cancer lead candidates. He’d also been adept at rounding up angel and other early-stage funding to purchase some small-scale but cutting-edge equipment, and to pay salaries and rent on modest lab and office space at a nearby university’s science-business incubator.

“Big shoes to fill,” the new CEO knew the employees were thinking.  

She had a degree in chemistry, and a PhD in philosophy. Perhaps not your typical candidate for chief executive at a start-up biopharma. Nonetheless, she’d been selected in mid-December; today’s was considered her first official full-company meeting, in which she’d outline what lie ahead. It was January 3rd… a new year, and a new beginning for the company.

She’d thought deeply about the company and its future. What was at its core?

The technology – its build-out as a platform? That could be a source of recurring revenue, and/or bring more attention from a bigger biopharma suitor.

But no. The core at this juncture were those lead candidates – moving them efficiently into and through development and the clinic had to be the focus. That’s what she wanted the now 35 employees of the company to understand clearly today.

“Good morning, everyone,” she started in a slow but steady voice.

“Thank you all for being here.”

The Speech

“In fact,” she said, looking around the room, “this morning I’d like you to consider the very idea of ‘being.’ Of our existence as a company. Of each of your individual existences within.”

She let those unusual words sink in.

“I believe most vital for each one of us is our advancing of the compounds we’ve discovered and nurtured, to a new level of development. And hopefully in a not too-distant day, to commercialization.

“To accomplish that, our most important challenge is to become efficient internally, within all aspects of our organization, for the purpose of working effectively externally, with our service providers, and in performing all our outsourcing activities.”

She was met with more than a few expressions of surprise.   

“So let me ask you directly: Why do we outsource?”

She let the question sink in. Then in a stronger voice:

“Why do we outsource? What is our most fundamental objective? Is it for financial reasons – a function of funding and financial resources? A function of time and human resources? Is it related more to our specific technology and unique compounds?

“Yes, all of those,” she self-answered.

“But how about on a larger plane: Don’t we outsource because in fact it is a function of our strategic operation – the actual business model for us, and so many other biopharma? So every one of you, and our young company, can continue to compete, to survive as a biopharma business. Because fundamentally this is who we are now. This is our existential exercise."

She slowly panned the entire room.

“Think of it this way: If none of what we need to take effective action on over the next months actually existed – no analytical-services support; no development or scale-up assistance; no access to GMP facilities, larger-scale equipment or advancing supply-chain technologies …

“If none of that existed: Would our company exist?”

The room was silent. The philosopher-CEO then said:

“We outsource, therefore we exist.”

Biopharma’s Descartes Moment?

Today, arguably nothing within a biopharma’s strategic development plans for the efficient utilization of its limited amount of resources and time, is more important than the activities directed at the selection and management of external services and partners.

With all due respect, more chief executives, like our CEO above, should be doing a better job at communicating and leading on this front. They themselves should gain a fuller recognition of this means to their organization’s ultimate ends. They must align the entire internal organization for optimal functionality with the outside.

Yet, it does appear CEOs delegate too much of this leadership. I notice this when talking with executives at biopharma, who know less than one would expect about the outsourcing their organization undertakes. Also noticeable is how little they want to talk about their external extensions. Perhaps they have their reasons.

But the time has come: 2019 is biopharma’s “Descartes moment.”

Or at least it should be.

Because to reach this corporate climax, chief executives need their own further epiphanies, much like that of our philosopher-CEO.

Was Descartes A Supply-Chain Expert?

The new CEO was now wrapping up her address.

“Are any of you – scientists, engineers, people or project or production managers,  administrators or any others – familiar with René Descartes?” she said with a wry smile.

A hand went up in the middle of the room. “Isn’t he that supply-chain consultant we brought in to help us out a few months ago?”

Laugther all around, including from the chief executive.

“Not quite,” she replied. “Although we might want to better analyze that particular gentleman’s supply-chain philosophy, don’t you think?”

More laughter.

“I believe all of you are aware to some extent of Rene Descartes, known as the father of modern philosophy, and yes, presumably one who knew little of drug development, outsourcing, or supply chains.

“But centuries ago he was wise enough to bring forward a “new science,’ based on internal reflection and external experimentation.”

“And,” she said after a short pause, “isn’t that what we are doing to a great extent?”

“So this is what I ask of you: Each day as you work here, recall that we must fully understand who we are, and thus organize ourselves to form a greater union with our partners on the outside. Do this so we can continue to succeed … to exist.”

She looked intently around the room a last time.

“And do it… so that someday … our drugs ensure more patients continue to exist as well.”