Stop Hiring Now! Stay Virtual
By Louis Garguilo, Chief Editor, Outsourced Pharma
Even after all these years, writing editorials advising you should not directly hire the great men and women in our industry, still gives me pause on occasion.
But it’s always a short pause. It's often ended by a conversation with someone like Robert Discordia, Co-Founder, President & CEO, EQUULUS Therapeutics.
Like so many of us, he believes that to advance early-stage development assets most economically, a biotech should (a) stay within the virtual model it has selected, and (b) rigorously base that all-outsourcing strategy on its initial business objectives.
Beware of CDMOs luring you into a cornucopia of services.
“I’m a champion of the virtual model and utilizing CROs and CDMOs to support your objectives,” says Discordia, who is also an Outsourced Pharma Advisory Board member.
“However, there are great drawbacks in utilizing those external sources if you don't know what you are doing as an organization.”
What Are You Doing?
An initial, general biotech reply to that question goes something like this:
‘We are attempting to help a cohort of patients by progressing certain assets to the clinic.’
With that as overall mission, says Discordia, internal organization is the first key, and logical service acquisition at external partners is the second.
In those early stages, he says, "structure your biotech and your outsourcing to play to the best economics for delivering your asset to the clinic."
“I'm not saying you must continue to be thoroughly virtual all the way through, but 99% of people starting a biotech will spend the first five years crossing their fingers and trying to ensure every dollar spent turns into three or five dollars down the road.
“So, you can't afford to be paying salary and benefits of dozens of employees. When you talk about personnel, you're going to need to run a very tight ship, and basically only hire at the top of the organization.
‘You may, for example, need a VP of biology. Or maybe a chief scientific officer. If that person's going to be responsible for all the science and other responsibilities, you better not scrimp. You better be getting the best and the brightest, in that case.”
That, says Discordia, is a prescription for hiring and spending wisely.
The point is to internalize a highly experienced but limited contingent. These professionals can be augmented by working closely with talented advisors and consultants, as developments warrant.
Do not, he iterates, hire bodies below those experienced executives.
“Those professionals are at the CDMOs, and in my experience, they are amazing at what they do,” says Discordia.
Don’t Shadow Your CDMO
Discordia asks us to think about this question:
How many CEOs duplicate the personnel or services in-house they are already outsourcing to external partners?
The implied answer is too many.
That’s unfortunate on a company-by-company basis, and more widely makes for a less efficient new-drug development and manufacturing outsourcing industry.
It’s inefficient, in effect wastes the talents of professionals on both sides, and is bad for patients ultimately.
“Too many of our biotechs create these shadow organizations, and they are paying for it, figuratively and literally,” adds Discordia.
“Just pay once for what you need. Trust your CDMO to do what it's supposed to do. Trust it's quality systems. Yes, trust but verify. Do audits, perform your due diligence. That’s what your top professionals are supposed to do.
“But don't do things like insist on reviewing every single batch record,” he continues.
“You’re paying the CDMO to do that. They have their SOPs and systems in place – Why are you doing it, too? It's an unnecessary loss of time and money.”
Granted, nothing is more important than the safety and quality of the drugs, but Discordia criticizes “bloated organizations” at biotechs attempting to attain those goals.
“You need an accomplished head of critical functions. That's all you need!” he says vehemently.
“Maybe if you've got five programs going on, you need help. But I know of organizations with only one or two programs and ten or more professionals internally. Why?”
Take It To The Clinic
The north star is staying true to that original, virtual model you started out with.
As a biotech, if your ultimate desire is getting your new drug to the marketplace and patients, then conversely, do not entertain thoughts of going from the cradle to late-stage or commercialization.
“Phase three studies?” says Discordia incredulously. “This is not for most startup biotechs.”
“At that point, there’s a transition. I know from my days at Bristol Myers Squibb that before phase three, everything is rather like noise in comparison to comes after. At phase three everybody starts to pay attention.”
His advice is to keep your head down and focused until later-stage trials, but then look to take full advantage of that attention.
“Our goal, then, is to be able to proclaim, ‘I've got serious clinical proof of concept.’”
As per all the above, the method for getting there most successfully is undertaking only what is necessarily sufficient to meet endpoints, “and to do it as economically as possible.”
That includes ensuring your CDMOs are onboard with your thinking and endgame. Together, ride that virtual biotech-service provider model through phase two if need be, and “that's where you out-license or partner with pharma.”
Otherwise, says Discordia, you’ll attempt to change your company into a larger organization with the wherewithal to conduct multi-centered sites, and attempt to “handle all that phase three stuff.”
To be clear, a virtual biotech will need a level of clinical expertise prior to that, and yes, you might have needed to do some more extensive, multiple-country trials, depending on several factors.
But, Discordia believes, for the most part, you can handle things prior to phase three “staying true to your original business model and scientific goals.”
Anything further and you're incurring severe risk, expense, and organizational change.
“I assert that 99% of biotechs aren't set up for it. I think it's a mistake,” he concludes.