Date: Friday , March 07, 2014
Isn\'t it really surprising that the largest industry in America, healthcare, has not generally been conducive to adopt entrepreneurship as readily as some other industries? Usually, the main barriers appear to be structural, economic, organizational, and behavioral. Despite this, many entrepreneurs in this industry toil for years raising tons of capital then go through a rigorous regulatory FDA process for approval only to find that the drug or their innovative medical device did not get approved. Many of them continue to persist. It is the sheer passion to help improve the lives of so many people affected by various diseases and relieve them of their agony is what keeps them going.
This article presents the wisdom from an amazingly successful entrepreneur from pharmaceutical industry. Dr. Sarvajna Dwivedi co-founded Pearl Therapeutics, Inc. with over 21 years of experience in various therapeutic classes, dosage forms, and devices from discovery to commercialization, to develop differentiated inhaled combinations for globally prevalent respiratory illnesses. Pearl raised $167.5M in venture financing and progressed a dual drug combination into Phase III clinical testing in less than six years. AstraZeneca acquired Pearl for $1.15B in June 2013. Here are his four key take away (4KTA) points based on my discussions with him recently.
1. Clear Focus on Value:
Never lose sight of the value of your product, service or plan. It\'s the mission you stay focused on. For us, the mission was to help millions of patients breathe better than current products. The value of improving patient\'s health even during the difficult times in our company kept us focused on our mission. The lead product was a combination of two drugs that enables patients to open up airways to help breathe better. Against the prevailing wisdom of making once daily products, we chose to make twice daily drug combination because patients feel worst in the morning and in the evening. The major pharmaceutical companies were trying to develop once daily drug to improve compliance, so patients don\'t miss the dose a day. We focused, instead, on medical value inherent in relieving symptoms, rather than forcing patients to comply with dosing regimens. It was this clarity that led to some excellent clinical studies and support of major investors including positive feedback from expert physicians in this therapeutic area. With AstraZeneca, our company is poised to build a whole pipeline that mirrors patient symptoms. A clear focus on medical value creation at Pearl lead to a huge success for our investors.
2. Build A Strong Team Early On:
My cofounder and I clearly knew our strengths and weaknesses. We complemented our weaknesses by hiring experts with deepest knowledge and experience. Pearl\'s leadership team was formed early to create a strong pharmaceutical company in small construct. Our execution was flawless, completely on target, and on budget at every step. As a result, we were able to raise huge financings despite the tough economy, and continued to build escalating value for the patients and for shareholders with each annual plan. We rewarded our team commensurate with industry standards while providing them opportunity to work on an exciting range of products. This resulted in retaining them despite a number of uncertainties. Knowing the health value you are providing and finding a team to execute on it is ultimately critical to your success.
3. Daily Sense of Urgency:
We equated time with money. When you raise venture money, it is depleted on a daily basis with no product revenue stream compensating for it. In pharmaceutical business, timelines are long, and capital required is huge, with stringent regulatory requirements. It is easy to lose sight when the company is especially so young, and investors seek results and positive outcomes on a recurrent basis. We decided to focus on a daily burn rate, and return on investment metrics. All of our employees were aware of the burn rate on a daily basis that helped instill a sense of urgency in all timeline planning and day to day execution. Even after the acquisition by AstraZeneca, that sense of urgency is still the hallmark of our team, and the products are poised to reach patients in one of the fastest progress of pipelines in respiratory business. As it is apparent, the focus on daily burn results in creating a daily sense of urgency, eventually leading to cumulatively building customer value and financial success.
4. Product Passion:
The journey of Pearl Therapeutics appears to be easy in retrospect. This was far from true. We ran into serious technical and economic challenges within twelve months of inception, both occurring at the same time. The core technology licensed by us was yielding unstable products. When we discovered this problem, approximately 1/3rd of the total money raised was already spent. We had every opportunity to curtail our operational focus, and even change the direction of the company, but we did not. We clearly believed in our mission. We were passionate about it. We felt strongly in bringing breathing relief to millions of patients and improving their lives globally with our first product. We could envision that elderly patients now could get out of the bed, play with their grandkids, and walk to their neighborhood stores. We solved the technical problem rather than giving up on it due to our innate passion in helping so many patients suffering from respiratory related problems. The new solution led to brand new intellectual property protecting the products for longer duration than licensed technology would have due to earlier expiration of their patent life. As we overcame this technical challenge, the economy took a nose dive in 2008-2009 periods. Now, with a brand new technology and promise of new product, we were still able to raise next huge round of financing - the largest pharmaceutical financing round for a private company in 2011 despite a shaky market. The bottom line is if it were not for team\'s innate passion, strong medical value and deep technical expertise, this would not be possible.
In summary, the four key take away points for any aspiring pharmaceutical entrepreneur is to focus on providing clear value, building a strong team early on, instilling a daily sense of urgency and having a true product passion.
Naveen Bisht is Co-Founder of Auriss Technologies, Inc, a serial entrepreneur and Board Member, Chair- Programs, Chair Content -TiEcon 2013 and TiEcon 2014, The Indus Entrepreneur(TiE), based in Silicon Valley, California. Follow Naveen on twitter @Naveen_4KTA