Almost every biotech has a Scientific Advisory Board, but few use them particularly well. Although SABs can be hugely valuable in helping shape a program or portfolio, or raising the visibility of a startup, they can also be a colossal distraction and huge time sink, burning resources and creating post-meeting firedrills.
To help the startup entrepreneur think through their SAB, I’ve polled a few of our portfolio exec’s* about what works, and combined it with my own experiences. This post is the synthesis of that – highlighting the Pros, Cons, and Best Practices for early stage biotech SABs.
Pros – Reasons for having an SAB
- Good SABs can provide a young biotech with objective, external perspective and quality authentication. This can involve constructive criticism and helpful problem-solving, and typically helps provide an “open market” view of where the biotech should focus going forward.
- They can raise the profile and awareness of a startup with thought leaders in the scientific community. For raw startups, this is sometimes just “window-dressing” for a story, especially with “Hollywood-star” SAB members, but a great lineup can provide a meaningful stamp of approval to the external world, including current or potential investors.
- Quality SABs can involve real data-sharing with collaborators, and provide a conduit for exchange of cutting-edge ideas. They can also be a good forum for sharing public, non-confidential information about competitive programs and how one’s efforts stack up relative to others
- They can be fun meetings – appropriately crafted agenda’s leave time for far-reaching scientific questions, more than just the next 3-6-9 months of work.
Cons – The real costs of a poorly used SAB
- SABs don’t come for free. Good ones are a lot of work. And they are also costly for a startup in terms of dollars and equity. A typical SAB member may charge $2.5-5K per day and receive 0.1-0.3% equity. Hollywood-star advisors can be much, much more expensive than that on the equity front.
- SABs, especially larger ones, have a high degree of entropy pent up in them. Lots of potential opinions can lead to a herding of cats during the meeting. Furthermore, a strong negative point of view from an influential SAB member can derail programs, especially with investors or Directors listening in.
- Pet projects of SAB can create challenges. If your SAB is composed of collaborators, where sponsored research may be a part of the relationship, it can become very difficult to kill “pet” projects affiliated with that SAB member. This can lead to unpleasant meeting dynamics.
- Promiscuous SAB members may be too involved in other roles to be focused and constructive, and often aren’t as tight-lipped about confidential information as one would hope.
All in all, the Pros clearly outweigh the Cons for most companies. But enlisting the help of an SAB isn’t simple and requires a good deal of forethought about the why, what, and how of putting them together.
Best Practices for a Productive SAB.
Here are a few areas where our experience suggests some general guidelines.
- Why does your biotech need an SAB?
- It’s important to define the reason you want to have an SAB and build it for that purpose. This obviously changes over time from pre-funding days to drug discovery to clinical development, and its important that your SAB mature along with the company. Is the SAB primarily for external validation (raw startup), or is it for specific guidance on a portfolio or project (maturing into development)? Is it something where discussion in a broader group is going to be helpful to getting to the right answer (big science questions), or can you do it via one-on-one dialogues (programmatic input)? In my experience and that of many of our portfolio executives, much of the value from an SAB comes during the informal, regular contacts in ad hoc discussions, not during the SAB meeting itself.
- What should your SAB look like?
- In general, its good advice to keep it small. I think 3-5 core members are best, and for each SAB meeting invite ad hoc members with particular expertise to bear on the questions being asked. To keep it fresh, I’d advocate 1-2 year renewable “terms of service” of your core members, so you can sign them up again if they are adding value.
- Avoid the “Hollywood SAB” of Nobel Prize-winning scientists who haven’t done much in years or don’t have the time to engage thoughtfully. They look good on paper, but often don’t add much with regard to shaping the story, but certainly do add on the costs. They may help attract investors, but unless the Advisor is fully up to speed on your work it could also dampen interest upon deeper diligence: having a disconnected “Hollywood SAB-member-in-name-only” can hurt rather than help. Nothing is worse than hearing a purported SAB member say during a diligence call “I haven’t heard from them in months” or “I haven’t actually reviewed the data”.
- Avoid members who consume too much oxygen in the room. Its more than just annoying when you have a blowhard who talks too much, often about subjects they actually don’t know anything about, and who doesn’t play well with others. We’ve all seen this happen.
- Try to mix up the backgrounds and experiences of the group. The best sessions I’ve attended tend to have a mix of cutting-edge academics and industry veterans, in order to bring orthogonal perspectives. Most startups default to a string of academics and miss out on the veteran drug hunter or development perspective. Have your Founders help with the selection, but not so much as to limit diversity of thought. Also, get out of the local bias – e.g., Boston startups should think about SAB members from other parts of the country if not abroad. With all of the career transitions out of Big Pharma lately, there are lots of talented folks available who are willing to advise.
- How to conduct an SAB meeting:
- It sounds obvious, but send the materials in advance. Most companies always say they will, and then they still pile on the slides a day or so beforehand. I’d suggest sending papers/pre-reading at least a week if not 3 weeks in advance. Importantly, the materials should include the key questions with which you want input from the SAB.
- Actively managing the meeting is a must. As mentioned above, these are tests of your ability to herd cats. Managing the time and cadence of the dialogue, pulling out of the inevitable rabbit holes in the dialogue, and getting the right balance of presentation and discussion is key.
- Require your SAB to work for their compensation. They shouldn’t just plan on sitting down, listening, and occasionally pontificaitng. Make them actively contribute by putting them on the agenda to give presentations or 10+ minute perspectives on an aspect of the field. Facilitate the gathering of specific feedback to the key questions during the meeting, and the sharing what your SAB sees out there in the market on the competitive front. Lastly, make them review the pre-read material by jumping right into their feedback on some aspect of that material. An engaged, up-to-speed SAB is critical to having a great dialogue.
- Include your team in the SAB! Nothing motivates and fires up the juices of the scientific team than seeing SAB luminaries and industry veterans debating the merits (or demerits) of their scientific programs. And its helpful to have folks with real data on the tips of their tongues in case the tough question gets asked.
SABs can be quite valuable to startup biotechs if constructed and conducted in a thoughtful manner. After the SAB, its important to follow-up with minutes and a set of management conclusions – why you did or did not accept the consensus view of the SAB, what changes were implemented, etc… Maintaining frequent, open dialogue with an SAB via email or informal one-on-one’s is also helpful.
Beyond just these fledgling biotechs, bigger Pharma companies can benefit from having an external SAB aimed at bringing much-needed open market, objective input into the quality and robustness of internal programs. I’ve been serving on the UCB Pharma Research SAB for the past few years, and find that the quality of the meeting and dialogue is exceptionally good. Its certainly one of the most productive SABs I’ve witnessed (and they follow most of the Best Practices above), and I’d like to believe that UCB finds the external, objective input into their internal Research programs helpful.
Seems to me that more organizations, big and small, would benefit from having greater external “open market” objectivity injected into their portfolios through constructive SABs.
* Mike Gilman of Stromedix (Biogen), Tom Hughes of Zafgen, and Bill Marshall of Miragen, along with my Atlas colleagues, helped contribute ideas for this post.