Building The Pipeline In Small Biotech: Managing Risk And Reward

Posted December 3rd, 2015 by Ankit Mahadevia, in Business Development, Drug discovery, From The Trenches

This blog was written by Ankit Mahadevia, CEO at Spero Therapeutics, as part of the “From the Trenches” feature of LifeSciVC.

In my experience, looking to the outside world for new pipeline ideas isn’t just the realm of larger companies.   The data (and common sense!) suggests that most good ideas originate outside of one’s walls whether your group is 10,000 people or 10 people; accessing interesting programs that complement your thesis can be a recipe for growth and management of ever-present scientific risk in the pipeline.

The stakes at an emerging company for making new program bets are big: each successful bet could transform the company, and a poor choice (if not killed quickly) will shorten your cash runway and distract your team.  We’ve learned some valuable lessons along the way in this high stakes endeavor.

Alignment on goals: Alignment and commitment from your Board is crucial for a successful external discovery effort.  Timing is everything – based on a company’s capitalization and needs of existing programs, it may not be the right time to bring on a new program.  If it is the right time, this philosophical alignment is good, but specific alignment is even better – down to what budget’s available, what are the parameters of an ideal program, and what are the go/no go points within a company’s risk and budget tolerance. I have seen more than one management team grind to bring a deal to the table without getting specific alignment first; a major mismatch between the team’s wish list and Board’s expectations wasted a lot of time that could have been invested in execution. 

Network over Process:  A systematic search process across institutions is important once you have your “wish list” in mind.   That said, great scientists know a good program when they see one and it pays to be open to reprioritizing your list based on the collective intuition of your scientific network.  For example, at Spero, our model has been to apply a platform of experience and breadth of capability to a broad range of novel therapeutic ideas in infections disease. We’ve been able identify programs for our pipeline in locales from Finland to Montana largely through the relationships our R & D team and advisors have built over long careers.  The “referral” route has several benefits.  There’s an intrinsic quality advantage to programs endorsed by a respected colleague; in addition, a warm introduction from a respected industry veteran sets the tone for an open dialogue relative to the “official” tech transfer or BD channels.

Speed and focus win the day: Across several collaborations we have been a part of across several companies, we have had to compete for programs with others.   In some specific instances, getting to the table fast, and first with a proposal has helped us stay ahead of the pack.  Investigators with a great idea and limited funds don’t want to wait to advance their ideas. Speed shows commitment and is an audition for the urgency with which you will take on the project.

In a smaller company, there is no room for low priority initiatives.  Emphasizing our requirement of focus and priority has been an advantage in our discussions as well – it builds tremendous trust and goodwill for a partner to know that your success depends in large part on the success of their program.

Investing in pipeline expansion is a high risk, high reward enterprise within a small biotech.  In my opinion, however, one needs to play to win.  A concerted, efficient effort to build one’s pipeline can pay huge dividends in the long run.

Ankit Mahadevia

Serial biotech entrepreneur and executive
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