Strategy First, Execution Second: Why Life Science Entrepreneurs Should Adopt a Top-Down Mindset Early

Authors

  • Echoe Bouta Outcome Capital
  • Oded Ben-Joseph Outcome Capital

DOI:

https://doi.org/10.5912/jcb848

Keywords:

M&A, IPO, Finance, Sector

Abstract

Despite the dedication of the management team and board to a company’s success, an often  overlooked component is the dynamics of the segment in which the company operates. In an effort to demonstrate the importance of the external view and how segment dynamics are likely to significantly impact the reality of companies, we analyzed recent data in the three-year period between 2015 and 2017 pertaining to financing events, M&A transactions and initial public offerings (IPO) in three separate sectors: therapeutic devices, oncology therapeutics and antibiotics. The analysis presented will provide management with a good estimation as to the required capital to achieve value-add milestones as well as the anticipated return on investment. These examples demonstrate the fundamentally different dynamics of three sectors, which will impact the most probable path to liquidity of companies in those sectors. Therapeutic devices have to often get regulatory approval prior to an exit where exits happen earlier in clinical development for the oncology therapeutics sector. Despite the high unmet need, there have been limited exits in the antibiotics sector. In all cases, return on investment is greater when the company’s exit included being acquired versus an IPO. This data demonstrates that exit opportunities are largely sector-dependent and suggests substituting external formal thinking, market-driven evaluation and analysis for inward-looking and biased judgment will being beneficial crafting a mature business case as well increasing the probability of success.

Author Biographies

Echoe Bouta, Outcome Capital

Senior Analyst

Dr. Echoe Bouta joined Outcome Capital in October 2017 as a Senior Analyst. Echoe completed her PhD at the University of Rochester in biomedical engineering, followed by a Research Fellow position at Massachusetts General Hospital and Harvard Medical School. Her research focused on understanding the role of the lymphatic system in multiple disease states, and determining the therapeutic potential of targeting lymphatics. She has authored numerous peer-reviewed publications, and received multiple fellowships in support of her prior research. While at Mass General, she served as Vice Chair of the Mass General Post-doc Association, and Chair of the Industry Career Exposure Club, organizations which she continues to support as an alumni.

 

Oded Ben-Joseph, Outcome Capital

Managing Director 

Dr. Ben-Joseph is Managing Director with Outcome Capital, and co-lead of its life sciences and healthcare practice. He brings a unique combination of executive, entrepreneurial, scientific and transactional experience to Outcome Capital and is passionate about assisting cutting-edge life sciences companies in enhancing their strategic value and developing a path to successful liquidity.

Dr. Ben-Joseph also serves on the Board of Directors for life sciences companies: XableCath, a clinical stage medical device innovator developing cost-effective treatment options for peripheral and cardiovascular disease and KidneyCure, a regenerative medicine company developing novel cell-based  therapies for the treatment of chronic renal disease.   Before joining Outcome Capital, Dr. Ben-Joseph was Managing Director at Boston Equity Advisors, a boutique investment banking firm focusing on private equity and merger and acquisition in the therapeutic medical technology sector.  Prior to that, Dr. Ben-Joseph was an Executive-in-Residence at Oxford Bioscience Partners, a life sciences venture capital firm, and CEO and co-founder of Caliber Therapeutics, a company engaged in the development of catheter-based drug delivery products for the intervention of atherosclerotic diseases. His past managerial and entrepreneurial positions also include President and CEO at Deep Vein Medical, an early stage medtech company dedicated to treating deep venous reflux in patients suffering from chronic venous insufficiency, President and CEO of X-Cell Medical, a clinical stage drug/device convergence company engaged in the development of novel stent-based anti-restenotic drugs, President of Ester Neurosciences, a clinical stage biotech company engaged in the development of novel compounds for the treatment of neurological diseases, and co-founder and CEO of Biolight Phototherapy, a company engaged in the development of laser-based medical devices for the treatment of dermatological disorders and allergies.

His academic appointments include Assistant Professor at the Departments of Radiology and Neuroscience at the University of Michigan, a Visiting Associate Professor at Tokushima University in Japan and a Visiting Scientist at Parke-Davis (Pfizer). Dr. Ben-Joseph has published numerous peer-review scientific papers as well as industry publications and has received numerous awards and scholarships.

Dr. Ben-Joseph graduated with Honors from Imperial College of Science, Technology and Medicine and received his Ph.D. from the University of Cambridge. He completed his post-doctoral training at the University of Michigan and received an MBA magna cum laude from the University of Bradford. He is a FINRA Registered Securities Representative holding  Series 7, 63 and 79 and a Registered Securities Principal holding a Series 24.

References

Ben-Joseph, O. “Where the Bodies Lie.” Nat Biotechnol. 2016 Sep; 34(9):909-11

Ben-Joseph, O. “How Cognitive Bias Undermine Value Creation in Life Science M&A.” In Vivo, 2017.

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Makower J et al. “FDA Impact on U.S. Medical Technology Innovation: A Survey of Over 200 Medical Technology Companies.” 2010, http://www.medtecheurope.org/sites/default/files/resource_items/files/01112010_FDA%20impact%20on%20US%20medical%20technology%20innovation_Backgrounder.pdf

Published

2018-08-27

Issue

Section

Articles