Metro Atlanta lacks a critical mass of entrepreneurs with dual expertise in business and science to lead fledgling biotech companies, according to industry experts and insiders. Without this leadership, biotech startups racing to get their products to market face greater hurdles, they said.
Acquiring capital and gaining FDA approval are two frequently cited obstacles clogging the path of local biotech firms as they try to commercialize their innovations.
But what is not often mentioned is that the right person at the top of the company can often overcome such impediments, experts said. CEOs who have successful track records in bioscience and business often have the personal credibility to attract investors, as these small firms attempt to take their product to market, said Nina Sawczuk, director of the Georgia Tech/Emory Coulter Foundational Research Program.
“If you have the right person, they’ll bring capital, they’ll attract talent — it’s 100 percent [them],” said Sawczuk. “It’s not going to go anywhere without that person. And when you get that right person, it’s going to be really interesting.”
A lack of this leadership talent in Atlanta, compared to other biotech hubs like Boston and Silicon Valley, is holding the industry back here, experts said.
The stakes are high, as many areas compete for these type of jobs, which has been a priority for Georgia’s political and business leaders. As of 2010, Georgia had 18,025 jobs at life sciences companies — those involved in biotech, medical devices, pharmaceuticals and diagnostics, according to Georgia Bio’s 2012 Shaping Infinity report.
The industry’s future growth depends largely on leadership, said Mike Cassidy, president of the Georgia Research Alliance, a non-profit organization that receives state funding to invest in university research opportunities. Atlanta has the scientists and engineers with new ideas to match top biotech clusters elsewhere, but it’s missing the leadership talent necessary to complete the biotech ecosystem.
A CEO with a dual background in business and science can understand the finances, regulatory guidelines, market, customers and competition, in addition to the technology, experts said. Since a CEO is responsible for developing an overall vision and strategy, it is harder for him or her to do that in the complex biotech industry without a knowledge-base in both arenas.
“We need to build a little bit more of a cadre of fundable business management that’s specifically in the bioscience space,” said Cassidy. “We think our universities are developing outstanding technologies — we’d like to see more of that commercialized.”
The Georgia Research Alliance has helped match some of these scientists with experienced entrepreneurs in order to move their ideas and technologies to market.
Tom O’Brien, CEO of Axion Biosystems, moved to Atlanta in 2007 after selling a large healthcare equipment company. After close to 20 years heading mergers and acquisitions within companies, O’Brien was hoping to do something different. He was introduced to Axion Biosystems through the GRA and decided to start a company with Jim Ross, the primary technical founder.
O’Brien studied industrial engineering at Georgia Tech, but was more interested in business when he graduated. He went on to pursue an MBA from the University of Chicago. O’Brien said the degrees have given him a unique background, helping him to understand Axion’s technology — a system that can model brainwaves and heartbeats so that drug companies can test their products without using animals.
“The combination has been helpful to me,” O’Brien said. “It’s given me opportunities that I wouldn’t necessarily have had without both degrees.”
While O’Brien has the training and experience in both business and engineering, he does not believe it is indispensable to have one CEO at the top with both business and science expertise. It’s not just one person, he said, but a team that leads the company to success.
“I think it’s nice to have a pairing—someone who’s interested in one side, the science, and someone who’s interested in the business and technology side,” O’Brien said.
Others, however, believe a small company could struggle if a critical member of that team with specific expertise decided to leave. Having the right CEO, with knowledge in business and science, could mitigate the damage.
At Axion, O’Brien said the technical founders had a passion for the science. His role was to come up with a product development strategy — take their technology and narrow it down to something that customers would buy.
Currently, Axion has one product on the market — its modeling system to help pharmaceutical researchers test drugs. The company is working on getting two more products to the market soon and anticipates being cash flow positive in the next 18 months.
Developing a biotechnology is a long, rough road. It can take years to build a product, conduct necessary clinical trials and acquire FDA approval. Companies are often starved for capital and often rely on multiple investors to stay afloat. With so much uncertainty, these investors are looking at the potential for a company before they decide to write a check. The potential is largely based on the experience of the CEO.
“It’s been very hard to translate biomedical stuff to the market,” said Ravi Bellamkonda, associate vice president for research at Georgia Tech. “I truly believe a good CEO can make or break a technology — a biotechnology.”
Brad Kairdolf, president of DiagNano, took an unconventional path into biotech. DiagNano is a local biotech startup company making products that allow doctors to obtain measurements of various disease indicators and develop a “fingerprint” of the disease for the patient, so a better treatment plan can be devised.
The company was born out of the TI:GER program (Technological Innovation: Generating Economic Results) at Georgia Tech. While working on his Ph.D. in biomedical engineering, Kairdolf was paired with MBA and law students through the program to develop a product or technology out of his research.
The TI:GER program is a certificate degree program with formal course work in addition to case work. Kairdolf said that, as a scientist, it helped him learn about various aspects of commercialization, such as identifying the customer of a technology or product. Those on the law and business side, he said, were able to learn about how to communicate with people doing the research and development.
“Basically, everybody that has tangential experience with the program has a very positive opinion of it,” Kairdolf said. “I think it’s something that’s needed more of.”
Local business schools, such as Emory’s Goizueta and Georgia State’s Robinson College, do not have programs that train individuals in both business and bioscience like Kairdolf was.
By contrast, other cities are coping with the shortage of managerial talent in biotech by offering specific training programs at business schools. Both the University of Pennsylvania’s Wharton School and Johns Hopkins’ Carey Business School offer dual MBA and master’s in biotechnology degrees.
Some in the industry said more programs are needed to cultivate a greater community of biotech entrepreneurs, who are in demand nearly everywhere.
Still, Bellamkonda said that there is no substitute for real world experience.
With many health, science, and technology centers in Atlanta, scientists with new technologies are abundant. But many of these scientists, like Jelena Vukasinovic, president of Lena Biosciences, may not be armed with prior business experience when entering the biotech industry.
“I’m the researcher who had to learn and grasp the business really, really fast,” Vukasinovic said. “You are faced with many challenges (in starting a biotech company). On one hand, it’s a merger between science and engineering. On the other hand, how do you form and center a business around it?”
Lena Biosciences is in the process of launching its first product, which allows drugs to be tested in a three-dimensional cell culture that mimics the conditions of the body. Vukasinovic holds a master’s degree in mechanical engineering and developed the technology for her company while at Georgia Tech in 2008. Although Vukasinovic does not have a background in business, she has found other means to cope with the challenges of starting a biotech company.
Primarily, she has relied on the business advice of Tom Stribling, a healthcare entrepreneur. She was introduced to him through the GRA ,and he now serves as a board member for Lena Biosciences.
While an adviser helped guide Vukasinovic on key points, many believe it’s more efficient to have one CEO who can articulate what the technology does, as well as grasp the finances and regulations.
In top biotech clusters, executives from successful companies come back and help lead new startups like Lena Biosciences, according to Greg Dane, industry fellow for the GRA. This creates a self-perpetuating system and provides startups with access to experienced entrepreneurs.
“What we need to match up with (research) is simply a larger group of capable individuals to take these innovations forward,” Dane said. “From a governmental point of view, if we can attract larger companies into the space, that can be the trigger for some executives to become available.”
Recently, the large medical device company, Baxter, came to town, bringing with it 1,500 jobs and a $1 billion manufacturing investment. Activity such as this has caught the attention of the bioscience industry, said David Hartnett, vice president of Bioscience and Health IT industry development at the Metro Atlanta Chamber. He believes this news will draw more biotech executives to the area.
But Atlanta is not alone in the struggle to find executives with the unique skill set necessary to lead biotech companies, according to Carol Henderson, director of the Health Science and Technology Office at the Georgia Department of Economic Development.
“This is really a national trend,” Henderson said. “We’ve got several CEOs that have come and spun out companies. I think that we can do it, but I think that it’s a matter of keeping these people here.”
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