Firstly, The Thing That Attracted Me: Presentation

Cellzome’s website is small, simple and a similar website would be inexpensive to develop (around £7K including content). Its simplicity and clarity is what makes it special. No heavy word-ridden content; just clear and simple messages:

• a small molecule drug discovery technology platform using chemoproteomics for epigenetic and signal transduction (kinase) drug targets
• developing proprietary projects in inflammation and oncology
• 2 proprietary technologies: episphere^TM, for screening epigenetics targets; and kinobeads^TM, for quantitative measurements of lead compounds on native kinases

Its science is presented in terms of the problems it solves, and the results it achieves, NOT by its features. Advantages are clearly explained and further information is easily available from publications and simple, elegant PDFs for downloading. Although this looks simple to achieve, it isn’t. Which is why so many similar companies, who could accomplish just as much, don’t. Without decent presentation like this, shareholders won’t get it, and neither will potential big pharma partners.

Secondly: Financing & Team

Cellzome is backed by a mix of private capital VCs (e.g. Invesco; Index Ventures; Atlas) and pharma venture (Accenture). Last year it attracted 2.3M Euro in TSB grant funding, bringing the total to over 5M Euro in grants since 2008.

The money has clearly flowed in as a result of a stellar line-up for the board and scientific advisors which includes Stelios Papadopoulos, founder of Exelixis; Prof Sir Philip Cohen, world leader in cell signal transduction and Royal Society Fellow; Prof Jeannie Lee, Howard Hughes Medical Insitute Investigator and Harvard Medical School Professor of Genetics and Dr Peter Machin global senior VP research chemistry at GSK, among others of equal calibre. The senior management team is also impressive, with a large smattering of successful biotech and established pharma experience. The sheer concentration of talent here is rare, and it goes to show how big names can attract decent levels of funding. It demonstrates just how fundamental a good team is, for everything that a company will achieve in its future.

Which Leads To: Positioning

With a good financing structure in place, Cellzome doesn’t appear to need a short-term revenue stream. A lesser-funded company would have to leverage the drug discovery screening capabilities of the Episphere^TM technology, for example, and charge it out on a project by project basis. This isn’t Cellzome’s strategy. A very wise move. The company is 100% focused on big pharma partnerships and the development of its own products for out-licensing. This appears to be paying off, with an impressive line-up of partnerships from GSK, Bayer, Novartis and J&J already under its belt.

Partners and Collaborators Bring Credibility

…and the cash to fund Cellzome’s proprietary programmes, which is where the really big money lies. I think Cellzome has the capability to achieve multi-million dollar licensing deals like the Abbott deal with Galapagos for its $1.35Bn JAK inhibitor. Cellzome looks a lot like Galapagos did in the early days; a handful of big pharma collaborations for access to a good technology platform, which paid for development of its own targets. The challenge with any drug discovery technology platform such as this though, is focus. There is a danger associated with developing too many projects, but Cellzome’s impressive team line-up should have the experience to cull the duds and focus on the winners, for the all important capital efficiency that shareholders are looking for these days.

I’m not affiliated with Cellzome in any capacity, so I can point to this company as one to watch with a clear conscience. The important issue is whether other technology platform companies can implement these points to put them in a similarly strong position for the future, too.

When you look at a problem like this, it’s tempting to respond by changing the tactics, refreshing the branding and content, and give the marketing campaigns a “reboot”. Try a webinar series, a workshop, a different sort of email campaign..and so on. The danger with this approach is that you miss the root causes of your market apathy, and you spend a lot of money finding out that tactics aren’t really the issue.

Time to Take a Step Back

At this stage, I would highly recommend taking the time out to really find out what’s working in your technology offering and the way it’s being delivered and what’s not, from your clients’ points of view. The benefits to this work are not just the detailed feedback, but it can also offer valuable insights into your competition, your pricing strategy and your customer service. An added bonus might be one or two useful testimonials, which you can use throughout your marketing materials. Then there’s the good impression you leave with your clients; that you’re willing to listen and understand their needs, and respond to them.

Aim of Client Feedback

Life science companies, for some reason, are typically bad at seeking and responding to market needs. If your company takes the time to listen and implement an action plan as a result of talking to your customers, it’s highly likely that this will put you ahead of your competition.

More importantly though, it will help you to focus in on the particular product or service that has the greatest chance of delivering serious revenue in this tough climate.

Things that you should expect from a properly executed client feedback Q&A, should therefore include:

• a set of key messages (in the clients’ own words) in terms of what your products help them to achieve, what problems they solve, and what results they deliver
• areas to fix in order to satisfy client requirements and stay ahead of the competition
• what makes you stand out (you might think you know what this is, but your clients might have other ideas)
• clear prioritisation of your product portfolio, in terms of competitive advantage and growth potential
• a list of effective tactics to engage with your clients effectively in the future

How To Go About This?

For starters, don’t leave this to your regular sales team to do. Don’t ask your account managers to call their clients, and don’t call them yourself.

Why?

Firstly: your clients know that your regular sales/account directors have a job to do, which chiefly involves getting the next contract. A feedback session can so easily turn into a sales conversation, and you miss the opportunity to delve deeper into how you might make your product/service portfolio better for the long term. Sales people always want to make the next deal, they can’t help it.

Secondly: people are polite. Ask a tricky question about where you might be failing and they might not want to offend you by returning the answer truthfully. You might not be ready to listen to it. You might be tempted to defend criticism. If you’ve been involved in the development of the product/service in question, you might want to hang on to it and ignore important warning signs that things need to change, or even, that the offering is no longer viable. You need to listen.

Get someone from outside of your organisation, who understands your business and can have an easy peer-level conversation with your clients to do this on your behalf (insert shameless plug for BioEngagement’s services here). This person can perform a telephone interview, using pre-agreed structure of questions, including open questions to invite fresh thinking and ideas, and present the results back in an unbiased fashion. Use these results to re-think your product/service portfolio; your priorities, how it’s delivered, its key features…and make the changes.

The Questions To Ask

You need specific responses to your questions in order to make the right action plan, so try and elicit these wherever possible. Set out assurances regarding confidentiality, so that the client is free to divulge more technical details, especially regarding deliverables, if required. It helps to choose clients who are forthcoming in the first place.

Marketing Tactics – how did they hear about you? When have they met you, prior to working with you? What other services do they know you for? What conferences do they rate highly?

Competitors – how do you stack up? What made them decide to work with you? What’s important in their decision-making?

Services – What service did they use from you? What did the service deliver? What did it enable? Did it meet expectations? What improvements could have been made?

Performance and service levels – how easy is it to do business with you? How consistent is your service? How responsive were you to problems/challenges, and how were these tackled? Would they come to you in the future? Would they recommend you to others?

Anything else? Have we missed something that’s important to you?

“You Told Us..Here’s What We’re Doing About It”…Follow Up

Once you’ve decided to make changes, based on your client feedback then go back to them to let them know, so you can demonstrate how their answers contributed towards your strategic decision-making. That way they know that this wasn’t just a sales pitch by the back door, and that you care about delivering a service that fits their needs. They might remember you next time they’re in need!

And if you need help to structure a customer feedback Q&A, get the answers and help you to formulate a winning marketing strategy, please get in touch.

In this excellent post, Michele Ollier artfully presents the reasons that early stage R&D companies must focus rather than diversify.

Any molecule early in development is not yet an asset, but it is already a “cash burner”. Michele Ollier, Index Ventures

If you look at the history of many early stage R&D companies, they often begin with a portfolio of projects/technology brought in by the founders. It makes the task of focus (i.e. ditching less viable projects) incredibly difficult because it involves real people who have strong affiliations and insecurities (what will happen to them if project X is killed?).

..the capital at risk is high before you even begin along the path to de-risk the asset and it means the team will focus on raising larger chunks of cash, covering multiple milestones on different assets.

It’s hard enough to raise capital currently, and with a large, diversified product portfolio it will be even harder, for these reasons.

Clearly, for a project to be worthy of continued focus and support, its scientific basis needs to be robust. The molecular target needs to be viable; the biomarker has to be clinically relevant, and so on. These are the factors that we tend to keep a close eye on and discuss on a frequent basis.

What is often missing, is the wider context: the commercial viability of the project. So that as time goes by, you have assembled a “portfolio” of projects, that aren’t all necessarily equal in terms of potential value. Some might always be cash burners, and it’s critical for the company’s survival and future valuation, that these are weeded out.

Does Your Product Portfolio Resemble a Cluttered Wardrobe?

Do any of these things ring a bell?

Are you holding onto a project for historical or sentimental reasons? Something you started out with, for good reasons at the time? But not so interesting now, given the current fashion (competitive environment)?

Do you have things in there that no longer fit with who you are now? Are they still interesting? Competitive? Commercially viable? Perhaps consider a spin-out, or out-license if possible, and use the funds to focus on your best molecule/technology.

Do you have stuff that has issues and needs fixing up? Missing functionality? Problematic, narrow therapeutic window? Potentially toxic metabolites? Not attractive enough to clinicians? Do similar molecules have a poor track record? Put these on ice…possibly forever.

Stuff that’s out of season? Do you have a project that addresses a difficult/inaccessible market, or would need other innovations to make it work? Is the regulatory environment conducive? If the answer is yes, or maybe to any of these, it will be hard to fund.

Base Decisions on Dispassionate Market Analysis

Ask the difficult questions regarding the commercial potential of each project, and base them on market research. Secondary market research, based on existing reports and internet searches can deliver a good grounding of understanding from a few days’ work and following on from that, a series of interviews/surveys with key opinion leaders will take a bit longer. Both are critical for making the right decisions regarding project prioritisation.

The Critical Questions

- Is your product/technology truly disruptive? If so, you might stand a chance of getting funded.
- Is there foreseeable and significant market growth for the next 7-15 years?
- Is the market(s) accessible or are there barriers to entry? Are these significant?
- Is the regulatory landscape conducive? What is needed here?
- Who/what are the competitive products that are marketed or nearing launch? What would your product have to look like in order to gain market share or become the next leader in the field? Are these attributes/functionality attainable in the time/budget you have available?
- Do clinicians agree that your technology/product would be desirable for patients? What kind of product would they ideally want on the market? Does your’s come near to this profile?
- Who would buy/license your product? What would prevent them from doing so?

Because of the rapid changes taking place in the regulatory area, competitive landscape, clinician experience, patient needs and healthcare provision/payers criteria, you need to keep reviewing the answers to these questions, and make the hard choices accordingly.

What if you don’t? What if you continue as you are, progressing multiple projects along on a limited financial basis? You know the answer to that.

This was a question posed in this week’s BioWales conference. A timely question, given the region’s recent announcement of a £100M fund for the life sciences. It’s a question that aspiring entrepreneurs need to know the answer to before they plunge in.

Out of 80 patents reviewed, 2 companies a year are spun out – Dominic Griffiths, Senior Life Science Director, Fusion IP, a university IP commercialisation company that turns research into business.

Things that are patented don’t necessarily make good investments. Much of this is down to the general risk-averse investment climate that we have currently; some of that is down to learning from mistakes of the past. Investors are looking elsewhere for higher returns such as the >100x seen from social media and information technology companies. Compare these to the aspirational 2-3x returns in life sciences, and you can see why this sector has lost favour. For deeper commentary and examples, see this excellent post by Life Sci VC.

According to Fusion IP, the ones that are worthy of spin-out have the following attributes, and this is obviously linked to the VC appetite that prevails currently:

• focus on disruptive innovation. The word “game-changing” is used, akin to the iPad, for example. Not many of those about.
• a compelling unmet need, as opposed to “me-too but better”. That rules out products with any significant competitive landscape, no matter what the advantages. Pretty tough….
• accessible market. Watch out if your novel discovery would necessitate a change of any sort of process in the NHS, for instance.
• a timeframe for return, ideally within 5 years. So you need to add sufficient value in this timeframe to enable the early investors to exit or make the call to re-invest. You’d need to be extremely lucky, and the underlying science would need to be extremely strong.
• a clear map of the development pathway with milestones for exit, that all investors align to. You know, those projects that all go to plan and adhere to initial hypotheses.

Given this sort of stringency, I’ll bet there will be a ton of excellent life science discoveries that languish until this climate changes. I hope that when the time comes, it won’t be too late to use them to make a difference to patients.

I was just reading a company’s PR materials and noticed a familiar pattern which I shall call The Inward Focus. It’s when a company becomes so engrossed in developing, validating and generally sweating over their technology/service that it becomes the primary focus of all activities, and shows up in a particularly obvious way in their external communications. This often goes hand-in-hand with Inwardly Focused Product Development which is driven solely by the ideas and beliefs of the people within the organisation. Now this may have worked admirably for Steve Jobs, but for the average (if there is such a thing) early-stage life science company, you can just as well run out and sound the death knell.

For those who aren’t quite familiar, let me explain: it might start with the press release which is entitled “XX Company Ltd (insert company name) Announces New Analytical Service”. The next paragraph begins, “XX Company Ltd today announces the launch of its new (insert suitable adjective) service/technology to add to its growing portfolio of (insert relevant industry sector) supporting services.”

No mention of the problem it solves, or who it’s meant to help, or how this is different to current methodology. And yes, this should be in the first sentence and in the heading.

Don’t get me wrong; if you’re Apple, you can announce your new iBling technology and your loyal followers will practically do the rest. You create the innovation that customers don’t even know they desire yet (was I the only one who just couldn’t see the point of the iPad?). But for a life science tech/service, your pharma/biotech customers simply don’t have the money/time/ability to take risks and are too “innovation-weary” to just pick up the phone and call.

Life Science Product Development – It Needs An Outward Focus

A more damaging aspect of The Inward Focus though, is when it’s applied to a company’s product development strategy. This heads the company towards expensive mistakes. Tinkering with new products and services is not cheap (the average eppendorf tube of your target protein being the equivalent of 1 iPad unit). Without an Outward Focus, including not just discussions with clients, but competitive analysis and an evaluation of the potential market size before making the decision to invest in development, a start-up can quite easily speed off a cliff.

It doesn’t have to be difficult, but it does take concerted effort, and the results have to be taken into consideration by decision-makers in the organisation. One company I know did a rather obvious thing recently, and asked a client what they were doing with the analysis data that they had delivered to them. The client’s answer provided the basis for a unique new service which is now delivering high-margin repeat business in a highly attractive growth market.

At a clinical development CRO, Pharmaceutical Profiles (now part of Quotient), many pharma clients told us that rather than being drawn by the company’s clever remote-controlled oral formulation imaging technology, they were more interested in the company’s upstairs/downstairs approach to formulation development/batch production and Phase I clinic. The proximity of formulation lab and manufacture to the clinic meant that they could adjust formulation dose levels or switch to a different formulation “on the fly”, as results directed, during the course of a single clinical trial. This level of adaptability and flexibility practically guaranteed the delivery of valuable pharmacokinetic data for every clinical trail that had been designed with an adaptive element. As a result, this CRO could offer an attractive option for any early stage clinical trial (an otherwise highly competitive business), instead of relying on niche, problem-solving oral formulation issues in clinical development which had hitherto been their bread and butter. The company went on to develop this as a differentiating service and it has become an important revenue stream.

I’ve seen a similar outcome of The Outward Focus at ADME provider, Cyprotex. In their early days, we held customer feedback forums and talked to key accounts about what they needed and wanted in terms of ADME assay provision. These shaped the company’s priorities for new assay development, and identified important protocol features that needed to be included. Our own ideas for new PK prediction services and in retrospect rather academic in vitro assays, were pushed to the bottom of the pile. This customer-focused approach helped them to become a world leader in ADME/tox outsource provision. We also ended up writing “All You Needed to Know About ADME But Were Afraid To Ask”, because customers told us that they wanted education materials about how to interpret the data. It remains a valuable marketing asset for the company 6 years later.

There are of course exceptions to these rules. Last week I saw an announcement by Oxford Nanopore that they can sequence DNA using no more than a Gilson and a USB stick. I’d be surprised if any client had provided the inspiration to do this; it just seems that this sort of invention could change the world of medicine, diagnostics, forensics, and basic research the world over, but time will tell. I have no doubt though, that it’ll be the markets that identify spectacular applications of this amazing innovation, as the app developers are doing for the iPad.

In any event, I think it needs to be a written rule in stone, that any early life science start-up should look outside their window every day for that spark of inspiration, and to make all of their external communications relevant to an industry that certainly needs their help.

I just received a call from “M”, my totally competent and wonderful household helper.  The call went like this:

“Hi Karen, I just thought I’d call you because I’ve had a cancellation this week, so I’ve got a slot available.  I know you said you wanted more help with the ironing this week.  Do you want me to come round, as well as your usual slot?”

She’d remembered that I had visitors coming and filled in her vacant slot with an existing customer.  Simple.

It got me thinking about the situation I see in life science technology and service businesses who are launching new products and services.  How many times have I seen them include a way to introduce these new offerings to their existing clients, as part of their launch strategy (if they even have one, but that’s another topic)?

Take a new application for a bioanalysis service, or a new reagent for antibody research, or even a new clinical research service that offers a quicker/faster solution for Phase I testing?  The emphasis for these new product and service launches always seems to be on how to attract new business via marketing tactics: direct email announcements, a webinar, a press release and trade journal articles, etc.

Nothing wrong with that, but these activities tend to overlook the obvious “low-hanging fruit”: your existing customers. Out of the top 35 pharmaceutical companies and top 200 biotechnology companies, a certain percentage of these will be working with you already; perhaps on an ongoing project, or planning the next contract, or perhaps they’ve recently completed a project with you.  Are you expecting them to just find out about your new product or service, via your marketing efforts?

How about, as part of your marketing planning for the new service/product roll-out, you prioritise a simple phone call to your key project manager or important decision maker in all of your current, imminent and recent clients, to just let them know about this new offering?  A call from your account manager, business director or even better, your project manager, would be a personal way to introduce the new offering in terms that are relevant and specific to each individual client.  It only takes a few minutes, but being an existing client, you don’t need to overcome the hurdles of winning their trust or embarking on a lengthy contract process, as you’ve already done this.  Plus, it’s a great excuse to just keep the communication channels open.

So, why not include your existing clients in your new product/service launch plan?