The biotech industry thrives on collaborations and partnerships. The commercial viability of a biotechnology company most often rests on the value of the innovative products and technology platforms it develops and their desirability to other organisations. This symbiotic existence has made partnerships, licensing deals and acquisitions a source of considerable value for emerging companies seeking to advance their science and offer new therapies.
Overwhelmingly, venture capital is the primary form of capital that drives most of the sector’s early-stage companies. However, these investors have time horizons and funding constraints, and so transactions that inject non-dilutive capital, or better still, provide an exit, are often desirable. Despite CEOs being charged with raising finance for the company, the support of other executives can be vital in delivering on this objective, which commonly falls to the Chief Business Officer.
In this article, we explore five key features of the Chief Business Officer role and how they must develop relationships with stakeholders and some of the prominent competencies that are requisite to success. We are mainly profiling the capabilities of sell-side CBOs, who are selling into larger companies, although many of these competencies transfer equally well to the buy-side environment.
It is essential to understand just how vital the Chief Business Officer has become and why. At the heart of this is the reliance of larger pharmaceutical companies on innovative start-ups to plug the innovation gap they see in their R&D efforts. According to the consulting firm, McKinsey, in 2020, the 20 biopharmaceutical companies with the largest R&D budgets had externally sourced no less than 45 percent of the drugs in their pipelines. In 2021, across the entire industry, two-thirds of the industry’s pipeline revenues were generated from externally sourced drugs. Thereby, defining the transaction trend in this open innovation era of biotech.
While such transactions provide a capital flow into biotech, it is not the sole reason for seeking deals with larger companies. Small biotech companies benefit from the considerable drug development, manufacturing and regulatory expertise of larger companies. Conducting large-scale global clinical studies is also a competency that can be difficult to acquire in biotech, despite many high-quality clinical research organisations being able to support them. Clinical studies are expensive, and setbacks or delays can be crippling for smaller companies with limited capital.
Here are some key responsibilities and areas of focus for a Chief Business Officer in biotech:
The CBO is often responsible for identifying and evaluating new business opportunities, including partnerships, collaborations, licensing agreements, and acquisitions. They engage in negotiations and due diligence processes, including contract development and negotiations, to secure strategic partnerships that will further the company’s technology assets, or possibly expand the company’s product portfolio with in-licensing or technology acquisitions.
- Strategic Networking and Relationship Management
- Interpersonal Skills (inc. ability to influence)
- Research and Development
- Board and External Advisors
The CBO plays a central role in developing and refining the company’s strategic direction. They analyse market trends, competitive landscapes, and payer and regulatory environments to guide decision-making and ensure alignment with the company’s goals and objectives. Leveraging the value of the company’s technology requires a clear understanding of the market environment and what is driving buying decisions.
- Strategic and Critical Thinking
- Commercially Awareness
- Risk Management
- Executive Leadership Team
- BD counterparties
The CBO often works closely with the CFO and CEO to manage relationships with investors and stakeholders, sometimes spearheading the drive for new funding when the CEO is perhaps less experienced or has experience in other disciplines (e.g. research). They participate in fundraising activities, such as securing venture capital or engaging in investor roadshows building towards initial public offerings (IPOs), and provide updates on the company’s financial performance and growth prospects.
- Resilience and Perseverance
- Venture Capital Investors
- External Advisors
Intellectual Property Management:
Biotech companies heavily rely on intellectual property, such as patents and proprietary technologies. The CBO collaborates with legal and scientific teams to protect and manage the company’s intellectual property assets, ensuring they are properly utilised and enforced.
- Innovation Management
- Problem Solving
- Research (Management /Function)
- Legal (internal/external)
- Universities and Tech-transfer offices
The CBO can serve as a bridge between different departments within the organisation, fostering collaboration between research and development, operations, regulatory affairs, legal, finance, and commercial teams. This collaborative approach ensures that business strategies are effectively implemented across the company.
- Teamwork and Collaboration
- Organisational Awareness
- Research and Development
- Executive Leadership Team
- Board of Directors
Every CBO role has its priorities and challenges, and will, therefore, require prioritising certain competencies that can be drawn from a more expansive set. The overview provided in this article highlights many of the competencies frequently demanded by such roles, however, we have forty-nine competencies in our CBO framework that are used to design CBO assessments.
Overall, the Chief Business Officer in biotech combines business acumen with scientific knowledge to drive the commercial success of the company. They are responsible for developing and executing strategies to maximise value, revenue, secure partnerships, and position the company for long-term growth and profitability.
Liftstream is an executive search and leadership advisory company serving companies across the global life sciences industry.