Virologist John Alderete made a flying start when he co-founded the biotech start-up Xenotope Diagnostics in 2001. Within 18 months, he and chief executive Paul Castella had raised US$1.2 million, developed a test for a sexually transmitted disease and had it approved by the US Food and Drug Administration (FDA). But this high-speed approach left the company, based in San Antonio, Texas, teetering on the cusp of financial disaster — it wasn't easy to navigate the regulatory, funding and clinical-trial hurdles to an ultimately successful licensing agreement with Genzyme Diagnostics. "The start-up world is not for the faint of heart," says Alderete.
Needless to say, choosing a job with a new biotech company is nearly as risky as starting one up. Industry leaders recommend basing your choice of employer on the same criteria used by venture capitalists to decide whether they will fund a start-up.
The hard truth is that great science doesn't necessarily meet the bottom line. "How much risk is somebody willing to take?" asks Michael Steinmetz, a partner in the life-science investment firm MPM Capital of Cambridge, Massachusetts. Only about a third of companies make it, meaning that they are sold for profit or bring big returns to investors, he says.
In addition to taking a healthy dose of risk, scientists seeking employment in industry give up both intellectual freedom and bench-side competition in return for higher wages and collaboration. "Business is about team success, not personal success," says Caitlyn Waller of BayBio, a San Francisco-based bioscience industry organization.
For this reason, biotech leaders recommend that prospective employees assess their personality before making the leap from academia. "If you want to do cool research and be able to play, don't go into the biotech industry," says Carl Johan Sundberg, investment manager at the Karolinska Investment Fund in Stockholm, Sweden. Investor Steven Burrill, chief executive of San Francisco's Burrill and Company, agrees that prospective employees tend to forget that industry is about making money. "We finance businesses, not science projects," he says.
But an industry career no longer means having to relinquish one's scientific standing. Adeela Kamal, a researcher at Conforma Therapeutics in San Diego, California, doesn't feel that her scientific status has been compromised by her industry work. In fact, her high-profile work in novel cancer therapeutics has garnered invitations to speak at top conferences and write review articles.
Few industrial scientists spend their whole career with one company, so prospective employees should realize they are exchanging security for short-term experience. "It doesn't mean you shouldn't take a risk, just understand the risk you are taking," says Scott Morrison, US director of life sciences at financial analysts Ernst & Young in San Francisco.
Do Your Homework
Business leaders agree on the top three points to evaluate when considering a job at a start-up: the management team's experience, the amount of venture-capital funding and, of course, the science.
Understanding risk: (clockwise from top left) Magnus Persson, Jesper Zeuthen, Steven Burrill and Katherine Moortgat recommend gaining practical experience before entering the world of start-up companies.
"You must give due diligence to the people and science behind the company," says Otello Stampacchia, managing partner at Biotechnology Private Equity Advisors in Geneva, Switzerland. Look for an experienced management team — serial entrepreneurs with multiple successes under their belt, or those participating in regional industry organizations. Find out about less-well-known entrepreneurs' science by searching PubMed.
In addition, learn what companies the top venture capitalists are funding, and why. Waller suggests looking for patterns in local and national venture conferences. "The strong companies are picked to present at conferences," she says. "Use it as a pre-screening process."
Choosing a position involves making an informed financial decision. Don't be afraid to ask to see the company's financial status in an interview. If the company doesn't have solid funding for at least two to three years, you may want to reconsider.
Alternative Routes
Remember that research isn't the only avenue for a science career. Employers need scientists in many other areas, including regulatory affairs, intellectual property and clinical design. Although you may need to broaden your scope of knowledge for many of these positions, any business background will be a boon.
"Practical experience is what is called for, not adding 'MBA' to your title," says Jesper Zeuthen, managing director of BankInvest Biomedical Venture in Copenhagen, Denmark. But you need to learn the language, he adds. At the most basic level, you have got to know your 'assets' from your 'business model'.
But networking remains key. "At the end of the day, a lot depends on the network that you manage to build," says Stampacchia, who got his position in part thanks to a conversation he started on a plane. He and other venture capitalists invite young scientists to contact them for advice.
Networking is getting easier as the number of resources connecting academia to industry continues to grow. It is no secret that the top US biotech hubs are located in academic supercentres, such as California's Bay Area, San Diego and Boston. Increasingly, universities are providing a bridge between academia and industry (see 'Human resources'). These intellectual meccas are known as a source of fresh talent, providing a plethora of back-up opportunities.
Know The Market
Anticipating regional market needs is important when contemplating a start-up position. Although technology-platform companies were all the rage a few years ago, most venture capitalists suggest that companies with a product are in a much better position today. "We want companies that are producing," says Stampacchia. "We avoid joining companies that just build models."
That approach is strongest in European countries, such as Germany, where venture capital has dried up. "There are fewer people willing to back companies at an early stage," says Stampacchia. Morrison predicts a painful two to three years until the market is again fruitful.
Although Scandinavia remains the bright spot in Europe, local venture capitalists suggest that the safest career move right now is to start your career in the drug industry to gain marketable experience. "For many biotech companies, you have to work according to drug-industry standards, because it is the intended customer," says Magnus Persson, a partner in HealthCap Venture Capital in Stockholm, Sweden. Indeed, many European companies are spin-offs from the drug industry. Drug development looks like a safe bet — in Europe, at least.
But Morrison doesn't advocate this approach in the United States. "Go to a young entrepreneurial life-sciences company that's doing something unique and cut your teeth there," says Morrison. "There's more opportunity in biotech."
All the experts agree that biotech is the reigning high-growth industry. And, as Alderete can attest, the risk can be worth it.
Human resources
From Stanford University's Bio-X programme to the California Institute for Quantitative Biomedical Research, a number of academic institutions are creating bridges between academia and industry. The Center for BioEntrepreneurship (CBE) at the University of California, San Francisco, provides networking opportunities for industry mentors, scientists and academic inventors. "The goal is to help the student and postdoc population to become leaders in the life-sciences industry," says the centre's director, Katherine Moortgat.
The CBE runs courses as well as providing start-up finance. Of the roughly 30 business plans and teams developed with support from the centre in the past three years, at least eight received significant venture-capitalist interest.