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New Update June 2018: VC Firms are a critical component of the life-sciences development process

Written by:

Jessica Joseph

PhD Candidate: Cellular and Molecular Medicine

While working towards a Masters or PhD in the biological sciences, it can be difficult to gauge what kinds of roles and positions exist for graduates outside an academic setting. Industry positions in pharmaceutical, biotech or medical device companies also offer bench science. Yet there is also a plethora of jobs and careers that focus on scientific training, data interpretation and critical thinking skills, without the pipetting. One such career that brings business skills and objectives into the equation is venture capital. VC firms fund promising companies at early stages of development to move to the next step and provide essential resources to emerging companies, in management expertise and contacts as well as funding. In the biotech realm, in which many millions of dollars can be necessary to acquire the data needed to move forward, VCs are a critical component of the life-sciences development process.

Dan Fero is currently a Principal at Merieux Developpement, an international venture capital firm focused in the healthcare sector. Dan previously worked for L.E.K. Consulting for 5 years, working as a strategic advisor to various life science clients. Before his time there, Dan graduated with a PhD in Biomedical Sciences from the University of California, San Diego.

Merieux Developpement works in four different investment areas: in vitro diagnostics and life science tools, medical devices, patient management services, and pharma, prevention and nutrition. As an evergreen fund, Merieux Developpement provides each company within the portfolio access to a renewable fund life, with increased liquidity and straightforward management fees. This allows Merieux Developpement to work closely with their portfolio companies and create flexibility in the funding process. Dan was able during a phone interview to answer some questions about his work and how he got to where he is today:

  1. What are the responsibilities of a “Principal” at Merieux Developpement?

Dan is first the contact person for smaller companies who are being brought into the portfolio. Once they have moved through the preliminary steps (technical assessment, due diligence, management interviews), he meets with them alongside Merieux lawyers to negotiate terms and decide on the company’s goals with the current board members. Dan also has a scientific role in analyzing data in order to determine current value, as well as feasibility and potential deliverables. Specifically, as Board Observer of Xeris Pharmaceuticals, a company focused on producing improved injectables for multiple indications, Dan has a large scientific as well as business role in guiding the company’s direction, looking at the product, price and promotion of their company. This relationship is maintained throughout the life of the funding.

  1. How is healthcare venture capital different from other VC investment sectors?

Qualifications distinguish all VCs, but especially in the healthcare or life sciences sectors. This is not limited to the individual members of the VC (for example, Dan’s PhD has prepared him well to analyze scientific and clinical data), but also their portfolios and history. Since biotech in general has high risk, long lead times, immense capital requirements, bringing the possibility of high return, having experience in this area and an ability to critically analyze projects is key.

  1. What are the next steps in a VC career after Principal?

Different venture capital companies can have different career paths for their employees. For example, Third Rock Ventures encourages their associates to follow through with the companies they fund, to be hired there full-time. Alternatively, Merieux felt like the right fit for Dan because he intends to stay within the VC world and become a partner—which Merieux is more known for. It’s important therefore to know the type of VC company you are joining and if their goals for their employees align with your own.

  1. Should I get an MBA after my PhD if I want to go into venture capital?

Speaking from his own career progression, Dan suggests pursuing work experience over another degree such as an MBA. Having worked at a life sciences consulting group for 5 years, Dan highly recommended getting involved with either a startup or consulting job. Not only do you gain hands on experience about business, but it also exposes you to other companies and careers that could be opportunities for your career development in the future. That being said, there is no one path to get involved with venture capital. While consulting tends to be a large feeder into VC, there are multiple ways to get experience and make connections to get you into a VC role. For PhDs who are business oriented, Dan recommended trying out internships and committing at least a few months to the VC lifestyle to see if it is the right fit.

  1. What percentage of the job is business versus science?

In terms of brain usage, Dan estimates that roughly one third is devoted to science and two thirds are devoted to business. Within that breakdown, the science portion can be geared towards understanding or discovering the basic mechanism or target behind a therapeutic, or towards constructing or helping to interpret clinical trial data. From the business end, Dan moves between multiple areas, including commercial opportunity, market strategy, adoption of the product, price points, competition, regulatory requirements, and more. The scientific training he gained through his PhD has allowed him to closely analyze the scientific data, where his experience at L.E.K. provided the business experience and know how.

  1. What traits are required to make a great venture capitalist?

A great fit requires three traits specifically: 1) “people-person” mentality, 2) an analytically objective, data driven orientation, and 3) facility with multitasking in a variety of roles and concepts. As a VC you bring your expertise to the table, but often the companies you are working with already have concepts about what their data means or how they want to structure their company. It is important therefore to respect the work they have put in so far, but also to guide them towards the direction your firm sees for the company. This is closely tied to objectivity, since not only do you need to analyze the data itself, but also be able to work with people and not let your relationship with them (either positive or negative) affect your judgement of the project overall. As Dan mentioned previously, you also need to be able to jump between roles in the scientific and business areas, sometimes within the same sentence, and so need to be flexible.

Many thanks to Dan for his perspective, and for taking the time to provide insights into a fascinating career path for scientists who are ready to move away from the bench and into business.

 

*UPDATE:

6/25/18 Congratulations to Dan and the Xeris Pharmaceutical team on their successful scientific and business ventures! Xeris Pharmaceuticals recently released a statement describing the success of two Phase 3 trials examining the symptomatic response and efficacy of their glucagon rescue pen for severe hypoglycemia in children and adults with type 1 diabetes. Xeris hopes that with this positive data, they are one step closer to bringing a “well-tolerated and functionally effective alternative” for emergency intervention to the diabetes community.

6/26/18 In addition, Dan and the Xeris team successfully closed their IPO at $15.00/share with over 6.5 million shares of common stock, meaning the gross proceeds reached approximately $98.3 million (definitely worth popping some champagne over). Congratulations again to Dan and the Xeris team! To keep up with Xeris Pharmaceuticals news, check out their website here.

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