Life Science Rabbit Hole #7: 5 Key Challenges Facing Pre- and Early Commercialization Life Science Companies

If you are in a Pre- or Early Commercialization stage Life Science company, congratulations.? After years of unrelenting effort, you are on the cusp of bringing a life-changing therapy to market. ?

Here are five critical factors that commonly impact Pre- and Early Commercialization stage Life Science companies that you will need to manage.

1.?????? Make-or-break milestone

2.?????? New executive dynamics

3.?????? Company scope and scale

4.?????? R&D portfolio complexity

5.?????? Exit strategy and expectations of a strategic buyer

Let’s explore each and discuss how to navigate this critical period successfully.

1.?????? Make-or-break milestone. ?Unlike when you were an earlier stage company, at this point the world is watching.? If you are a public company, investment analysts are revising their outlook on you seemingly every day.? If you are privately owned, key investors are asking innumerable questions of your CEO.? Every upcoming milestone is absolutely critical, and there are major consequences for a delay or failure, whether it is to your NDA or BLA filing, pre-approval inspection, or commercial launch readiness. If you have weaknesses in project planning and tracking, if you have a culture that hides emerging problems while they try to resolve them under the radar, if you lack enough people with deep technical expertise and experience, if you have executives who have difficulty making decisions under uncertainty, these gaps will become crystal clear very quickly.? The pressure is on.? It’s time to make the doughnuts.? What you must manage: “The Pressure Cooker.”?

2.?????? New executive dynamics. ?As companies approach commercialization, new executives are often hired – Chief Medical Officer, Chief Commercial Officer, head of Market Access, etc.? The executive team dynamics and power structure changes.? There are more voices around the table.? Executives are now asserting themselves differently.? Earlier, the primary topics and debates may have been related to clinical studies, analytical methods, process validation, etc.? Commercial executives may have been more passive.? Now, Commercial executives are claiming more air time and placing different demands on the team, injecting themselves into topics such as shifting manufacturing capacity away from clinical batches to commercial, pushing for commitments about ramping up pre-launch volume, getting commercial-related IT systems deployed RIGHT NOW, etc.? Despite the added complexity and unfamiliar team dynamics, you need to maintain or even improve your leadership team performance - because those make-or-break milestones are right in front of you.? What you must manage: “Forming storming and norming while performing.”?

3.?????? Company scope and scale. ?Your company is growing as you staff up in anticipation of a commercial launch.? Newcomers have different expectations than early employees who joined when the company was small. ?The early employees may prefer the old small-company style – scrappy, egalitarian, and research-oriented – and become disenchanted with the structure added to enable a larger, more complex operation. ?The newcomers may be driving for more process maturity and rigor and become frustrated by the lack of agreed processes and informal decision-making. ?It’s also quite likely that many of your mid-tier executives (Senior Directors, Vice Presidents, and even Senior Vice Presidents) are first timers in roles of this seniority and lack the experience of how to operate at their level.? You will be adding and operationalizing new processes such as sales, marketing, revenue management, regulatory affairs, etc. ?As a larger company, employee onboarding and communication are more important and now require organization. ?You have conditions that, if left unmanaged, can be a meaningful drag on company performance and employee engagement.? At possibly the most critical time in your company’s history.? What you must manage: “Managing at scale, sustaining employee engagement.”?

4.?????? R&D portfolio complexity. You are probably transitioning from a company with a single lead candidate plus some backups and a skunk-works moon shot or two, to a more diverse portfolio, addressing adjacent disease areas, next generation products, new technologies, etc. This presents issues regarding portfolio decision making, the new product development process, cross functional teams, scientific and technical oversight of your projects, and project management.? You now need to manage competing claims on shared resources such as analytical methods, medical writing, and process validation.? If you aren’t careful, decisions taken by one team, one manager, or a small group will negatively impact your ability to progress your company’s most critical projects.? Also, your people are now working on multiple development projects, so you will need common deliverables, a defined process, and clarified decision making authority for product development initiatives. ?What you must manage: “Ad hoc product development is no longer sufficient.”?

5.?????? Exit strategy and expectations of a strategic buyer. ?If your strategy includes being acquired, you must know how potential buyers will value the business and be prepared for their diligence. If you're a small unit of a larger corporation, you must meet corporate financial expectations for revenue, profitability, and capital investment. ?You need to be able to present a clear and highly-focused strategy, strong scientific data, and an attractive financial model.? You need to demonstrate that your portfolio is aligned to the strategy, and that you've used financial and scientific rigor to make your pipeline decisions.? Although in many cases a strategic buyer is likely to wait until you have commercialized your first product, now is the time to start tuning up your story, your financials, and your scientific data.? You can see the pot of gold at the end of the rainbow.? Even if you really, truly, have a game-changing therapy, if you tell a muddy, unfocused, and incomplete story you will not achieve the kind of favorable exit that you, your employees, and your investors counted on. ???What you must manage: “Board + Executive effectiveness – nowhere to hide.”?

There you have it: 5 Key Challenges Facing Pre- and Early Commercialization Life Science Companies.? Yes, these challenges are big and not easy to solve.? But who said curing Cancer or Alzheimer's or ALS was going to be easy?? You got your company this far and you won’t be stopped.? Remember what is at stake and go make it happen.

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I hope you enjoyed this post in Life Science Rabbit Hole.? As always, your comments and suggestions are welcome.