The Keys To Biotech Success: People And Relationships

By Henrijette Richter, Managing Partner, Sofinnova Partners

When asked what makes a biotech start-up successful, I always emphasize the importance of people and relationships.

For a pre-seed biotech start-up to get off the ground, it needs the right people from the start. Ideally, this includes advisors with hands-on company-building experience and complimentary networks. Good people attract other good people, and experienced hands help to make better decisions. If an experienced company-builder has faced failure in the past, that’s a positive — learning from setbacks is just as valuable as learning from successes.

Make Full Use Of Every Network You Can Access 

Every person a biotech start-up brings in, from advisors to venture capitalists, has a network. Biotech entrepreneurs must consider this "network of networks” as one of the most valuable tools in their toolbox. They should leverage this network each time a critical decision needs to be made. A well-maintained and ever-expanding network provides a wealth of valuable insights, powerful anecdotes based on real experiences, and a pool of potential partners or team members. As entrepreneurs start talking to VCs, they should try to get an idea of how valuable their networks might be. Older, well-established firms tend to have the most useful networks. Look at a firm’s previous investments for clues.

Keep An Open Mind

My partners and I are often asked: What kinds of people do you support?

We are backing exceptional people who want to make a difference. However, entrepreneurship is not a solo endeavor, it is a collaborative process. Being able to listen and accept feedback is important. We want to work with people who can see that getting from A to B is always going to be a collective effort.

If someone approaches us with the attitude of “please just provide the funds and I'll handle the rest my way,” we’re unlikely to invest in them. Venture capital is a long-term partnership, and it should be a collaborative effort all along the way.

Mapping The Journey

Once an entrepreneur has a group of experienced team members, it’s time to address key early questions: Will this idea lead to something that will significantly help patients? What do we need to bring it to fruition? What will the key challenges be in terms of discovery, financing, and advancing the science to the point where a potential buyer would be interested enough to step in and take it through to Phase III and registration?

Crucial Requirements

Even the most talented, well-financed entrepreneurs require two crucial elements in order to build a biotech: 1) a patient group that is not served well enough by existing medication; 2) original, patented intellectual property. Without these, there is no business, investors, or acquisition potential.

Bringing In A CEO

When does the board start looking for a new CEO? This is another common question we are asked, and the answer, which may be frustrating, is: it depends.

The CEO role requires an individual who comes with both project management and drug development experience. Academics often lack real experience in drug discovery as they tend to be focused on solving biological questions with fundamental science.

If a founder is coming straight from university, we often go to our network to find a CEO before the Series A round. Even with experienced team members, simply placing a first-time entrepreneur in the CEO seat and saying, “Now go,” isn’t effective. Typically, at the seed stage, a founding CEO transitions into a Chief Scientific Officer or Chief Medical Officer role, depending on their background.

Another tried-and-true method is to pair a first-time CEO with a seasoned executive board chair. This combination works well, especially up to the Series A stage.

The gold standard is a founder who has led a biotech start-up or two before. For example, one of our current seed companies has a very experienced CEO who has done this multiple times. Serial entrepreneurs will always want to explore new ventures.

An accelerator like Sofinnova’s Biovelocita creates companies around promising intellectual property. In this scenario, the VC partners are hands-on operators. They form the company and initially take on C-suite roles themselves.

Sharing Knowledge And Experience

Great entrepreneurs appreciate and rely on the networks their investors make available to them. Our network includes a lot of repeat entrepreneurs who are serial CEOs or board members of our portfolio companies and exemplary advisors for our less experienced CEOs.

Marc de Garidel is a great example. He came in as CEO of Corvidia Therapeutics, leading its $2.1 billion sale to Novo Nordisk in 2020. He then became CEO of CinCor, which was acquired by AstraZeneca for $1.3 billion in 2023. Now, he's CEO of Abivax, a late-stage company in the Sofinnova Crossover Strategy. Marc also continues to advise some of our earlier stage companies.

All this knowledge-sharing and mutual support is driven by a common motivation: helping patients. When a promising molecule or compound has the potential to make a difference for patients, everyone involved has a desire to advance it with the highest degree of success.

Times Change, The People-Oriented Approach Should Not

Amid this challenging post-Covid fundraising environment, the focus on people should remain sharp. Having the right people from the seed phase on is more crucial than ever before. We are seeing more seed rounds with multiple investors and larger amounts, which are designed to reduce Series A fundraising risk.

In the current climate, it is wise to mature startups a little more before bringing them to Series A. This stage is critical because once the clock starts ticking, the company loses some agility and flexibility due to cash burn. So, at the seed stage, startups must have a clear and compelling story, be able to efficiently answer crucial questions and move their compounds or pipeline forward to be ready for the next financing round.

Platform companies, particularly those that are developing new biology with multiple potential indications, face increasing challenges. These companies, in particular the ones that include new science and therefore new targets, must demonstrate that the data points to an unmet need, and that the path to market is feasible with a reasonable amount of funding.

Investors want to know how a start-up will apply its biology platform to a specific indication and whether it will result in a meaningful product for patients. The bar has risen considerably.

Biotech is inherently cyclical, and while we are starting to see a more positive market trend, the days of listing a platform company that is seven years from the clinic for $250 million are unlikely to return soon.

Strategic Partnerships

Forging strategic partnerships with major pharmaceutical companies is becoming increasingly important for biotech startups. Start-ups must offer something completely novel, scientifically speaking. But the relationship factor is important here, too. Start-ups should start dialogues with pharmaceutical companies early and nurture these relationships consistently.

At Sofinnova, we value having corporate VCs in our syndicates and on our startups’ boards. They bring substantial expertise, insight, and support. These partnerships should be about sharing knowledge and building trust together, not just funding.

In my 20 years in this business, I’ve seen a real evolution in the relationships between corporate VCs, traditional VCs, startups and established pharmaceutical companies. In the past, major companies were often brought into the conversation at the very last moment. Now, we work together from the outset in a much more collegial manner. Ultimately, patients will benefit.

About The Author:

Henrijette Richter is a managing partner at Paris-based venture capital firm Sofinnova Partners. She is an active member of Sofinnova's Capital Strategy team, the firm's flagship fund dedicated to early-stage biotechs and medtechs. Richter’s investments and board involvements include Mozart Therapeutics, Muna Therapeutics, Nitrase Therapeutics, NodThera, Twentyeight-Seven Therapeutics, Asceneuron, Delinia (sold to Celgene), and iOmx Therapeutics. Henrijette holds a combined Ph.D. and Industrial Scientist degree in Molecular Biology from the University of Copenhagen and Novo Nordisk A/S. She did her postdoctoral fellowship at the MIT Center for Cancer Research in Massachusetts.