What 35 Years In Biotech Has Taught Me

By Dinesh Patel

With more than 35 years in the biotech and pharmaceutical industry, I’ve been a proud member of the discovery and development teams at large pharma and biotech companies, have founded multiple biotechs that I saw through to acquisition by large companies, and served as CEO of three. Today, I lead Protagonist Therapeutics (Nasdaq: PTGX), a clinical-stage biopharmaceutical company focused on developing novel peptide therapeutics to address unmet medical needs. Along the way, I’ve been through many boom-and-bust cycles biotech, and I’ve learned a few lessons that can help others weather the challenges of the current downturn ... and be ready for the inevitable upswing. 

First and foremost, make it a habit to never run out of money. Companies don’t fail because a drug program didn’t work. They fail because they deplete their reserves. In most instances, they simply didn’t raise money when they could, opting instead to wait for an ideal time and price target while failing to anticipate the ‘unanticipated’ downturns. In 2009, during the last financial crisis, the economy was tight at a macro level, and biotech stagnated. Debt burden pushed many companies into bankruptcy and forced asset sales kept others from advancing candidates to the next stage. The industry predictably recovered, but 2022 has again delivered one of the longest and steepest declines in biotech in two decades. Managing against uncertainty and low cash reserves is the number one concern CEOs I speak with share. At Protagonist, we’ve always believed that fundraising during the good times is a habit worth cultivating, and it’s best to assume you’ll always need more.

A single success is not enough. My kids would often jokingly challenge me, saying that anybody can get lucky once. Proving the value of your platform and development capability is dependent on the ability to replicate success. Advancing one successful drug program is challenging – but to advance two or more demonstrates real world applicability and viability of your approach. One of the companies I co-founded, Vicuron Pharmaceuticals, was acquired by Pfizer for $1.9 billion in 2005 in part because it had achieved success in two different late phase programs and advanced a new class of anti-infectives. At Protagonist, we’ve never focused only on just one program; we have two very diverse assets in clinical development.

Build your team with intention. Transformational innovation happens when you build a dynamic, diversified business with multiple revenue streams, and assets, the most important of which is human capital. Emerging company leaders are often forced to be judicious with resources and select talent very carefully, and that approach needs to be carried through every stage in the lifecycle of a company. In every company I’ve led, we were selective in team building early on, and many of our team members stayed with us since inception. Over the years, I've maintained that approach, seeking out astute, strategic company builders who bring long-term vision together with the rock-solid commitment, patience and humility, and a distinct ability to successfully evolve and adapt with the changing and growing phases of the company. Also, achieving successful outcomes comes from the strength of the differing perspectives and diverse backgrounds of the team, and by cultivating an environment where people are valued both for their individual areas of expertise and their ability to work as part of a team in a coordinated way toward a common purpose.

Bring the same intentionality to building work culture. Make an ongoing commitment to culture building and to demonstrating open communication within your company. Look for opportunities to drive connection, transparency, and team-based collaborative thinking — even in the moments that may not seem important.  The most rewarding - and productive - five minutes of my day is grabbing lunch in our cafeteria or stopping by the espresso machine to connect with employees, engaging in small talk, and hearing about what’s new and how they’re solving for challenges or unlocking fresh opportunities.

Know that setbacks and downturns are unpredictable and inevitable. Navigating them is the true challenge. Every CEO will encounter unexpected setbacks that can be compounded by investor reactivity. Certainly, Protagonist has had its share and is not unusual in this regard. A clinical hold on Rusfertide in 2021 took our program off track, but we were able to quickly resolve the issue, and maintain open communication along the way. When setbacks occur, own up to them and communicate with honesty and immediacy — both internally and to your investors. Failures are only failures if you don’t turn them into valuable learning experiences.

Busts aren't always bad. Build for the future. Boom and bust cycles come and go, and the best company leaders look for more than a way to survive during lean times. They drill down and focus on core competencies, solid value proposition and good science. That creates the foundation for productive growth. Panicking and losing focus during tough times is the greatest value destroyer. Instead, choosing to focus on execution and staying calm and committed generates uplifting and rewarding experiences and outcomes for a company, for its employees, and for other stakeholders.

Leaders, like companies, should evolve over time. I am focused on progressive evolution and a continuum of growth that is governed by core principles including a strong focus on drug discovery and development, and diversification of strengths at every stage of the journey from de novo discovery through commercialization. A leader can be effective in any market environment by staying authentically committed and humble, by maintaining confidence and belief in an approach (s)he knows works, and by constantly aligning to a higher noble purpose, which for us is to serve patients most in need.

Dinesh Patel, Ph.D., has served as the president and CEO of Protagonist Therapeutics since 2008. Prior to that, he was the president and CEO of Arete Therapeutics, president, CEO and co-founder of Miikana Therapeutics (acquired by Entremed/CASI Pharmaceuticals), co-founder and SVP of drug discovery and licensing at Vicuron Pharmaceuticals (acquired by Pfizer for $1.9 billion), senior director of chemistry at Affymax (acquired by Glaxo in 1995 for $533 million), and drug discovery group leader at Bristol-Myers Squibb.