Biopharma Preservation Through Partnership

By Matthew Pillar, Editor, Bioprocess Online

A CMC consultant was recently telling me some pretty entertaining stories about finance professionals with MBAs who led widget companies before jumping into biotech. They were stories of expectation vs. reality. Generally, he said, the multimillion dollar seed and series A rounds often rallied in biotech (though not so much at present) have caused many a product-oriented, non-scientific entrepreneur to jump in headlong, blissfully ignorant of two conflicting hallmarks of the industry: the snail’s pace of product development/regulatory approvals and a cash burn rate that’s not very accommodating to long-term financial planning. Unsophisticated, non-scientific biotech leaders, he said, are very difficult to work with.

Perhaps Craig Tooman didn’t get that memo. Granted, he’s not an interloper from a widget company; he’s been plugged into pharma since launching his career with Upjohn in 1992. But he is a “finance guy” through-and-through, having served finance management capacities at biopharmas large and small since earning degrees in economics and Japanese and an MBA in finance in the late 80s and early 90s.

In February 2022, Tooman was given the opportunity to exercise his finance experience from the head office when he advanced from chief financial officer to chief executive officer at Silence Therapeutics. With a realistic understanding of the slow product progress / fast cash burn paradox, Tooman’s approach to speeding up the former and slowing down the latter can be summed up in a word: partnership.

Here are a few key partnership model benefits that Tooman and I discussed on a recent episode of the Business of Biotech podcast.

• Non-Dilutive Funding Reduces Risk: “From a financial standpoint, we’re in really good stead,” says Tooman. “Our model draws from two sides, partnership and our own development pipeline.” The partnership part of the equation includes development deals with the likes of AstraZeneca, Mallinckrodt, and Hansoh Pharma in China, deals that offer stable sources of non-dilutive funding. That’s always a good thing, but its value is exacerbated during times like these, when the fundraising trail is strewn with more boulders than guideposts.
• People Protection In Partnership: The fallout from the constricted cash runways often experienced by entirely equity market-dependent biotechs runs deep and wide, and it often begins in HR and the head office. “From a management standpoint, we haven’t experienced broad reductions or turnover, because the notion of a short-term or even long-term downturn in the markets isn’t something that causes the kind of alarm that provokes people to seek other opportunities.”
• Partners Fortify Proprietary Programs: With multiple preclinical programs moving toward phase 1, and two programs advancing toward phase 2, Silence is approaching a stage of the emerging biotech clinical journey that can get pretty spendy. Going into the clinic is expensive, and when clinical data creates excitement and momentum, those expenses snowball. “We’re in a phase now where we actually need to grow, we need to be well-resourced,” says Tooman. That combination of external reliance on markets, which has its rewards in boom times,

and the security of steady, non-dilutive partner money creates a sense of security on which to fund that growth. It also creates assurance that as further clinical advances require even more resources, the partner will be poised to double-down on its commitment.

• With The Right Platform, Partnerships Allow YOU To Be Discerning: Investors are in a period of hyper discernment right now, which is a tough spot for cash-deprived, “pick me” biotech startups. But with tight technology in its platform offering and some examples of progress with big bio under its belt, Silence has flipped that paradigm on its ear. “We’re in vogue right now,” says Tooman. “We’re entertaining more partnership opportunities than we can pursue. That’s where I’m spending a lot of time right now, thinking about where to put that incremental dollar to get incremental return for our owners, and that’s a good problem to have.”
• Partnerships Prepare You For Competitive Pressure: There’s a chance that Silence might one day find itself competing head-to-head with Amgen on a commercial scale. It’s far more likely to be competitive in that fight with the likes of AstraZeneca in its corner.

At present, Silence’s development efforts are about half proprietary and half partner programs. Some companies that play the partnership model choose a heavier ratio, in either direction, depending on their strategy. Tooman likes the balance. Learn how he maintains it on episode 97 of the Business of Biotech podcast.