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These articles by Barbara Fox were prepared for the
April 18, 2001 edition of U.S. 1 Newspaper. All rights reserved.
Biotech’s Blooming: William Crouse
Intriguing dynamics are at play in the biotech
right now, says William W. Crouse, managing director of
Ventures LLC at 44 Nassau Street (609-430-3900). "The year 2000
was the biotech industry’s most significant year ever, and biotech
is without a doubt now a real business, with real products, a rich
pipeline, lots of money on the balance sheet, and a real bright
says Crouse. "Yet there are still many, many opportunities to
start new and exciting companies."
Crouse moderates the opening panel at Biotech 2001, the regional
set for Monday and Tuesday, April 23 and 24, at the Atlantic City
Sheraton and the Atlantic City Convention Center. Billed as the
regional biotechnology conference in the country, the event is a joint
undertaking of the Biotechnology Council of New Jersey (BCNJ) and
the Pennsylvania Biotechnology Association. The organizations’ goal
is to build a new biotechnology industry by capitalizing on the
of pharmaceutical giants in the region. Cost: $400. Call 800-231-0022.
Crouse’s session features an overview of the past, present, and future
state of the biotechnology industry. The speakers include
Zaugg, vice president of strategic business planning, IMS Health;
Keith Brownlie, partner, Ernst & Young; and Jessica
of McKinsey & Company.
Crouse explains the often-confusing difference between
and "biotechnology." Pharmaceutical companies evolved from
chemical firms and traditionally focused on making compounds that
could have a therapeutic effect. In contrast, the biotechnology
turned to the latest discoveries in human biology to develop
"Twenty-five years ago there was a biotech and a pharmaceutical
industry," says Crouse. "Now what we have is a
industry. Those lines will continue to get even more blurred as time
goes by." For instance such biotech pioneers as Genentech and
Amgen are now fully integrated biopharmaceutical companies.
"The large pharmaceutical companies have always been excellent
at clinical development, regulatory, and marketing. There has always
been some difficulty in transferring new technologies out of academe
and bringing them to the market place, and biotech has stepped in
to fill that role very well."
In the last 10 years the biotech industry has matured, he believes,
and is positioned for strong growth. "Progress is being made in
understanding biology. Companies are marching towards making major
advances. The industry’s pipeline has more products in late stage
clinical development than ever before, and it is better funded than
ever before. The pharmaceutical companies look more and more to
for their new product flow." Some of the tools helping to fuel
can investigate the function of each small piece in order to screen
for useful drugs.
have come from discovering new concepts of biology.
based on three dimensional structures that will fit into a biological
for its sixth fund, the $300 million Healthcare Ventures VI; it has
made seven investments for this fund so far and is very close to
several others. The fund added follow-on money to earlier investments
in 3-Dimensional Pharmaceutical (now with a branch at Cedar Brook
Corporate Center) and Advanced Pharma in Gaithersburg. The latest
fund makes new investments in CellGate in San Francisco, Novazyne
in Princeton and Oklahoma, and Integrity in Cincinnati, Tolerex and
U.S. Genomics in Boston.
Before leaving hands-on management to be a venture capitalist, Crouse
was most recently worldwide president of Ortho Diagnostic Systems
in Raritan and vice president of Johnson & Johnson International.
A graduate of finance and economics at Lehigh (Class of 1964) with
an MBA from Pace, he started out as a sales representative for E.R.
Squibb & Sons.
He has worked for Revlon Health Care Group and been division director
of DuPont Pharmaceuticals, responsible for international operations
and worldwide commercial development. Kurt Landgraf, now CEO at
Testing Service, was his successor there.
Crouse’s job at OrthoDiagnostics was to resuscitate the company, and
he took it from $200 million to $500-$600 million in seven years.
But his major thrill came when Ortho introduced a blood test to screen
against Hepatitis C that could protect the transfusion blood supply.
"Before that, there was no test for it, and blood tainted with
the virus causes cirrhosis of the liver and liver cancer in the long
term," says Crouse. "It was an exciting time to be there,
and a lot of fun to rejuvenate a company that hadn’t had an exciting
new product in several years."
His other exciting moment was Squibb’s launch of Capoten, when he
was director of the worldwide product planning group. "We worked
with R&D and marketing to be sure it got rolled out in the best
way — it became Squibb’s largest selling drug ever, and my
played a major role in the introduction."
Crouse says he advises
young people to consider a career in the health care industry. "It
is a very exciting field. Our knowledge base explodes on a daily
We have great opportunities to make major breakthroughs in advancing
the field. Healthcare is something that everybody wants, and the
is growing, so it is a growth business, and not particularly cyclical.
A certain degree of altruism is involved with working in an industry
that ultimately provides some very handsome benefits to mankind in
terms of morbidity, mortality, and quality of life."
This is the tightest biotechnology market in history,
and companies are finding it difficult to hire and retain scientists
and executives, says Gene Mancino of Blau Mancino, the executive
search firm at 12 Roszel Road, but it is still possible to recruit
quality people. Just be very clear about what kind of person is
and then take quick action.
"Companies need to have a game plan to identify, evaluate, and
hire the people and not wait for the perfect hire," says Mancino.
"That doesn’t mean they have to compromise, but they do have to
move quickly. If you come back to your second choice, the candidate
will be gone." His firm works on a retainer basis, for a company
or a venture capitalist, to fill senior level management positions.
Mancino will speak at Biotech 2001, the regional biotechnology
on a panel entitled "Labor Issues — Finding and Recruiting
Key People." The moderator is Lawrence Cunningham, vice
president, human resources, Centocor Inc. Other speakers include
Johnson, president and CEO, TissueInformatics Inc. and Kevin
Mullen, director, human resources, 3-Dimensional Resources.
A native of Guttenberg, New Jersey, Mancino received a BA in
from Princeton University, Class of 1978, and worked in sales at
and Gamble before joining Blau Kaptain Associates in 1979. Blau
retired in 1985, and Mancino became
principal owner of the firm in 1995. "I thought I would do it
for two years, and now I own the company," he says
Other fee-based recruiters in the life sciences field include
on Roszel Road and Ken Clark International on Lenox Drive.
The fee for placing a senior executive, who might earn from $250,000
to $300,000, is one-third of the first year’s compensation package,
including base salary and performance bonus. Together with three other
recruiters, Mancino and his firm might take on 10 assignments at once.
One recent placement was Christian Schade, who came from Merrill Lynch
to be the new chief financial officer at State Road-based Medarex.
Another was Stephen Sudovar, who had been a senior executive at Roche
Laboratories and is now the CEO of EluSys Therapeutics in Pine Brook.
Timing is crucial, Mancino warns. The more people involved in a
the harder it becomes. If a senior candidate must be interviewed by
everyone including two members of the board, the logistics of those
meetings might take 60 days. "At the senior level,
nothing replaces face to face meeting in a room," he says.
Geography is another big obstacle to recruitment, Mancino says. About
30 percent of his business is in New Jersey — an ideal territory
for the headhunters, because so many pharmaceuticals and biotechs
are located here. Executives can move from one company to another
without changing school districts. "Particularly at the senior
level," he says, "they will commute long distances and aren’t
afraid to work long hours, but if they have a kid who is a sophomore
in high school, they are loathe to move."
If you are 22 years old and your goal is to be a life sciences CEO,
Mancino has this advice:
Rise up to become vice president of marketing or business development.
management experience. Run something or have full P&L (profit & loss)
In this industry, nevertheless, money isn’t everything. "There
is a very strong positive feel about these folks," he says.
like to help people. Life sciences as a whole is a great industry,
and we can do lots of positive things with the combination of big
pharmaceuticals and biotech, you just have to work at it. It has great
people, very smart, and very passionate about what they do. It’s neat
stuff. I enjoy it — I’ve done it for 22 years, and I learn
new every day."
In March, 2000, biotech stocks were exuberantly
says Gordon Ramseier of the Sage Group, and this happened
any rational reason. "My advice to anyone who wanted to hear what
I had to say was `Raise money. As fast as you can. Put it away because
it is going back down,’" says Ramseier. "None of the analysts
were hollering this is crazy. They were trying to figure out why it
The valuation changes have been "an incredible roller coaster
ride," he says. "At the end of ’99 the market capitalization
of the Jersey biotech companies was about $8 billion. By March of
2000 it was $23 billion. By the time we made a year-end report in
December, that had dropped to $15 to $16 billion, and last week it
was $8 billion."
Ramseier moderates a panel on Tuesday, April 24, at 1:30 p.m. for
Biotech 2001, the convention in Atlantic City. His panel will tell
how to structure a partnership between a biotechnology and a
company. Panelists include Ronald Pepin, vice president of
development at Medarex, John S. Zawad of Aventis
John Keller of GlaxoSmithKline, and Peter E. Grebow
Cephalon. Call 800-231-2022.
The ups of last year’s market certainly provided an opportunity
for many companies to raise cash. "The smart ones like Celgene,
Medarex, and Enzon went to the market when the buyers were frothing
and they raised a lot of money." If the employees’ stock options
are worth half what they were, at least they have had the flexibility
to manage their businesses and grow.
The picture is less rosy for the have-nots. "Companies that didn’t
cash in last year are going to find it harder to get this year. If
they haven’t improved, the situation is probably worse for them now
— but it wasn’t very good then either."
The effects of the bull market on the companies that got funded are
two-fold, Ramseier says.
amass cash can do their partnering more carefully. "A lot of
is done because they run out of money and go partnering frantically
as a source of funding. If they were in good shape and raised money
they bought some time so they could do partnering in a rational
doing the partnering nowadays. The Amgens and Genentechs — the
mature biopharmaceuticals below the big tier — are also becoming
buyers of technology from the smaller companies.
"If you just suspend time and pretend the year 2000 didn’t happen,
not much has changed in terms of overall value. The rules of the
and the challenges from 1999 are still there. There are no new magic
ways to succeed, and no barriers to success have been erected,"
says Ramseier. "We are a unique industry because little companies
that form themselves as biotechs face totally unique challenges. Good
"I tell everyone the same thing I have been telling them for the
past two years. Do the science well. Communicate well. Do your job
right. Persevere. There is a market out there, and there are partners,
and they are not going to go away. We haven’t stepped into a totally
— Barbara Figge Fox
in the Nation’s Pharmaceutical Center", Monday, April 23 and
Tuesday, April 24 at the Atlantic City Sheraton and the Atlantic City
Convention Center. Jan Leschley , chairman and CEO of Care Capital
on Nassau Street, the keynote speaker. Cost: $400. Call 800-231-0022.
fundamental business strategies for biotechnology and biomedical
and service providers. Focusing on companies in initial start-up,
early and middle stage development, presenters will analyze and
the critical issues underlining the creation and management of life
science companies. The moderator is Thomas Penn , general
Meridian Venture Partners.
in the law that executives need to understand in order to successfully
manage transactions in the biotechnology arena. Moderators are
Malinowski, professor of law, Widener University Law School and
author of Biotechnology: Law, Business, and Regulation; and Manya
Deehr, partner, Morgan, Lewis & Bockius.
By invitation only, this event features former senior Pharma
talking about what it is like to make the transition to Biotech.
include John Jackson, chairman and CEO, Celgene Company;
U’Prichard, CEO, 3-Dimensional Pharmaceuticals Inc.; P. Roy
Vagelos, chairman, Regeneron Pharmaceuticals Inc.; and Douglas
Watson, president and CEO, ValiGen Inc.
Having on Biotech. An exploration of how new SEC rules have changed
the role of financial information, what investors and analysts really
want to know, and what the SEC will let you say. The moderator is
Jason Rubin, president, the Redstone Group. Speakers include
Linda Griggs, partner, Morgan, Lewis & Bockius; Michael King,
principal, Robertson Stephens Inc.; Eric Schmidt, senior
analyst, SG Cowen Securities.
on how new technologies, including the Internet, are having an impact
on the design and management of clinical trials. Moderator is
Jacob, M.D., chairman and CEO, Inkine Pharmaceutical Inc. Speakers
include Walter Kozachuk, medical director, research and
affairs, Stat-Trade Inc.; Leslie Michelson, CEO and co-founder,
Acurian Inc.; and John Riefler, M.D., medical director, Omnicare
ethical, and public relations aspects of managing competing interests,
with special attention to the new FDA regulations for financial
Moderator is Erica Rose, head, R & D policy, U.S.,
Speakers include Linda Carter, assistant director for regulatory
affairs, FDA; Mary Gross, senior policy analyst, FDA; Ina
Roy, M.D., assistant graduate studies director, University of
Health Systems, Center for Bioethics, Michele Russell-Einhorn,
director, clinical research consulting group, PricewaterhouseCoopers;
Bruce Williams, vice president of marketing and sales, Celgene.
of how biotechs can tap into partners and dollars in Europe and Japan.
Moderator is Richard Sherman, managing director of QEO
Inc. Speakers include Alain Munoz, president, science and
management, S.A.R.L.; James Foley, vice president and director
of business development, GlaxoSmithKline; and Tamar Howson,
consultant and former senior vice president and director, business
development, SmithKline Beecham.
For another article about this conference go to
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