High-Growth Biopharma: Thriving Through Change & Volatility

Every organization has, what I call, their ‘secret sauce’—their specialty. When I joined Gilead I wanted to really understand from the people here, now my colleagues, what they thought that ‘secret sauce’ was."

Daniel O’Day
CEO, Gilead

Do you know what the secret sauce of your organization is?

We are in a period of significant change in the pharmaceutical industry, with many early-stage biotech companies struggling for survival amidst a downturn in investment and valuations. At the same time, a number of long-established global pharma companies are undergoing strategic rightsizing in response to evolving business models and many are moving away from healthcare conglomerates to pure-play biopharma. These changes are compounded by the COVID-19 pandemic and its profound impact on cultural cohesion and how companies ‘work.’

However, some biopharma companies have bucked these trends, continuing to grow and expand their portfolios and geographies in recent years. To understand how these high-growth biopharma companies have not only survived, but thrived, Russell Reynolds Associates interviewed nine CEOs and executive committee members in such organizations to glean how they successfully navigated through transformative growth.

These discussions led us to the following conclusions that are critical for success, explained in greater detail below:

1. Having the right leaders in place for future growth is important; onboarding them successfully and enabling them to drive necessary change is vital.
2. Maintaining cross-functional team agility, accountability, urgency, and transparency is crucial. 
3. Culture must be lived, not spoken about—requiring purposeful cultivation and implementation throughout the organization.
4. A clear, patient-centered strategy provides purpose and measurably enhances impact and commercial success.
5. Commitment to R&D investment in order to drive innovation and therapeutic differentiation is paramount.

1. Having the right leaders in place for future growth is important; onboarding them successfully and enabling them to drive necessary change is vital

To effectively navigate the transformation from early-stage biotech to successful commercial operation, organizations must identify and enable the right teams and leaders to help reach future goals. As these biopharma companies continue to expand into new therapeutic areas and/or geographies, they need to understand the critical capabilities necessary to execute their strategy.

As your company grows, you need more subject-matter expertise to really make sure you get things right. That's in areas like compliance, reimbursement, and pricing. The field team needs to be closely connected with the sites and the centers where your medicines are available. So, we were looking for professionals with not only the right capabilities, expertise, and talents, but also the right networks of people they are going to have to interact with for success."

Todd Simpson
CFO, Seagen

Executives of companies that have undergone this transformation have effectively hired for the different talent capabilities needed at different stages of their journey. In their early stages, many CEOs were looking for leaders with rapid-growth aspirations and a willingness to think boldly and act accordingly. However, as these companies gained momentum and began to execute plans for bringing a drug to market, CEOs sought to hire functional experts and those who possessed the skills, experience, and understanding of process and governance to ensure sustained commercial success and growth. Further, geographic expansion required talent with regional expertise and strong insight into the local market dynamics, regulations, and culture, whilst ensuring such individuals remained connected to the Global HQ.

Australia is one of our biggest success stories. We hired one person who had worked at one of the CROs and I had absolutely nothing to do with the next 250 people that were hired in Australia. That's our team there doing an incredible job on their own. For most of that geographic expansion, we empowered other people who executed on that vision."

John Oyler
CEO, BeiGene

When new leaders were hired, effectively integrating them within the organization and providing space for them to make impactful decisions based on their prior experience led to positive growth outcomes. Many of those we spoke to reiterated that once the right leaders are in place, they must be empowered and trusted to make the best decisions for their business functions without continual monitoring and guidance.

When incorporating new senior talent, it was important to know that their diversity of experiences would add to the milieu of the strategic planning at Jazz. Having these new leaders sit on enterprise forums, including the executive committee, participate closely with our board of directors, and help us set an appropriately ambitious corporate strategy has made for a better end product, and continues to. We continue to benefit from that diversity of points of view.”

Dan Swisher
President & COO, Jazz Pharmaceuticals

Lastly, those interviewed agreed that CEOs (and boards) must not shy away from making changes to the executive team when necessary. Recognizing which executives are best equipped to lead through growth—regardless of whether they were part of the organization prior to its transformation—and quickly acting upon those realizations ensures ongoing growth potential and success.

2.  Maintaining cross-functional team agility, accountability, urgency, and transparency is key

Creating and fostering an environment that provides employees with the freedom to work independently and test new ideas is a key aspect of successful biopharma companies. To attract and keep talent, it's crucial to preserve this culture that combines entrepreneurial spirit and accountability.

There is a lot of responsibility on the people that join us, and they join us because they like that responsibility. They don’t want to be one of many. They want to be able to make an impact in the role that they play. They’re go-getters and they see the ability to move the needle. We are in a real sweet spot with large company capital expertise, but small company mindset – it’s ‘entrepreneurialism-at-scale.’ It’s special for me and it’s special for most people who join.”

Daniel O’Day
CEO, Gilead

Some of these companies have maintained their agility and individual accountability by thinking of growth as horizontal. In this view, a new management team is not necessary every time new divisions or teams are added. With fewer managers, those in leadership positions have more direct reports who are free to work independently, with urgency and accountability. Further, some high-growth biopharma companies have worked to establish a lighter touch of governance by being more purposeful with what decisions internal committees make and also determining which decisions they are not going to make, instead allowing employees to decide for themselves.

I view growth as horizontal instead of vertical. We are trying to maintain as few layers of management as possible, so it will be impossible to micromanage. We want the role of manager to become that of a coach, so that when people need help they will come to you."

Herve Hoppenot
CEO, Incyte

Executives of high-growth biopharma companies agreed that making a concerted effort toward transparency within their organizations has helped establish their own visibility and approachability, while simultaneously strengthening cross-functional and multi-site cohesion.

Several CEOs we spoke to make a point of eating lunch at the campus cafeteria to promote informal conversations with employees of all divisions. One CEO even holds regular round table meetings with groups of up to 10 employees at a time to foster frank discussions and to provide genuine answers to tough employee questions—no questions are off-limits. CEOs whose companies have an international presence are often traveling around global sites for weeks, or even months, at a time to ensure visibility across the organization. This transparency provides employees with the real sense that they are being heard and allows executives the opportunity to listen to honest feedback.

Finally, allowing space for employees to test out new ideas without fear of repercussions for potential failure is vital for innovation. Companies that value the entrepreneurial spirit must nurture an atmosphere where employees are empowered to take risks.

3. Culture must be lived, not spoken about—requiring purposeful cultivation and implementation throughout the organization

Biopharma companies must have a vision for their company culture, and this culture must be continuously nurtured and articulated with purpose. Some biopharma companies choose to foster a collaborative, team-based atmosphere, while others prefer to empower the individual and focus on accountability. Either can be successful and, as companies scale, the culture may evolve. Regardless, knowing what values are core to the company is an important North Star.

As we continue to grow, a big focus for me has been the culture—to maintain our really positive and inspirational company culture. My first priority has been ensuring we keep the central elements, our core values, steady. The culture will evolve, but we need to keep those core values in place.”

Jan van de Winkel
CEO, Genmab

Sourcing a candidate with the right functional expertise is important, but having a clear understanding of how the candidate will lead is equally significant. Each of the biopharma executives we interviewed agreed that assessing candidates for alignment with their company’s core values is a top priority. Additionally, these values must be communicated and demonstrated during the interview process to reduce the chance of a culture clash after hiring; however, despite best efforts, this may still occur. As such, recognizing the risk of potential culture clash is important, and having a development plan ready for when these situations arise provides comfort to the broader organization, demonstrating that executives are aware of and value company culture.

Biopharma executives also agreed that culture can be effectively scaled throughout company growth. To do so, first, core values must continue to be demonstrated day-to-day and as new talent is brought aboard. Second, culture can and should be measured. Employees should be surveyed to determine whether or not the company is living up to the values they wish to exemplify. If not, leaders must intervene, attempt to course correct, and eventually re-measure the culture to determine whether said interventions were successful.

Lastly, recognizing that consistency across geographies may not be possible, or even beneficial, allows for regional leads to cultivate a unique culture that attracts local talent. While culture may vary slightly from region to region, maintaining the organization’s overarching values framework and philosophy is imperative for cohesion.

Culture is measurable. Ask employees if the values that are talked about are seen in action every day. And then you have to listen to what people tell you. You have to be willing to hear affirming or disconfirming information. If told you are off track, provide a solution or intervention to get back on track."

Bruce Cozadd
CEO, Jazz Pharmaceuticals

4. A clear, patient-centered strategy provides purpose and measurably enhances impact and commercial success

While every biopharma company would say they are patient-centric, CEOs of high-growth enterprises made it clear that they have successfully embedded patient-centricity into their organization’s DNA. This emphasis on the patient is part of how such companies initially attracted, retained, and developed talent before growing to the scale they are at now, allowing them to further expand upon their goals to help as many patients in need as possible. Maintaining this connection with patients and ensuring that the company mission is clear and focused on driving value for patients is essential to align and motivate teams.

I find fulfillment in the work we’re doing in health equity and the importance of giving back to society and helping underserved communities. To be very honest with you, at this stage in my life, that’s my intrinsic motivation.”

Daniel O’Day
CEO, Gilead

Organizations that have succeeded at putting the patient first start by connecting with their patients to understand unmet treatment needs. When biopharma companies have a deep understanding of the population they are serving, they are better suited to deliver a novel drug that will fill a treatment gap and significantly improve patients’ lives.

This notion of patient centricity is not just about how at the end we need to have an impact on the patients, but starts with the idea that everything needs to start with the patient. We moved away from a linear approach of science to patient, or from bench to bed, and into a cyclical sequence. We start with the patients, connect them with science, and by better understanding the patients we can be more creative. We can produce innovative scientific hypotheses that we can translate into a medicine."

Jean-Cristophe Tellier
CEO, UCB

Employees that understand the patients they are helping have a greater sense of purpose and impact. Many of the executives we spoke to said they make a point of regularly connecting patients with their employees at town halls and all-hands meetings. Patients are given a platform to discuss their health experiences and how the therapeutics they use have had an impact on their lives. At Incyte, which developed the first drug to treat vitiligo, leaders invited a patient to speak at their Town Hall meeting about how their quality of life drastically improved post-treatment. This story demonstrated the company's impact, motivating employees to continue innovating to help as many people as possible.

Finally, meeting patients where they are is critical. High-growth biopharma companies have developed an international presence with a global clinical trial infrastructure. The cost of clinical trials can be reduced when the appropriate infrastructure is in place around the world, lowering the cost of drug development and further allowing biopharma companies to reach as many patients as they can in every region.

I am excited to show the world that the cost of developing drugs can be much, much lower. We are trying to get affordable medicine to the majority of people in the world, as opposed to one-sixth of the world. Our plan is to not only provide affordable medicines for the world, but great medicines."

John Oyler
CEO, BeiGene

5. Commitment to R&D investment in order to drive innovation and therapeutic differentiation is paramount

Every high-growth biopharma company has expanded its R&D pipeline and views significant investment in R&D as critical to its long-term success. Executives we spoke to agreed that ongoing innovation and R&D focus are required for growth.

When comparing R&D spend, we found that successful high-growth biopharma companies significantly outspend their big pharma counterparts—on average, they put 48.8% of their revenue toward R&D in 2021, compared to an average of 19.4% among a selection of 12 of the world’s largest pharmaceutical companies.

While increasing R&D investments is key, these investments won't find success without a coherent strategy. Every executive we interviewed had a deep understanding of where their organization excelled and which new therapeutic areas they were best positioned to explore next.

It was going to be difficult to grow the company by only developing ultra-rare products. When we looked at our core competencies, it was clear we understood rare diseases through genetics and genomics. So, we decided to grow into larger indications, high in medical need, and leverage our know-how in genetics to do that.”

High-growth Biopharma CEO 

When expanding into a new therapeutic area, biopharma organizations typically need to hire external talent with deep expertise in the field. However, this introduces a catch-22—it’s difficult to attract top R&D talent to an organization that isn’t historically known for that specific space. To combat this and attain the necessary external talent, organizations need to establish credibility. Many of the high-growth biopharma companies that we spoke to accomplished this by bringing on board a well-connected and respected condition-area expert.

When you are trying to get into a new therapeutic area, it can be a challenge to get the top researchers, developers, and commercial leaders to join with that specific portfolio expertise. We hired senior-most leaders who believed in the strategy, who understood the scientific basis, and who were ready, at that stage of their career, to build something new."

Daniel O’Day
CEO, Gilead

Authors

• Megan Aparicio is a member of Russell Reynolds Associates’ Biopharma practice. She is based in Toronto and New York.
• Victoria Fibig is a member of Russell Reynolds Associates’ Healthcare Knowledge team. She is based in New York.
• Cameron Findlater is a member of Russell Reynolds Associates’ Healthcare Knowledge team. He is based in New York.
• Peter Levin is a senior member of Russell Reynolds Associates’ Biopharma practice. He is based in Copenhagen.
• Yvonne Lu co-leads Russell Reynolds Associates’ Global Biopharma practice. She is based in San Francisco.
• Patrick Mooney co-leads Russell Reynolds Associates’ Global Biopharma practice. He is based in London.
• Danny Ryan is a member of Russell Reynolds Associates’ Biopharma practice. He is based between Boston and London.
• Tiffany Yam is a member of Russell Reynolds Associates’ Healthcare Knowledge team. She is based in San Francisco.