Where the bodies lie

Abstract

As members of a life sciences advisory and investment banking group, my partners and I have often noted that life sciences companies fall victim to the same mistakes and misconceptions, repeated again and again. These failures mostly hinge upon company management misunderstanding the fundamentals of market dynamics and failing to appreciate the importance of the exit—the sole event where company investors receive a return on their investment, either through an initial public offering (IPO) or a company sale. Unfortunately, the biotech industry's track record on exits is disappointing. According to the National Venture Capital Association (Washington, DC), between 2005 and 2014, only one in five US biotech and medical device companies achieved liquidity after six years. And from my perspective over the past 20 years, that low success rate does not appear to be improving. In the following article I share my perspective on common pitfalls for life sciences entrepreneurs. Going forward, I hope that these insights will help life sciences management teams increase their chances of success.