Andrew Zorn on LinkedIn: The "skin in the game" line is a facade insurance companies hide behind… (2024)

How do you set valuation of your early stage Biotech company ? Great question and most biotech founders struggle with this. Often times VCs and partners will ask you what you think your company is valuation is during early stages. How do you come up with this? After all, they have the models and comps and will likely set terms regardless. If you're a single asset company, an NPV or similar model could work. But you have to predict drug prices and take into account market up take rates and payers/ insurance and all sorts of factors. Can be really hard for an early founder or CEO.If you're a commercial life science or biotech product, service or software, should be easier to do an NPV or look at IRR and get a pretty good idea. Again can feel like a big task and challenge to come up with a valuation others will agree with. Hardest may be the platform. Probably only way to set this is using comps but that can be so difficult with the variation in the type of platforms that exist. Also, the market has shifted so dramatically over the past couple of years and valuations have dropped, so picking the right comps can be a hurdle. Either way, this is challenging and it can feel overwhelming knowing the valuation of your company you set can dictate the future and overall direction. Talk to as many people as you can! Be confident in your valuation by knowing your value of your product(s) but be willing to take advice and adjust. #EarlyStageCompany #VentureCreation #Biotech #Biopharma #DrugDiscovery #Therapeutics #LifeScience #Valuations #NPV #DCF #FinancialModeling

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Ask for money when you want advice and ask for advice when you want money...Great adage in biotech VC.The hardest thing to do is filter advice when it's coming from every direction. It can be distracting and cause you to detract from the important value inflection points. Seek advice in all biotech and scientific endeavors but filter it through a lens that focuses on your problem and solution. Don't be everything to everyone. You'll end up being nothing to no one. #Biotech #DiseaseResearch #Commercialization #Therapeutics

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Want to be successful in Biotech ? Make fast decisions! That means be decisive and quick. I was listening to a great panel this week at MassVentures #MALSI day and this reminder rose to the surface for me.To me this resonates for any stage biotech. Early stage, growth stage and mature. It holds true for commercial biotech / life sciences as much as therapeutics and drug discovery. At every level. If you're a scientist, Business Development professional, leader, CEO, doesn't matter. Be decisive. If you're not it will cost you time, money, deals, and so on. This industry moves at such a rapid pace. Good intuition based on your experience will guide your quick decision making. It's ok to fail but fail quick. Move on to the next experiment, deal, customer, molecule, concept, business model, whatever it is.Success will come but keep moving quickly towards it !

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The biggest smallest industry... For anyone who's been in Biotech / Pharma for any amount of time knows just how big our industry is. It is global with hundreds of thousands to millions of people directly connected to the industry. Fighting to bring very difficult but essential therapies to the clinic for patients in need. But you also know how "small" it is. Everyone seems to know everyone or have only a degree or two of separation. It's amazing how much of a community there is in this industry. It's impressive this industry is able to have that type of network. But we can do even better. Communication is key in the sciences as it moves so rapidly. We sometimes forget to communicate the progress. The successes and the failures. The small and the big. The earlier the better!Be a voice for science, research, therapeutics, commercialization, investing, regulatory, drug discovery, life sciences, technology, preclinical, clinical and every discipline within. Let's talks biotech and pharma. Let's talk early stage biotech!#biotech #pharma #drugdiscovery #venturecapital #lifescience #preclinical #clinical #diseaseresearch #Therapeutics

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People aren't taking chemo drugs or cystic fibrosis drugs or anything of that sort for fun. Why are we paying for health insurance if they don't cover medicines that are essential for health.

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AI has yet to produce a drug.. Meaning, to my knowledge, generative AI has yet to de novo produce a drug that made it to the clinic. This is because AI and ML are tools. They have some predictive power and some generative abilities. But to think AI could pick a target, match correctly to disease and then iterate a perfect molecule or modality completely in silico is hard to imagine. Each step of the drug discovery process is riddle with landmines. It's immensely complicated. And the data we have is fragmented and incomplete meaning it would be difficult for AI to be able to accurately generate a drug completely de novo. That said, drugs have been brought to the clinic using AI... as tools. We need to be cautious how we discuss this topic and build on it. We have been stacking tools, technology and innovation for decades in the biotech field and it has led to exquisite breakthroughs. AI/ML are more of those tools. It is not a silver bullet.#AI #ML #biotech #biopharma #drugdiscovery #smallmolecule

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The partners you choose could be the determinate of success...We already established the team is the most important aspect to success both in terms of driving beyond internal value inflection points but also how venture capital values your company. But your early team is likely small and still somewhat limited in expertise. You can't possibly have a CEO, CSO, CFO, CBO, CDO, General Counsel, Cheif of Staff, and so on. So, the external partners you choose are crucial. They should feel like and act like extensions of your team. If they haven't bought into your vision, it will end up being a transactional relationship at best. Find those early partners who share your mission, vision and even business model. Find a way to have shared success and shared risk. These will be your external partners that become family to the company. In the early stages of biotech, you need help. Just be sure to pick the right help and find a way to make it a mutually beneficial relationship. #Biotech #Startup #StrategicPartners #Pharma #VentureCapital #Derisk #BusinessDevelopment #DrugDiscovery

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Better for early stage biotech / biopharma to focus on strategic big pharma partnerships over VC? There was a lot of deals happening with big pharma in H1 2024. Big pharma seemed to be stepping in when VC wasn't deploying capital at the same rate they had been for the last decade. Big pharma knew they could get some better deals as valuations were forced to come down. This is not undervaluing the acquisition target by any means. Valuations were far too high for too long and unsustainable. The correction needed to occur within the market. Now certain things look like "deals" when they are really what the market can sustain longterm. Additionally, there are a lot of patents held by big pharma expiring in the next 7 years. Pharma wants to stay ahead of their patent expirations. They know it will still take many years to reach the clinic with some of these early to mid stage companies through these acquisitions and partnerships. Bring these innovations in and help drive development toward the clinic. Huge value for both sides of the table. There is also a ton of innovation occurring at a rapid pace. Far too much for even the largest, most nimble pharma company to keep up with. It is smarter for them to allow these super focused biotech / biopharma companies continue to innovate within their domain and bring them in at the right time. It does also help many of these big pharma companies are flushed with cash as many have continued to grow profits considerably over the past decade. They can afford to take some bets. I think early stage companies would be remiss not to prioritize strategic partnerships with big pharma. When bandwidth is limited, may even be worth prioritizing over efforts to secure VC money. Let innovation continue ! Thanks for posting this, Daniel Neumeier, PhD .

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Great to see the biotech industry recovering including a string of FDA approvals, IPO's and M&A activity. As for venture capital deployment, a lot of it is going to existing investment or later stage ventures and assets. The market for early stage ventures may lag a bit behind until firms can can ensure returns on their portfolio through more de-risked and follow on investments. All in all, very positive and what occurred was likely a necessary correction to ensure we had the right investors, concepts/ ideas / ventures and founders leading innovation in the biotech industry; and not just people without domain expertise who were being more opportunistic more than anything. #VentureCapital #Biotech #EarlyStageVentures #Innovation

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