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Healthcare Career Strategies: 1999 L&BD Executive Survey Defined Health L&BD “Add-on” Objectives Survey industry compensation norms and ranges for healthcare L&BD Executives Assess job satisfaction and the implication for Career Development

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healthcare career strategies
Healthcare Career Strategies:
  • 1999 L&BD Executive Survey
  • Defined Health L&BD “Add-on”
objectives
Objectives
  • Survey industry compensation norms and ranges for healthcare L&BD Executives
  • Assess job satisfaction and the implication for Career Development
  • Explore the potential impact of external forces (e.g., consolidations and financing) on careers in L&BD
agenda
Agenda

I. Introduction; Respondent Data

II. Compensation

By Pharma vs. Biotech

By Position

By Gender

Comparison to Prior Years

III. State of Mind

Job Satisfaction

Career Plans

Impact of Significant Industry Trends

organizers
Organizers
  • Gayle Mills, Eos Biotechnology
  • Arlene Morris, Coulter Pharma
  • Ed Saltzman, Defined Health
special recognition
Special Recognition
  • Defined Health
    • Ginny Llobell
    • Deborah Lunn
  • Respondents (You know who you are!)
    • L&BD Survey
    • DH Qualitative Analysis
response to survey
Response to Survey

# of responses =170

(156 analyzed)

sample by title
Sample: By Title

Title % of Respondents

President/CEO/COO 7%

Exec./Sr. VP 7%

Vice President 25%

Director/Exec. Director 42%

Asst./Assoc. Director 4%

Manager 11%

Counsel 4%

Most are Corporate Development, Business Development, Licensing

sample by gender
Sample: By Gender

You guys always seem

to outweigh us

sample by education
Sample: By Education

“Most of the people at biotech are scientists, you don’t necessarily need another scientist.”

“The importance of science is probably overemphasized. I know some great dealmakers that have no science background.”

  • > 50% have a graduate science and/or business degree
  • Business degrees slightly more common than science
  • Business degrees slightly more frequent in Biotech than Pharma
sample years in current position
Sample: Years in Current Position

“I try very hard to make my job very interesting so someone else will want it. This is the best way to find your replacement. My plan is to move around big pharma, or make internal progress within big pharma.”

compensation drivers
Compensation: Drivers?

Doing deals is an imperative for both sides

compensation drivers13
Compensation Drivers
  • L&BD isHOT, HOT, HOT!
  • Doing deals is an imperative for both sides
      • “it’s one of the few ways out of woods. We can’t raise prices any more and our discovery engines will only get us so far.”[Paraphrased from DH interviews.]
      • “Everyone does business together now, nobody operates alone, and you need to do deals to survive.”
  • Headhunters are calling ; 40% of cos. are 1 person “short”
  • Tremendous job security being in L&BD
compensation conclusions 1
Compensation Conclusions(1)
  • Salary: Pharma  Biotech
  • Cash Bonus : Pharma > Biotech

“Pharma is a high paying industry.”

“Anything I see as a threat to my wealth-building capability will send me out the door.”

More Pharma Execs making $125-175K;

More Biotechs making >$175K

compensation conclusions 115
Compensation Conclusions(1)
  • Stock Options: Biotech > Pharma

90% of Biotech L&BD execs get options

< 75% of Pharma L&BD execs get options

slide16

Base Salary

% of Respondents

cash bonus
Cash Bonus

% of Respondents

% of Base Salary

compensation conclusions 2
Compensation Conclusions (2)
  • Salary by Position:

Managers Directors VPs Top Dogs

The “$100K+” Manager

1997: 85% < $100k

1999: 45% < $100k

The VPs really get the spoils -- (vs. 1996)

3x more likely to be in “$175K+ Club”

base salary managers
Base Salary: Managers

Managers

(n=19)

% of Respondents

slide21

Total Expected Compensation: Managers

Managers

(n=19)

% of Respondents

slide22

Director Compensation...

“His peak earning years came and went without a ripple.”

base salary directors
Base Salary: Directors

Directors

(n=78)

% of Respondents

3% of respondents $175,000 - $199,999

total expected compensation directors
Total Expected Compensation: Directors

Directors

(n=78)

% of Respondents

slide25

Base Salary: VPs

Vice

Presidents

(n=53)

% of Respondents

slide26

Total Expected Compensation: VPs

Vice

Presidents

(n=53)

% of Respondents

slide27

Base Salary: Top Dogs

Top Dogs*

(n=11)

% of Respondents

*President, CEO/COO, CFO

slide28

Total Expected Compensation: Top Dogs

Top Dogs*

(n=11)

% of Respondents

*President, CEO/COO, CFO

compensation conclusions 3
Compensation Conclusions (3)
  • Salary By Gender

Glass Ceiling is Shaking But Not Breaking!

    • Greater percentage of women vs. men with base salary >$175 - $200K, but…
    • Women are 3-5x more likely vs. men to earn

< $100K.

    • Twice as many men as women earn > $200K
base salary by gender
Base Salary by Gender

% Respondents

so are we happy
So, Are We Happy????
  • Biotech Execsprofess to be happierthan their Pharma counterparts - especially with regard to:

- Role of BD in company

- How company does deal

- Career path

“Pharma makes decisions more slowly, by committee. It isn’t a decision-making role, it’s facilitating. The role of BD for biotechs is much more important. You look to BD to bring in $ as you look to financing to bring in $.”

so are we happy33
So, Are We Happy????
  • Biotech & Pharma L&BD execs have equal levels of “satisfaction” with their compensation -- about a 2.5 on a scale of 1-5.
  • Most are secure in their prospects for the future.

“There is tremendous job security in being the head of business development. Every start-up has to fill this role. Everyone does business together now, nobody operates alone, and you need to do deals to survive. Even when biotechs go through massive layoffs, BD is the last to go.”

so what are we bitching about and how many worlds apart are we
So, What Are We Bitching About?(and how many worlds apart are we?)

Principal Factors Making

Job Most Difficult PharmaBiotech

Internal Politics 62% 29%

Lack of Budget for Doing Deals 39% 22%

Risk Avoidance of Company 44% 10%

Unrealistic Expectations of Co 25% 16%

Lack of Products 29% 45%

Lack of Experience of Others in Co 32% 41%

Unrealistic Expectations of Boss 15% 33%

Lack of Training of Others in Co 20%28%

Inexperience of Potential Partner12%23%

slide36

And, What Are We Going to Do About It?

  • 55% Plan To Stay With Present Company, and move to another position in...

Marketing

& Sales

16% Pharma

4% Biotech

Operations

15% Pharma

28% Biotech

L&BD

(Higher Level)

47% Pharma

48% Biotech

where are we going
Where are we going?

Interestingly, though, nobody wants to jump the fence…

<10% of Pharma or Biotech L&BD execs would consider a move to the other side

“Pharma makes decisions slower, by committee. It isn’t a decision-making role, it’s facilitating.”

“Biotech is squirrely. They’re always begging for money.”

“Biotech companies are exciting and challenging, and there are lots to pick from.”

“There’s a certain age by which you need to make the move from pharma to biotech. Beyond it, you might not make it.”

and what are we going to do about it
And, What Are We Going to Do About It?
  • 45% Plan To Hit The Road Within 2 Yrs

Biotech 54%

Pharma 36%

Trigger

Event

PharmaBiotech

Lack of advancement 25% Lack of advancement 20%

Internal politics 21% Merger 20%

Merger 18% Co. may run out of cash 16%

Inadequate comp. 14% Inadequate comp. 15%

Lack of deal funding 11% Internal politics 11%

slide39

Speaking of Lack of Advancement..

“At what hour tomorrow do wish to resume your humdrum existence.”

so where are we not headed
So, Where Are We (NOT) Headed?
  • Not to the Beach or Golf Course!
    • <10% of L&BD execs plan to retire within 5 years
  • Not to the Consulting Ranks (Yeah!)
    • <5% of L&BD execs will start their own business or hang out a shingle

“Japan would be OK, but Pakistan is out at this point.”

“My goal is to become CEO of a biotech company.”

denial anyone
Denial, anyone?
  • Mergers?
  • Acquisitions?
  • Wall Street 20% growth per annum expectations?
  • Dearth of late stage product opportunities?
  • Trouble securing biotech financing?
denial anyone44
Denial, anyone?
  • Nearly 80% of L&BD execs believe there is a medium-high chance that their companies will remain independent over the next 3 years.
    • But, 32% of biotechs believe there is a medium-high chancetheir companies will run out of $ within the next 3 years
    • “Biotechs merging out of desperation will create a bigger, more desperate company”
  • >50% of Biotech execs expect their companies to launch a product within 3 years.
where are we going45
Where are we going?

Ex-Healthcare? Less than 1%, would leave healthcare for another industry

But, not because they’re ill-equipped…

“[Healthcare is] more exciting than the latest Internet play, and it isn’t quickly obsoleted in 6 months.”

“Dealmaking in biotech is more complicated than in other industries. The product is a “hope and a dream.” The business itself is more complex, there a longer time frames and heavy science, R&D and legal and regulatory issues to contend with.”

“Moving to another industry would be like a cakewalk”

observations
Observations
  • Smarter people are sitting on both sides of the table (and both sides need smarter people…)
      • “The people sitting across the desk from us are getting as smart as we are -- they realize the value of the assets they have.”
      • “Why do you think these deals have gotten so expensive?!!”
observations47
Observations
  • There’s plenty of room in biotech!
    • 1400 biotech cos w/1-2 L&BD staff
    • L&BD is “FILO” - first-in, last-out
  • vs. Pharma - how many L&BD execs can Pharma companies absorb…
      • “my job is to bring in late stage opportunities. There’s a chance, that if I do a good job, I’ll be out of one.”
      • “in the event of a hostile takeover, there would likely be 1-1 redundancies…”
tools of the trade in or out of healthcare what makes a good l bd person
Tools of the Trade in or Out of Healthcare - What makes a good L&BD Person

Track Record; Success

Intelligence

Ability to get the Job done

Creativity to bridge the gap and solve problems

Good Tools, and critical judgment to know you have them

Great interpersonal skills, the ability to articulate and make people feel comfortable

Power of persuasion and diplomacy

advanced degrees
Advanced Degrees

Graduate Degree Earned

satisfaction with
Satisfaction With….

Activity Pharma Biotech

Job 2.29 2.19

Boss 2.48 2.34

Compensation 2.51 2.46

Role of BD in Company 2.51 2.12

How Company Does Deal 3.02 2.72

Own Role in Doing Deal 2.28 2.13

Being in L&BD 1.791.79

Career Path at Compa ny2.642.32

1 = highest