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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 l.jpg
Healthcare Career Strategies:

  • 1999 L&BD Executive Survey

  • Defined Health L&BD “Add-on”


Objectives l.jpg
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 l.jpg
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 l.jpg
Organizers

  • Gayle Mills, Eos Biotechnology

  • Arlene Morris, Coulter Pharma

  • Ed Saltzman, Defined Health


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Special Recognition

  • Defined Health

    • Ginny Llobell

    • Deborah Lunn

  • Respondents (You know who you are!)

    • L&BD Survey

    • DH Qualitative Analysis


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Response to Survey

# of responses =170

(156 analyzed)


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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 l.jpg
Sample: By Gender

You guys always seem

to outweigh us


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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 l.jpg
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 l.jpg
Compensation: Drivers?

Doing deals is an imperative for both sides


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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 l.jpg
    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 l.jpg
    Compensation Conclusions(1)

    • Stock Options: Biotech > Pharma

    90% of Biotech L&BD execs get options

    < 75% of Pharma L&BD execs get options


    Slide16 l.jpg

    Base Salary

    % of Respondents


    Cash bonus l.jpg
    Cash Bonus

    % of Respondents

    % of Base Salary



    Compensation conclusions 2 l.jpg
    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 l.jpg
    Base Salary: Managers

    Managers

    (n=19)

    % of Respondents


    Slide21 l.jpg

    Total Expected Compensation: Managers

    Managers

    (n=19)

    % of Respondents


    Slide22 l.jpg

    Director Compensation...

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


    Base salary directors l.jpg
    Base Salary: Directors

    Directors

    (n=78)

    % of Respondents

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


    Total expected compensation directors l.jpg
    Total Expected Compensation: Directors

    Directors

    (n=78)

    % of Respondents


    Slide25 l.jpg

    Base Salary: VPs

    Vice

    Presidents

    (n=53)

    % of Respondents


    Slide26 l.jpg

    Total Expected Compensation: VPs

    Vice

    Presidents

    (n=53)

    % of Respondents


    Slide27 l.jpg

    Base Salary: Top Dogs

    Top Dogs*

    (n=11)

    % of Respondents

    *President, CEO/COO, CFO


    Slide28 l.jpg

    Total Expected Compensation: Top Dogs

    Top Dogs*

    (n=11)

    % of Respondents

    *President, CEO/COO, CFO


    Compensation conclusions 3 l.jpg
    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 l.jpg
    Base Salary by Gender

    % Respondents


    Total expected compensation by gender l.jpg
    Total Expected Compensation by Gender

    % Respondents


    So are we happy l.jpg
    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 l.jpg
    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 l.jpg
    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 l.jpg

    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 l.jpg
    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 l.jpg
    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 l.jpg

    Speaking of Lack of Advancement..

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


    So where are we not headed l.jpg
    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 l.jpg
    Denial, anyone?

    • Mergers?

    • Acquisitions?

    • Wall Street 20% growth per annum expectations?

    • Dearth of late stage product opportunities?

    • Trouble securing biotech financing?




    Denial anyone44 l.jpg
    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 l.jpg
    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 l.jpg
    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 l.jpg
    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 l.jpg
    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 l.jpg
    Advanced Degrees good L&BD Person

    Graduate Degree Earned


    Satisfaction with l.jpg
    Satisfaction With…. good L&BD Person

    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


    Total compensation by company headquarters l.jpg
    Total Compensation by good L&BD PersonCompany Headquarters

    % Respondents