The Tug of War for Talent:Big Pharma vs. Emerging Biotech

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Those who build great teams will be noticed for years to come.

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The Tug of War for Talent (TOW)

How many of you are currently from:

• Big pharma?• Small pharma?• Biotech?

• Other?

About Our Study

• Why: The changing dynamics of talent within the biopharmaceutical industry

• What we saw: A significant increase in the movementfrom traditional to emerging growth companies

• Datapoints: 30 interviews with C-level execs & Board members—industry leaders

• What we hoped to learn: If the TOW was real.Where is top talent headed? Successes and failures. Best practices to attract and retain leaders.

Our Discussion Topics

• Big pharma’s hold on top talent—is it real or perceived• Why emerging growth organizations hire from big pharma• What skills and experiences are acquired from big

pharma that cannot be obtained elsewhere• Why is big pharma losing best in class leaders to

emerging growth organizations• What are the same companies doing to hold on to

valuable leaders and top performers• The transformation of a big pharma leader into an

emerging growth candidate

Our Discussion Topics cont’d

• What is the actual risk of moving to a smaller organization• How can a candidate weigh his or her options• What qualifies as a “professional success” in

emerging growth companies• Personality & culture—one size does not fit all; the

importance of fit within the management team• Reward systems—how and why they differ in

big vs. small organizations

TOW: What We Learned

• Opportunity #1: To maximize value, it is critical for emerging companies to hire the best leaders

• Crucial for emerging companies: Attracting leaderswith the relational skills, breadth of experience and depth of expertise to navigate new challenges

• Opportunity #2: Big Pharma can capitalize on the shifting dynamics & re-capture the best talent in the industry

• Crucial for Big Pharma: Attracting, winning back, and retaining top talent

The “War” is really a talent exchange within the shifting dynamics of business.

Let’s Explore Our Takeaways

• Risk is Everywhere

• Risk is Relative• Skills Trump All…Or Do They?• Transition is Not Easy, Nor a Given• Personality & Culture: One Size Does Not Fit All

• The Risk/Reward Profile is Changing

• Top Talent Can Now Play Both Sides

Takeaway #1: Risk is Everywhere

Risk cannot be avoided nor accelerated by moving to a biotech. Risk is now part of the pharmaceutical industry equation. While uncomfortable, we believe that leaders must embrace it. Biotech execs get valuable firing line experience and broader exposure than in the silos of big pharma.

Our Leaders Comment on Risk

“How solid of a footing is really the question to address. Smaller biotechs are more of an opportunity than a risk. Usually top leaders have a portfolio or pedigree that allows them to come back to big pharma and remain

active in the industry.”

…Justin Ford, VP Global Human Resources, Bayer HealthCare

“If you’re not able to raise money or if your organization fails for any other reason, that can have a negative impact on the way future employers look at you.”

…Geert Cauwenberg, President & Founder, Phases I and II (formerly Founder & CEO of Barrier Therapeutics & Vice President at J&J)

Takeaway #2: Skills Trump All, Except…

Big pharma used to be the MBA of life sciences and invested significant resources in teaching solid functional skills. It was the ideal place to learn commercialization and global skills. While these are the most valuable skills sought by emerging growth companies, biotechs must assess if a big pharma exec can make the transition from a bureaucracy to a fast moving culture with a finite monthly burn rate.

Our Leaders Comment on Skills

“We actively hire from big pharma for the pedigree and training. It’s a proving ground and enables us to minimize the cycle time to get someone up to speed. For emerging growth companies, we also need to find the entrepreneurial spirit and that is not as easy to find. Attitude is equally important as aptitude.”…Al Altomari, Chairman, Agile Therapeutics (Former CEO, Barrier Therapeutics)

Takeaway #3: Top Talent Can Play Both Sides

Historically, big pharma attracted the best talent. This started to change when biotechs became successful at developing new drugs. With an infusion of capital, came the decree to hire top commercial talent and general management from big pharmaceutical companies.

With the successes of biotechs, more talented individuals joined their peers. Prior to our current credit crisis, this flight had been exacerbated by layoffs in big pharma. What we have today is the perfect storm/perfect opportunity for talented people to play both sides.

Our Leaders Comment on Top Talent’s Real M.O.

“Whether in biotech or big pharma, people are motivated to find solutions to medical problems. We consistently hear candidates from big pharma say they are tired of the big pharma bureaucracy, ready for a change, and feel they can have a greater impact in a smaller environment.”

…George Renton, Executive Director, Human Resources, Regeneron Pharmaceuticals, Inc.

“I left big pharma because of the specificity of the opportunity, moreso than jumping into a small cap adventure. Having made that leap, I could never go back.”

…Tom Miller, Former President, Chief Executive Officer & Board Director; President & Chief Operating Officer, Therabon Therapeutics

Takeaway #4: Transition is Not Easy, Nor a Given

Big pharma leaders often view emerging companies as easy or simple. They struggle to understand the difficulties in running a small organization. This is due, in part, to the skill specialization of large organizations. In emerging companies, you have to perform many roles simultaneously.

Big pharma does not teach you how to deal with venture capitalists and a highly engaged Board. Execs who jump from big pharma to emerging companies often feel lonely, and lacking in moral and resource support.

Our Leaders Comment on Transition

“When executives move to smaller organization they are often left on their own and that’s a big adjustment. They have to do more than just their job and are expected to perform in multiple areas simultaneously.”

…Mickey Flynn, Past President, PA Life Sciences Association

“One should not assume that small is less complex. You have to realize that some of the things you take for granted are not available. At a smaller organization, more of the focus is on cash and financing. Every dollar and the return on that dollar count.”

…Dr. Cameron Durrant, Chairman and CEO at KaloBios Pharmaceuticals, Inc.

Takeaway #5: Risk is Relative

Many leaders who left big pharma for emerging companies swear never to go back because of the bureaucracy and lack of decision-making impact. Those who consider making the jump ask a different question: How risky is it to stay where I am? They were seeking new challenges that developed new skills, abilities and perspectives.

Our Leaders Comment on the Mindset of Risk

“It’s hard to find people with an entrepreneurial sprit. They may fail if they are not ready to work in an environment where they need to make rapid decisions and frequent changes. The question is whether the mindset is consistent with what’s needed.”…Jerry Wisler, former President & CEO Aegerion Pharmaceuticals, Inc.

Takeaway #6: Personality & Culture: One Size Does Not Fit All

Big pharma in some ways replicated their long product development cycles in their talent development processes. With bigger organizations, bureaucracy and complexity increase. As the business environment changed, manybig pharma leaders were not equipped to act faster with fewer resources.

Big pharma needs to take some of the big out of organization. Pushing down responsibility, autonomyand decision making will improve talent development across the organization. If big pharma is successful inthis endeavor, then emerging growth companies must respond or they will risk losing their talent.

Our Leaders Comment on Cultural Fit

“Big pharma executives need to get out of their offices and away from their computers, blackberries and endless internal meetings.They should go offsite to meet with their peers at least once a week for two hours and talk about breakthrough thinking. Only then will they beable to move and act like their more nimble biotech counterparts.” …Sander Flaum, Managing Partner at Flaum Partners

Takeaway #7: The Risk/Reward Profile is Changing

In the Tug of War for Talent, both big pharma and emerging biotechs must consider not only the variety of incentives at their disposal, butalso a more holistic approach to talent andcareer development.

The talent development processes need tobetter incorporate managing career risk, developing broader skill sets, and expandingon the traditional career experiences.

Our Leaders Comment on Most Valued Rewards

“Big companies are starting to do a better job of acknowledging their top performers and allowingthem opportunities for getting more diverse exposure.”

…Charley Corace, Director Global Credo Survey, Johnson & Johnson

“By using the right kinds of human resource development techniques, such as putting people into the right position & sending them overseas to become stronger global leaders, big pharma can truly incentivize top leaders to stay.”

…Bernie Tyrrell, Chair and Assoc. Dean, Pharmaceutical Sciences Department, Massachusetts College of Pharmacy and Health Sciences

So, How to Attract and Keep Top Talent?

• Give top talent the “opportunity to make a difference”.While that statement might seem esoteric, every interviewee mentioned it as the #1 driver of their careers.

• If employers can get back to the essence of this, theywill keep top performers, attract newcomers, and evendraw back those who left. The how is less clear.

• Our leaders point to more autonomy and smaller working groups, more flexible and variable team and individual compensation, global exposure and interchange of ideas, external contacts and mentoring programs, and better leadership at the top.

Our Takeaways Revisted

• Risk is Everywhere

• Risk is Relative• Skills Trump All…Or Do They?• Transition is Not Easy, Nor a Given• Personality & Culture: One Size Does Not Fit All

• The Risk/Reward Profile is Changing

• Top Talent Can Now Play Both Sides

The Tug of War for Talent:Thank you for your

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