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Allan Marchington, Ph.D., Partner, Apposite Capital, London, UK.

A lunch with a venture capitalist colleague was the catalyst that led to Allan Marchington becoming a founding partner of Apposite Capital, a US$200 million global fund investing in health care. As a previous CEO with extensive experience in the biopharma industry, a range of options were open to him, but it became clear then that the venture capital field offered the best fit.

“I love working in an industry that is able to make a difference to people by saving lives. This, combined with my own enjoyment of doing deals, working with talented entrepreneurs, and my fascination of how different types of business models can generate value, means that venture capital is a field that I really enjoy,” says Marchington.

Following a Ph.D. in chemistry at the University of Liverpool, UK, Marchington began his industry career as a chemist at Pfizer in Sandwich, UK. He then founded a company in 1997, Cambridge Combinatorial, harnessing combinatorial chemistry technology, which he grew successfully until it was sold to Millennium Pharmaceuticals in 2000. “I had considered moving into the venture world at that time,” recalls Marchington. “But I wanted to get hands-on experience of working in biotech in the US and so moved to Boston with Millennium.” On his return to the UK, he re-evaluated becoming a venture capitalist, leading him to his current position.

As the partner in charge of life sciences, his current role has four components: sourcing new opportunities, making investments, helping to build the business, and exiting those investments through a trade sale or an initial public offering (IPO). “I really enjoy mentoring and working with people, and having been a CEO, I appreciate what the management team of the portfolio companies are going through. In addition, I enjoy new science, and so the ability to see such a broad array of new investment opportunities is phenomenal,” says Marchington.

For those opportunities that make the grade, due diligence and negotiation follows before an investment is made. “That is when the real hard work starts — we like to lead deals as we are keen to help out as much as we can,” he says. Here, his experiences of building a business and operating at the board level at Millennium can be valuable for a small biotech board at both a strategic and an operating level.

Other personal experiences during his career are reflected in his tips for success in the biopharma business. “When I left Pfizer to set up a company I was told that I was mad, but 3 years later I sold my company for a 20-times multiple. So my advice to anyone is to do the reality check on your plan, but if you still believe in it and you are passionate, go for it,” says Marchington. “During the building of my company, we had some great times and some difficult times, but the team was always there with me. I put this down to several things — first, I only hired the best people, and second I always tried to ensure that we enjoyed ourselves as a team. Last, I was always open and honest with the team about the company's financial situation,” he says. “With that open honesty came a bond and a trust, which helped us weather the difficult times and build for success.”

Stefan Ryser, Ph.D., Managing Partner, Bear Stearns Health Innoventures, New York, USA.

At Hoffmann-La Roche in the early 1990s, Stefan Ryser led an effort to assess the impact of emerging technologies for pharmaceutical R&D, which resulted in strategic research alliances with various biotech companies. This experience was the starting point for him to make the transition from industry to venture capital, where he is now a managing partner of Bear Stearns Health Innoventures (BSHI), a $212.5 million biotech venture capital fund based in New York.

“At Roche, I had the opportunity to be directly involved in the negotiations of some of the alliances, which had one thing in common: the equity investments in the strategic partner companies were very successful,” recalls Ryser. “I had a great mentor, my current BSHI partner Jürgen Drews — at that time head of global R&D — who taught me innovation strategies, and the privilege to work with many experienced colleagues, including another current BSHI partner Elizabeth Czerepak, who led the business part of the technology analyses and the negotiations, and also the equity investments.”

Another outcome of Ryser's work with Drews on the R&D environment was the watershed publication: “Innovation Deficit in the Pharmaceutical Industry” (Drug. Inf. J. 30, 97–107; 1996), in which they forecasted the decline in the market introduction of new molecular entities by the pharmaceutical industry. With biotech being identified as key to counteracting this downturn, Drews, Fritz Buehler, and Ryser left Roche to found a Switzerland-based $70 million venture capital biotech fund in 1998, with Czerepak as a silent partner. The fund was highly successful, with seven IPOs in 2000, and the four then went on to found BSHI in 2000.

Now, as a partner at BSHI, Ryser's role includes every aspect of venture capital, ranging from evaluating potential investments to exit decisions, as well as continuous assessment of the status of innovation in disease areas of interest. This is an aspect that Ryser enjoys. “I find one of the most rewarding aspects to be at the forefront of innovation in drug discovery and development, which allows us to apply rigorous decision criteria in a similar way that a big pharma R&D organization would apply them,” he says. “A great aspect of our work, and also truly rewarding, is when patients get successfully treated with an experimental drug from a portfolio company.”

To reach these goals, Ryser thinks that a key factor will be improving biotech's ability to meet the challenges of late-stage clinical trials and regulatory requirements — for example, through further partnering with pharma. “We must also repeat the reasons for biotech's early success: science-driven, top-notch research programmes were regularly vetted by science-driven management teams, advisory boards and boards of directors.”

For those considering venture capital as a career, Ryser also emphasizes the importance of the people you work with. “Consider a career only in a team of people who can be fully trusted and have mutual respect for each other,” he says. “And whatever your original expertise is, expand from there and develop a passion for all aspects of the business.”