Pitch dark? In funding bid, be open about challenges they'll find anyway: panel

BOSTON – Tweaks were made this year to the format of Biopharm America, which featured shorter, snappier sessions intended to stimulate exactly the kind of early partnering talks that the event is designed to foster.

But one thing stayed the same at the event that kicked off Tuesday, produced by the EBD Group and supported by the trade organization Massbio: the pitch contest, by now a tradition, run by Douglas MacDougall of MacDougall Biomedical Communications. In the game, audience members are given chances to make 30-second pitches – for financing, for collaborations – to a panel of would-be backers, who then rate the participants and pick a winner. The grand prize is a one-on-one meeting with a panelist of his or her choice, and thereby a shot at some real-world dealmaking.

MacDougall started by asking what's likely to make a pitch stick. Dennis Purcell, founder and senior advisor with Aisling Capital, recalled a meeting with John Crowley, then a stranger to Purcell and the CEO of Novazyme Pharmaceuticals Inc., of Oklahoma City.

Crowley "gave a pitch," he recalled. "It was OK, blah blah blah, and about halfway through there was a slide – he had two kids with this particular disease [that the company was working on], Pompe disease. It really changed the tenor of the meeting." In any such talk, "one or two things hook you in," he said. "All of us here see 600 or 700 of these [presentations] a year" and presenters need to bring compelling elements if they want to stand out.

Crowley "had never been a CEO before; he was a lawyer at [New York-based] Bristol-Myers Squibb Co.," Purcell noted. "But [this] was a family thing. It was unemotional, he just mentioned" his kids as part of the spiel. Backed by Purcell's firm, Crowley went on to build Novazyme and sell it to Genzyme Corp. in 2001 by way of an agreement worth as much as $225 million. Although not every fund-seeker will have such an emotional grab factor as Crowley's, pitch-crafters should narrow their slide decks to points that are most likely to command attention. Further questions can be asked later, and will be, he said. "In due diligence, we're going to find out what the problems are. We've all had our fair share of failures and we're used to it. What does keep you up at night? What should we be worried about?" He conceded that "you can't cram everything into 30 minutes. The whole point of the first meeting is to get a second meeting." (See BioWorld Today, Aug. 8, 2001.)

Rick Jones, director of Broadview Ventures, urged deal-seekers to "be prepared for a conversation that could go any number of different directions. One of the biggest turn-offs is when the presentation is so focused on one point that they want to spend 45 minutes going into extreme detail about an area of science that maybe you could know in the first 10 minutes whether it's interesting or not, and they don't want to talk at all about some of the other issues in the company. The other extreme is when they come in and [say] it's the greatest thing since sliced bread, but they don't want to talk about any of the details because it's all protected and you have to go under a confidential disclosure agreement."

Jones added that the annual J.P. Morgan Healthcare Conference in San Francisco, long ballyhooed as the best meeting for such interactions, is "a terrible place to meet with investors. It is so crowded and so busy, and whoever you've met with leaves with 100,000 cards in their pocket. It takes forever to get back to them. Much better to try and meet in a place like [Biopharm America] or outside of those conferences. We spend most of our time at J.P. Morgan meeting with other investors, and what we're trying to do is look for people who either have leads on companies that we might be interested in – maybe too early for [the other potential backers] – or we're trying to raise money for companies that are in our portfolio. I also think there should be a populist uprising against J.P. Morgan, just for the outrageous hotel rates that are being charged."

Sam Hall, principal with Apple Tree Partners, said his firm regards the J.P. Morgan meeting as ineffective, too. "Speed-dating interactions can be unsatisfying there," he said.

Tying for first place in the MacDougall pitch contest were Shelley Hartman, CEO of Miami-based Aegle Therapeutics Inc., which isolates and purifies extracellular vesicles (including exosomes) for burns and pressure wounds, and Michael Winlo, CEO of Nedlands, Australia-based Linear Clinical Research Ltd., which specializes in the early clinical trials for first-in-human to phase II experiments. A two-minute match was held to resolve the tie, won by Winlo.

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