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Biotech on a Roll

"Biotech continued its steady improvement during the third quarter" reported Burrill and Company in its October 1st Press Release.  And it's not just biotech's "blue chip" companies says Burrill - there were a number of notable 'gainers' this last quarter.
 
While many believe 'the worst might be over', the general word is that investors remain cautious and companies need to be prepared for the effects of the recession to linger.
 
Translated to the people side of business, this means that although hiring and salary freezes may have been reversed, travel and training budgets, for example, remain limited. 

Watson Wyatt: Effect of the Economic Crisis on HR Programs

Thanks to Watson Wyatt for generously sharing their latest finding about how the economic crisis is impacting HR programs:

"More employers are planning to reverse pay freezes and reductions, as well as other cutbacks. However, employees are still facing lower raises, lower bonuses and higher health care costs. A majority of employers are now more concerned about retaining their top performers and critical-skill employees than they were before the economic crisis hit in September 2008 and are increasing their communication programs in order to keep employees engaged..."

Click here to read the full report.

Significant Change Predicted for Bioindustry

Interesting insights on the state of the life sciences industry in this month's Genetic Engineering & Biotechnology News:

"Despite the apparent turn of market fortunes more recently, by virtually any measure it would appear that the life science industry may be poised for a period of profound structural transformation. Declines in equity values and their implications paint a sobering picture for the future.

While off their March lows, equity values have dropped precipitously—the BTK is off 29.3% and the NBI is off 26.6% from their respective August 2008 highs. And while the decline from the highs has not been as pronounced as the drop in either the DJIA or NASDAQ, given that the biotech sector highs lagged these broader indices by 10 months, might the bottom possibly lag as well?"

Continue reading the full article here.

Holding on to top talent you can’t afford to lose

by Mary Ann Ireland, originally published May 19, 2009 on BayBio

We’re in the midst of a lot of change.  While executives are “Navigating the Storm” in these uncertain times, managers and individual contributors are also navigating their own storms – and all this is contributing to significant workplace change, ultimately affecting the bottom line.

According to a recent Society of Human Resource Management (SHRM) article, “The inability to adapt to workplace change can decrease employees’ level of engagement and effectiveness on the job as well as put organizational productivity at risk for many organizations.”

Just as companies are re-evaluating their pipelines and reducing burn rates, top performers are re-assessing their options, managing their finances, and adjusting their expectations as they plan for their future.  And some will leave.  These days, top talent wants more than attractive compensation - transparency and other “natural rewards” come high on their priority list.

What is Employee Engagement?

Rutgers University professor Richard Beatty recently sparked a heated debate with his CFO.com article, Memo to CFOs: Don't Trust HR, where he criticized the human resources profession for being mostly unable to talk the language of business and help companies build economic value. Since then, CFO.com has published a summary of rebuttals to the original article in Memo from HR: We Do Too Create Value.
One of Beatty's most contentious points is that employee engagement and job satisfaction don't necessarily impact financial returns. Beatty admits in the follow-up article that it's difficult to measure the impact of employee engagement because we lack a uniform definition of it and a common understanding of what drives it.
This month we're discussing some of these same issues in our May roundtable meetings - specifically, how to keep employees motivated during difficult times. BOLD members, please join us at a roundtable meeting or join the discussion online at the BOLD LinkedIn Group to share your thoughts on employee engagement.

BayBio2009: Industry Trends & Implications for HR

by Frank Spada, Published April 29, 2009

Given the impact of the current economic crisis on the life sciences industry, the BayBio 2009 conference was appropriately titled, “Navigating the Storm.”  Here is a summary of the key issues and trends presented at the conference:

Find creative ways to raise capital. Seek out non-dilutive financing alternatives and alliances: Government grants and contracts, private foundation contracts, corporate alliances, academia/industry alliances, and stimulus package funding via the NIH and California.

Preserve your human capital. Anticipate and plan ahead for potential crises and reductions. Retain and engage top talent. Tune-up compensation and performance systems to motivate employees and maintain morale.

Outsource. Beyond controlling cost, outsourcing has been embraced by executives and investors as a means to more efficiently and flexibly staff projects. Biotechs are turning to CROs across all disciplines – preclinical R&D, clinical development, manufacturing, and even HR – with the promise of de-risking and accelerating their drug development programs by engaging experts in their respective fields. Given the dismal state of the capital markets, emerging biotech companies must do more with less, on time, on budget, and right the first time. For all of these reasons, the next generation of biotech startups are turning to CROs and operating as virtual companies. These companies will remain much leaner than traditional fully integrated biopharmaceutical companies (FIBCO).

For overviews, reports and trends in the Life Sciences Industry, visit the following sites:

The Burrill Report -  http://www.burrillreport.com;  Sign up for the Burrill Weekly Brief by emailing your contact information to skirby@b-c.com

The Journal of Life Sciences:  http://www.tjols.com/

Fierce Biotech:  http://www.fiercebiotech.com/

The Biotechnology Indsutry Organization: http://www.bio.org/

BioWorld:  http://www.bioworld.com/

Life Sciences World:  http://www.lifesciencesworld.com/

Recent quotes:

“What we’re hearing is that 80% of the biotechs in the United States today, public and private, have less than a year’s worth of cash. That’s going to force massive consolidation.” - James A. Datin, VP and managing director, Safeguard Scientifics (http://www.pharmalive.com/extra/2009/jan09_biotechnology.cfm)

“Nearly one third of the small biotech pharma companies in the US are expected to go out of business within a year.” - Roger S Newton, CEO Esperion Therapeutics (http://economictimes.indiatimes.com/News/News_By_Industry/One_third_of_small_biotech_pharma_cos_in_US_to_loose_biz/articleshow/4071531.cms)

Did you see the December 2008 cover story of FAST COMPANY?   The title reads: Cisco Gets Radical and the subtitle is How CEO John Chambers is turning the Tech giant into a socialist enterprise.  What is he talking about?  Read the article.  What's the company's No.1 blog?  It's about collaboration. 

John Chambers is quoted as saying "some people need a command-and-control environment.....(but that's not the way of the future)....We now have a whole pool of talent who can lead these working groups, like mini CEO's and COO's.  We're growing ideas but we're growing people as well...where I might have had two potential successors, I now have 500." (p.134)

And they are scaling up, in a collaborative way.  "The global marketplace and the ubiquity of Web 2.0 tools demand a workforce empoowered to generate ideas, solve problems and contribute to the greater good without micromanagement." writes the author, Ellen McGirt (p.135)

Here's an excerpt from the Fast Company website:

Cisco's CEO John Chambers On How to Weather the Downturn
By Fast Company Staff
• "Focus on what we can influence, and not over- or underreact to things we cannot. It's a question of living in the world as it is, not the way we want it to be."

• Assess the damage externally -- vendors, customers, colleagues. "In 2001, we went to our customers in energy, manufacturing, and automotive, to name a few. We asked, 'How are you handling this?' "

• "Ask yourself, 'Is this a market-driven phenomenon or did we do it to ourselves?' " Based on the answers you get, formulate a response. "In 2001, our strategy was working extremely well before the downturn, and it seemed to be working from the customers' side, so we said it was 90-10. That turned out to be about right."

• Make a determination of how long this will last and how deep it is going to be. "Prepare yourself for it to be longer and deeper than you think. And then build flexibility to adjust quickly if you need to."

• Get ready for the upturn. "What's our vision for where this industry is going with or without us?" That, he says, is a five-year horizon. "What is our differentiated strategy within that vision?" That's a two- to four-year plan. "How are we going to execute in the next 12 to 18 months?"