Kate Bingham is one of the pre-eminent life sciences venture capitalists in the UK. In addition to her role as a Managing Partner at SV Life Sciences, she sits on numerous advisory boards such as the Wellcome Trust Technology Transfer Strategy Panel. Kate read for a Biochemistry degree at Oxford University before undertaking an MBA at Harvard as a Kennedy scholar. Prior to joining SV Life Sciences, she spent time as a Strategy Consultant for Monitor and has worked in business development at Vertex Pharmaceuticals.
Can you tell me about your early career decisions? Why did you move into the Venture Capital sector?
After my Biochemistry degree I worked as a Strategy Consultant at Monitor Company. This was a great learning tool and provided me with solid experience which I have subsequently been able to draw on. The plan was always to use my consulting experience as a training period. I then did an MBA at Harvard before starting at Vertex Pharmaceuticals in Business Development. Whilst at Vertex I got headhunted into Venture Capital and entered the profession quite out of the blue – not particularly useful for readers with similar aspirations, I’m afraid!
What kind of tasks is a Venture Capitalist involved in on a regular basis?
Well, there are a number of tasks and responsibilities that I might be engaged in on an average day. Every three to four years we are involved in generating new funds. In between those times, we need to ensure that we are keeping investors interested and expectation management is an essential part of what we do. Besides generating new funds, we also search for new investment opportunities and therefore need to keep on top of what is happening in the life sciences sector. We spend a considerable amount of time working on the investments that we make and then, of course, the final step is to make a successful sale. With all of the different elements of the job we have close contact with a number of individuals, such as the investor assessment manager (affiliated professionals who manage additional private funds), the people who buy our companies and of course, with entrepreneurs. All of the partners and investors at SV Life Sciences have had a career in discovery and development; it is clearly easier to teach someone how to do a deal rather than the background of biotech innovations!
What is it about your job that excites you most?
Excitement arises when we move into a new area. There might be a need for a new approach and yet we have a limited amount of data to use. Will we be able to make it work? The whole sector is extremely fast moving. I am also interested in the science behind the business and the effect that a product might have on patients’ lives. For example, our portfolio includes a company focusing on potassium channel inhibitors for hearing loss. Until now, there has been no treatment for such a condition; hearing aids have limited capabilities and can overload the user with background noise.
How do you go about differentiating promising start-ups from those that are less likely to succeed?
There are a number of things that we consider: novelty of the science, whether the market opportunity is present, and the competitor profile. Additionally, we take into account whether there is scope for a strong intellectual property application and if there is a sensible timeframe in which we can receive feedback on the clinical efficacy of a product. We also carefully consider whether the company has the right people to enable it to do the job and be successful. Negatives such as ill-defined products or too many people make us think twice about the opportunity on the table.
Have you encountered any major challenges during your career and if so how did you approach such hurdles?
Yes, there have been a number of challenges, especially when companies fail. For example, there is a difference between the UK and the US with regards to trading insolvency. In the US you can trade until your very last cent, irrespective of debt, whilst in the UK you have to stop trading once your capital has reached your level of debt. In such a situation, the importance of managing expectations from the offset is paramount.
In a recent letter to The Guardian you wrote about a shift in the pharmaceutical industry which has led to a much higher rate of biotech acquisition and a decrease in in-house R&D. In your opinion does this shift in the sector have any negative connotations?
There are no real negatives with this relationship. Biotech companies, which are comparably smaller, have greater capabilities with regard to decision making. This increases efficiency as well as the potential for creativity. A direct analogy with how the film industry operates can be made; large corporations, such as Warner Bros., get ideas from smaller producers who pitch to the corporations. They in turn provide the required capabilities, marketing and distribution.
What advice would you have for Biochemistry grad students and finalists who are unsure as to their future career path?
If you want to get involved in the development of new drugs, then there is no substitute for experience. When selecting and applying for positions, you obviously need to ensure that you will be well funded and that you have done a lot of research on the company and the employer. Make sure that it is possible to make a meaningful contribution within the available timescale of the project or role that you are applying for. It is always a good idea to do a post-doc with an entrepreneurial professor. Prof Steve Jackson at Cambridge University, for example, is known to allow interested scientists to get involved in his spin-out companies.
What does the future have in store for the biotech sector? What are the major challenges that it will face?
I believe that the practice of small biotech companies feeding into big pharma companies will continue and that this symbiotic relationship will keep getting stronger. Individual pharma companies will need to find a happy balance between internal and external R&D. Pharma now buys companies in a different way, in that they are paying less upfront but have a structure for longer term returns. This influences the interaction between the different people involved. In general, I think that academics with greater flexibility will prosper most through the resulting spin-outs.
Oxbridge Biotech Roundtable would like to thank Kate Bingham for this opportunity and fascinating insight.