Healthcare Career Strategies:

1
Healthcare Career Strategies

• 1999 LBD Executive Survey
• Defined Health LBD Add-on

2
Objectives

• Survey industry compensation norms and ranges for
  healthcare LBD Executives
• Assess job satisfaction and the implication for
  Career Development
• Explore the potential impact of external forces
  (e.g., consolidations and financing) on careers
  in LBD

3
Agenda

• I. Introduction Respondent Data
• II. Compensation
• By Pharma vs. Biotech
• By Position
• By Gender
• Comparison to Prior Years
• III. State of Mind
• Job Satisfaction
• Career Plans
• Impact of Significant Industry Trends

4
Organizers

• Gayle Mills, Eos Biotechnology
• Arlene Morris, Coulter Pharma
• Ed Saltzman, Defined Health

5
Special Recognition

• Defined Health
• Ginny Llobell
• Deborah Lunn
• Respondents (You know who you are!)
• LBD Survey
• DH Qualitative Analysis

6
Response to Survey
of responses 170 (156 analyzed)
7
Sample By Title

• Title of Respondents
• President/CEO/COO 7
• Exec./Sr. VP 7
• Vice President 25
• Director/Exec. Director 42
• Asst./Assoc. Director 4
• Manager 11
• Counsel 4

Most are Corporate Development, Business
Development, Licensing
8
Sample By Industry and Geography
n 170
9
Sample By Gender
You guys always seem to outweigh us
10
Sample By Education
Most of the people at biotech are scientists,
you dont necessarily need another
scientist. The importance of science is
probably overemphasized. I know some great
dealmakers that have no science background.

• 50 have a graduate science and/or business
  degree
• Business degrees slightly more common than
  science
• Business degrees slightly more frequent in
  Biotech than Pharma

11
Sample Years in Current Position
I try very hard to make my job very interesting
so someone else will want it. This is the best
way to find your replacement. My plan is to move
around big pharma, or make internal progress
within big pharma.
12
Compensation Drivers?
Doing deals is an imperative for both sides
13
Compensation Drivers

• LBD is HOT, HOT, HOT!
• Doing deals is an imperative for both sides
• its one of the few ways out of woods. We cant
  raise prices any more and our discovery engines
  will only get us so far. Paraphrased from DH
  interviews.
• Everyone does business together now, nobody
  operates alone, and you need to do deals to
  survive.
• Headhunters are calling 40 of cos. are 1
  person short
• Tremendous job security being in LBD

14
Compensation Conclusions (1)

• Salary Pharma ? Biotech
• Cash Bonus Pharma Biotech
• Pharma is a high paying industry.
• Anything I see as a threat to my wealth-building
  capability will send me out the door.

More Pharma Execs making 125-175K More
Biotechs making 175K
15
Compensation Conclusions (1)

• Stock Options Biotech Pharma

90 of Biotech LBD execs get options

16
Base Salary
of Respondents
17
Cash Bonus
of Respondents
of Base Salary
18
Total Expected Compensation - All
of Respondents
19
Compensation Conclusions (2)

• Salary by Position
• Managers Directors VPs Top Dogs

The 100K Manager 1997 85 1999 45
The VPs really get the spoils -- (vs. 1996) 3x
more likely to be in 175K Club

20
Base Salary Managers
Managers (n19)
of Respondents
21
Total Expected Compensation Managers
Managers (n19)
of Respondents
22
Director Compensation...
His peak earning years came and went without a
ripple.
23
Base Salary Directors
Directors (n78)
of Respondents
3 of respondents 175,000 - 199,999
24
Total Expected Compensation Directors
Directors (n78)
of Respondents
25
Base Salary VPs
Vice Presidents (n53)
of Respondents
26
Total Expected Compensation VPs
Vice Presidents (n53)
of Respondents
27
Base Salary Top Dogs
Top Dogs (n11)
of Respondents
President, CEO/COO, CFO
28
Total Expected Compensation Top Dogs
Top Dogs (n11)
of Respondents
President, CEO/COO, CFO
29
Compensation Conclusions (3)

• Salary By Gender
• Glass Ceiling is Shaking But Not Breaking!
• Greater percentage of women vs. men with base
  salary 175 - 200K, but
• Women are 3-5x more likely vs. men to earn
• Twice as many men as women earn 200K

30
Base Salary by Gender
Respondents
31
Total Expected Compensation by Gender
Respondents
32
So, Are We Happy????

• Biotech Execs profess to be happier than their
  Pharma counterparts - especially with regard to
• - Role of BD in company
• - How company does deal
• - Career path
• Pharma makes decisions more slowly, by
  committee. It isnt a decision-making role, its
  facilitating. The role of BD for biotechs is
  much more important. You look to BD to bring in
  as you look to financing to bring in .

33
So, Are We Happy????

• Biotech Pharma LBD execs have equal levels of
  satisfaction with their compensation -- about a
  2.5 on a scale of 1-5.
• Most are secure in their prospects for the
  future.
• There is tremendous job security in being the
  head of business development. Every start-up has
  to fill this role. Everyone does business
  together now, nobody operates alone, and you need
  to do deals to survive. Even when biotechs go
  through massive layoffs, BD is the last to go.

34
BDs Role
35
So, What Are We Bitching About?(and how many
worlds apart are we?)
Principal Factors Making Job Most Difficult
Pharma
Biotech Internal Politics 62 29
Lack of Budget for Doing Deals 39 22 Risk
Avoidance of Company 44 10 Unrealistic
Expectations of Co 25 16 Lack of
Products 29 45 Lack of Experience of Others
in Co 32 41 Unrealistic Expectations of
Boss 15 33 Lack of Training of Others in Co
20 28 Inexperience of Potential
Partner 12 23
36
And, What Are We Going to Do About It?

• 55 Plan To Stay With Present Company, and move
  to another position in...

Marketing Sales 16 Pharma
4 Biotech
Operations 15 Pharma 28 Biotech

LBD (Higher Level) 47 Pharma 48
Biotech
37
Where are we going?

• Interestingly, though, nobody wants to jump the
  fence
• consider a move to the other side
• Pharma makes decisions slower, by committee. It
  isnt a decision-making role, its facilitating.
• Biotech is squirrely. Theyre always begging
  for money.
• Biotech companies are exciting and challenging,
  and there are lots to pick from.
• Theres a certain age by which you need to make
  the move from pharma to biotech. Beyond it, you
  might not make it.

38
And, What Are We Going to Do About It?

• 45 Plan To Hit The Road Within 2 Yrs

Biotech 54
Pharma 36
Trigger Event
Pharma Biotech Lack of advancement 25
Lack of advancement 20 Internal politics
21 Merger
20 Merger 18 Co.
may run out of cash 16 Inadequate comp.
14 Inadequate comp. 15 Lack of
deal funding 11 Internal politics
11
39
Speaking of Lack of Advancement..
At what hour tomorrow do wish to resume your
humdrum existence.
40
So, Where Are We (NOT) Headed?

• Not to the Beach or Golf Course!
• Not to the Consulting Ranks (Yeah!)
• or hang out a shingle
• Japan would be OK, but Pakistan is out at this
  point.
• My goal is to become CEO of a biotech company.

41
Denial, anyone?

• Mergers?
• Acquisitions?
• Wall Street 20 growth per annum expectations?
• Dearth of late stage product opportunities?
• Trouble securing biotech financing?

42
The .com Financing Environment
43
BD Optimism
44
Denial, anyone?

• Nearly 80 of LBD execs believe there is a
  medium-high chance that their companies will
  remain independent over the next 3 years.
• But, 32 of biotechs believe there is a
  medium-high chance their companies will run out
  of within the next 3 years
• Biotechs merging out of desperation will create
  a bigger, more desperate company
• 50 of Biotech execs expect their companies to
  launch a product within 3 years.

45
Where are we going?

• Ex-Healthcare? Less than 1, would leave
  healthcare for another industry
• But, not because theyre ill-equipped
• Healthcare is more exciting than the latest
  Internet play, and it isnt quickly obsoleted in
  6 months.
• Dealmaking in biotech is more complicated than
  in other industries. The product is a hope and
  a dream. The business itself is more complex,
  there a longer time frames and heavy science, RD
  and legal and regulatory issues to contend with.
• Moving to another industry would be like a
  cakewalk

46
Observations

• Smarter people are sitting on both sides of the
  table (and both sides need smarter people)
• The people sitting across the desk from us are
  getting as smart as we are -- they realize the
  value of the assets they have.
• Why do you think these deals have gotten so
  expensive?!!

47
Observations

• Theres plenty of room in biotech!
• 1400 biotech cos w/1-2 LBD staff
• LBD is FILO - first-in, last-out
• vs. Pharma - how many LBD execs can Pharma
  companies absorb
• my job is to bring in late stage opportunities.
  Theres a chance, that if I do a good job, Ill
  be out of one.
• in the event of a hostile takeover, there would
  likely be 1-1 redundancies

48
THE END
49
Tools of the Trade in or Out of Healthcare - What
makes a good LBD Person

• Track Record Success
• Intelligence
• Ability to get the Job done
• Creativity to bridge the gap and solve problems
• Good Tools, and critical judgment to know you
  have them
• Great interpersonal skills, the ability to
  articulate and make people feel comfortable
• Power of persuasion and diplomacy

50
Advanced Degrees
Graduate Degree Earned
51
Satisfaction With.
Activity Pharma Biotech Job 2.29 2.19
Boss 2.48 2.34 Compensation 2.51 2.46
Role of BD in Company 2.51 2.12 How Company
Does Deal 3.02 2.72 Own Role in Doing
Deal 2.28 2.13 Being in LBD 1.79 1.79 Career
Path at Compa ny 2.64 2.32
1 highest
52
Total Compensation by Company Headquarters
Respondents