John Hallinan is the newly-named Chief Development Officer of Danforth Advisors, the life science industry’s leading resource for operational accounting, finance support and strategic CFO advisory. He was previously Chief Business Officer at Massachusetts Biotechnology Council (MassBio), representing the world’s premier life sciences hub, where he led efforts to catalyze early-stage innovation. He has more than 30 years’ experience as a life science CFO and advocate for industry, academia and government collaboration.
In your experience, what are the hallmarks of successful life science start-ups? What do they do right?
Certainly novel science is important, along with the ability to craft a narrative to build the team and attract investors. Capital efficiency is also key. Scientific founders who can build lean teams and then strategically partner with external experts will find themselves in a better position to build value in their programs in a capital-efficient manner. The life science community is rich with talent and know-how gleaned from both successes and failures. It’s important to tap into this community and align with professionals who’ve been there before and can fill the gaps in teams or processes. Having led and mentored in various entrepreneurial programs for more than a decade, I’ve observed how this helps start-ups sharpen their focus and become more agile.
How is company formation evolving?
Over the past decade we’ve seen decreasing emphasis on costly bricks and mortar and FIPCOs and increasing acceptance of virtual models, where non-core work is outsourced to strategic partners. The new model allows early-stage companies to focus on core R&D activities, access expertise when needed, and promotes greater ROI.
What are the primary drivers of this change?
In recent months Covid-19 has played a part by requiring staff to work virtually, proving that it can be done effectively across many industries. Apart from that, in the biotech space, it comes back to the importance of capital efficiency. The capital needs of life science companies are unrelenting, and there are more flexible ways to access the skills and resources required to get from one stage to the next. Outsourcing non-core activities unburdens the internal team and allows programs to advance with greater speeds. The advantages are not limited to working with Clinical Research Organizations, but rather tapping into specialists to help define regulatory, product development, commercial and financial strategies.
What is the best way to find and vet strategic partners to ensure the right fit?
You can often locate strategic partners and learn of their domain expertise through referrals and seminars. There is a big difference between strategic partners who can create value across the life cycle of a company and providers who assist with specific transactions on an outsourced basis. The client base, track record, and depth/breadth of services will help to define a strategic partner.
What can emerging life science clusters learn from the ecosystem that’s been built in Massachusetts?
While innovation certainly isn’t limited to the coasts, there are a number of key pillars that enable innovation and foster a vibrant ecosystem. These include universities and academic medical centers, investors, government support, and depth of local talent pool. Around these are specialists who practice their particular discipline through the lens of life science expertise, whether IP attorneys, investment bankers or management consultants, all of whom have an insider’s perspective.
What is your view of the life science cluster growing in Philadelphia?
I have visited the Philadelphia area many times in my career and have always been impressed by the ecosystem and deep reservoir of life sciences talent. The stakeholders are aligned, and my recent visits reinforced that the area includes a vibrant and diverse group of companies and organizations spanning all stages in the life sciences.
Particularly impressive is the leadership stake in cell and gene therapy; the growing number of companies, related research organizations and influx of investment. Danforth has been fortunate to support several of these companies as interim CFO and in capital raising and IPO preparation. Philadelphia is the home base of our Mid Atlantic operations, led by Barb Carlin. We’ve grown the regional team to nearly 20 consultants, and there’s more than enough opportunity for us to expand and support the on-going wave of innovation.
What role does Danforth Advisors play in the ecosystem?
I’ve known the Danforth team for nearly ten years and have long been impressed by their knowledge of life sciences and what it takes for companies to succeed. No matter how promising the science, companies need strong financial and operational leadership to achieve their best outcomes and ultimately impact the lives of patients. There are vendors who can help with accounting and operational finance execution, and who perform these functions in multiple industries, but they are focused on the task – not the end game. Danforth is a strategic partner exclusively to life science companies, applying knowledge, perspective, capabilities and connections shaped entirely by sector experience. It’s a role that lies at the intersection of how companies start and grow, particularly in the new virtual model, and it’s part of what attracted me to join the firm.
We provide value in the following ways:
- Teams – ranging from staff accountant through CFO and encompassing broad skill sets to meet companies’ needs as they evolve. This flexible consulting model saves money, time and resources that would have to be invested in recruiting and retaining talent.
- Capabilities – from long-term strategy through day-to-day execution, we specialize in CFO advisory, operational finance and accounting, capital raising, IPO preparation and post-public SEC compliance, technical accounting and clinical business operations management, among other services.
- Connections – we bring our influential relationships to our work with clients, whether making strategic introductions to investors or enlisting the right bankers, insurance brokers, clinical research organizations, etc.
By providing this level of expertise in a scalable, capital-efficient way, we equip life science companies with sound strategy and resources for the right stage at the right time.
For additional information about Danforth Advisors, visit www.danforthadvisors.com.