Fate Therapeutics, a fledgling Seattle biotech backed by significant local investment, is on the prowl for a captain. But its hunt for the...
Fate Therapeutics, a fledgling Seattle biotech backed by significant local investment, is on the prowl for a captain. But its hunt for the perfect chief executive is taking it far from the shores of Puget Sound.
More than three-fourths of the candidates Fate is considering live outside the Seattle area, which is a secondary biotech hub compared with Boston or San Francisco.
So if the right person is unwilling to relocate to the Puget Sound area, Fate’s lead investor says, the stem-cell research company could end up moving.
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With $12 million in startup financing at stake, Fate’s founders have to be flexible.
“You have to go for the best athlete,” says Robert Nelsen, managing director of ARCH Venture Partners, which led the funding round.
While some executives blame the lack of local funding for holding back the Pacific Northwest’s biotech sector, venture capitalists and recruiters instead point to a dearth of top managers.
These executives are key, as many investment decisions are based on the leadership of newly created companies, said Bob Overell, president of biotech startup PhaseRx and a veteran venture capitalist.
“There’s a real shortage of entrepreneurial CEO talent locally,” he said.
The local biotech industry hasn’t hit many home runs of the type that produces “C-level” executives — CEOs, chief financial officers, chief operating officers — with a shining track record.
Also, the area has no locally based Big Pharma corporation or profitable independent biotech, typically the other font of veteran executives. Many who now dominate the scene once worked for Immunex, the region’s most successful biotech venture, acquired by California-based Amgen in 2002.
“We’re looking for someone who has done it before,” said Nelsen, referring to executives who have successfully led a biotech venture to commercial product launch or a profitable buyout.
Most local champions who fit that bill have struck it rich and are retired, or have their pick of opportunities.
But luring experienced candidates from elsewhere is tough, because many are reluctant to move to a market that’s not a top biotech center.
“People feel Seattle is so far away from everything,” said Robert Ferguson, an executive recruiter with Korn/Ferry International. “They say: If [the job] doesn’t work out, what do I do?”
Not that it’s impossible. The Northwest has worked its charms on recent high-profile hires, such as Meenu Chhabra, CEO of startup Allozyne, which specializes in protein therapeutics.
A first-time chief executive, Chhabra said she was lured to Seattle last fall from a top post with Novartis in Geneva by Allozyne’s impressive roster of investors, which gathered a hefty $30 million to back the venture.
“What was sold to me was the opportunity,” said Chhabra, who says she passed up five other offers to lead companies in Europe.
Seattle itself, she said, turned out to be an “absolutely lovely surprise.”
Job opportunities for top managers in many industries are far outpacing the supply, according to a report by Korn/Ferry International. But in Seattle’s biotech sector, recruiters have to work extra-hard.
“You have to make more phone calls, do more due diligence upfront on the candidate,” Ferguson said.
That includes spending time with them, becoming acquainted with their family situation and their hobbies, to see if they would be a good fit for the Pacific Northwest.
Some recent negotiations with candidates have fallen through because they couldn’t move their families here, Ferguson said.
“You’ve got to be realistic in talking to a candidate whose whole life revolves around Broadway shows and Yankee games — you don’t get that kind of thing here,” Ferguson said. On the other hand, outdoorsy and adventurous types love it here.
Ferguson helped recruit Greg Schiffman, Dendreon’s chief financial officer, from a San Francisco Bay Area company in late 2006.
Initially, Schiffman was unsure of what biotech opportunities existed in Seattle — “Washington doesn’t get discussed much in the Bay Area,” he said. San Diego, an up-and-coming hub, was more familiar territory.
But he was open to discussing opportunities here because his daughter lived in the area, and most of his family was in Portland. In addition, he found his current employer — which aims to launch a prostate-cancer product sometime next year — compelling.
“Dendreon is a great story,” he said.
There’s also a growing number of people who don’t mind moving around.
“The average biotech lasts somewhere between five or six years” before being acquired or failing, said Allozyne’s Chhabra, whose career has led her from Toronto to Milan, Italy, and Geneva. “The person who is going to be attracted to that is going to be OK with assuming that risk.
“That’s very much in line with my personal nature because I’ve been traveling around the globe for several years now.”
The region’s increased concentration of global health initiatives — such as the Bill & Melinda Gates Foundation — could boost its recognition as a biotech hub, said Jack Faris, president of the Washington Biotechnology and Biomedical Association.
The association and other local institutions also plan to have a significant presence at the Biotechnology Industry Organization’s annual conference in San Diego, the industry’s main event, to advertise Seattle’s potential.
What Seattle lacks in top corporate leadership for biotech, it more than makes up for in research talent.
The area’s strong academic institutions — led by the University of Washington and the Fred Hutchinson Cancer Research Center — provide “plenty of people” to staff biotech firms, Ferguson said.
Nelsen is not optimistic about finding a local CEO for Fate. On the other hand, he said, “it’s pretty feasible” to keep the company’s research and development arm in Seattle.
Ángel González: 206-515-5644 or firstname.lastname@example.org