There are too many PIs in academia eager to start their own company – without understanding basic things like the drug PK optimization stage. There are naive investors ready to pour their money into any start-up that it is presented to them as an exciting investment opportunity. And then there is an industry-wide problem with business-people that have great confidence in their own management qualities but little knowledge about how the research that they are directing is actually done. I will add some comments about the management part.
People with business background like business models, charts, decision-making diagrams. They hope that it is possible to succeed in a research-based business according to some management formula. They like to impose methods of dynamic management on drug discovery, assuming that the modern management theories actually work in real life and that they are applicable to any business activity (like organizing those fuzzy wuzzies in the labs, to make them more efficient). But they don’t realize that drawing out detailed research progress flowcharts won’t increase rate of real research progress; only the number of meetings will increase. Identifying the “Go/no-go” checkpoints on he diagram is no substitute for the common sense.
Business-people also don’t appreciate the enormous personality factor in research, something obvious to anybody who has worked in the lab. Research is not some kind of franchise. The research people are not a comodity – or a concrete sludge poured into free slots of a well-laid organization structure. The actual choice in hiring research individuals is more important than anything that can be done later about managing them. One pushy or dishonest person can ruin the motivation of the entire lab.
The other thing that always bothered me is that the proprietary core technology/research results get so over-hyped by startups, to please their investors.
Salesmanship used on investors is not illegal – but the dishonesty bites back. If one begins with unrealistic projections and then makes too many promises, the moment will come when it becomes hard to make good on these promises. More often than not some kind of wishful thinking sets in during this process of sustained exaggeration, and the baloney corrodes the management and research alike. Disagreeable information are not acted on but are suppressed. Eventually a culture develops when CEO keeps saying “we will have two clinical candidates next year” while the entire research staff grumbles “not a prayer” and the lower management is already preparing evasive manoeuvres so that they wouldn’t be blamed when the reality sets in.
The investors encourage the deceit – by allowing the management to award themselves ridiculous quantities of stock options. To inflate the stock price until the stock options are cashed, clinical trials of troubled drug candidates are not cancelled in favor of improved backup candidates but are dragged out into late-stage trials, only to fail two years later at incredible expense.