MAKING A SMOOTH TRANSITION FROM A LARGE MEDICAL DEVICE FIRM TO A SMALL BIOPHARMACEUTICAL COMPANY
Last year, David Johnson made a big change in his career life. He transitioned from serving as CEO at ConvaTec — a $2-billion global medical device developer and marketer — to lead the $2-million publicly traded transdermal wound management and drug delivery biopharmaceutical company, Alliqua, Inc. During an interview with Ashton Tweed, Johnson highlights the major challenges and benefits in making such a move.
When he was making the transition from ConvaTec, Johnson said he didn’t want to go to a big company again. And in searching for a new venture, he saw a huge growth opportunity at Alliqua and its three core businesses: advanced wound care, transdermal drug delivery, and contract manufacturing. The potential for growth was primarily based on the company’s strong proprietary hydrogel technology platform. Their board believed in Johnson’s vision for building off of the company’s technology platform and in February 2013, Johnson moved up from a position that he held for 3 months as executive chairman of Alliqua’s wound-care business and member of the board of directors to CEO.
Alliqua’s Hydrogel Technology Platform Provides Great Growth Opportunities
In the area of advanced wound care, Alliqua currently has two FDA-approved and reimbursed products: SilverSeal Hydrogel, an antimicrobial dressing, and Hydress, a moist wound dressing. Compared to other hydrogel products on the market, Alliqua’s hydrogels demonstrate many competitive advantages, including painless adhesion to the body, compatibility with active ingredients, high water content, purity, stability of form and composition, and reproducibility. The company announced a life-cycle management plan in March 2013 as a first phase to expand their advanced wound-care portfolio. As part of this expansion, Alliqua is making several product changes to help SilverSeal and Hydress better meet the needs of patients with a broader range of wounds. In addition, they see themselves partnering with other companies who have complementary technologies to build a suite of technological solutions for the wound care practitioner. The company is building out Alliqua’s sales and marketing in this sector of the business, as well.
Since hydrogel technology can be used to deliver therapeutic compounds through the skin, the company is also building a value proposition for a drug delivery platform as they work towards commercialization in several therapeutic areas. For example, Alliqua is launching a preclinical proof-of-study of an experimental transdermal patch containing lidocaine. These patches will be developed to treat localized acute pain, such as postoperative pain, back pain, and pain associated with arthritis and sports injuries.
A third area of expansion is in the contract manufacturing area. Currently, Alliqua provides custom hydrogels to the original equipment manufacturer (OEM) market, including for medical devices, cosmeceuticals, and other commercial product applications. Thanks to a “world-class manufacturing team,” this business has some good opportunities for growth.
Raising Capital Is the Biggest Challenge
When it comes to challenges, Johnson says that raising capital has been the biggest hurdle he’s faced so far in his new role at Alliqua. “We have tremendous vision,” explains Johnson. And getting “good money” — long-term investors who share that vision versus short-term investors who are looking for a quick profit — is the major challenge in raising funds. The company has made progress in that area, however, already raising $3 million in the second quarter of this year.
Using a sports analogy of offense versus defense, Johnson highlights a significant difference he’s experienced between working at large versus small life sciences companies. At small companies, the employees are more entrepreneurial and singularly focused on building the business and taking it to the next level each and every day. This makes for more of an offensive game plan, which Johnson believes is a more enjoyable culture to operate. At large companies, however, there tends to be a slower environment with more roadblocks. This makes employees feel they are frequently under attack — from a variety of different stakeholders, causing more frustration — and that creates a more defensive atmosphere.
A Fun Part of the Job: Rolling Up Your Sleeves and Doing More Yourself
According to Johnson, another major difference he’s had to adapt to in his present position is not having resources readily at his fingertips. In a large company like ConvaTec that had about 8,000 employees, there were teams that specialized in certain areas, such as public relations and management. Now, in order to get things done, Johnson finds he has to be more resourceful and innovative. “You have to roll up your sleeves and do a lot more yourself.” He admits, “But for me, this is a big part of the fun of the job. I am enjoying getting my hands dirty and, together with a great group of colleagues, building a company from scratch.”
As the company grows, Johnson has built a winning team with the same type of entrepreneurial spirit. “I try to filter out people who talk the talk,” he says, “but don’t walk the walk.” In other words, he wants people who not only want to build something, but also know what success looks like because they’ve experienced it. They can look back and reflect on the “good, the bad, and the ugly” — knowing where they succeeded and what had failed along the way and learning from both.
There are many similarities in what’s needed to lead any company, regardless of size, to success, Johnson points out. “At the end of the day, you still have to run a company efficiently and effectively,” he observes, “and you still have to motivate and lead.” Finding and hiring great people, developing a clear vision and strategy, having a strong technology platform, and executing it in the marketplace are all key. Judging by the progress Alliqua has made since Johnson was brought on board, the transition has been seamless.
Ashton Tweed would like to thank David Johnson for this interview. If your company needs help from members of the Ashton Tweed Life Sciences Executive Talent Bank, we can supply that assistance either on an interim or a permanent basis. Additionally, if you are among the many life sciences professionals affected by the changes in the industry, Ashton Tweed can help you find the right placement opportunity — from product discovery through commercialization at leading life sciences companies — including interim executive positions and full-time placements. In either case, please email Ashton Tweed or call us at 610-725-0290. Ashton Tweed is pleased to continue to present insightful articles of interest to the industry.