“Flying Blind”

January 25, 2017 rist

by Dr. Maurice Cary

Last month sometime in the post-turmoil of the US elections, something now ex-president Obama said about now president Trump struck me. Referring to Trump’s lack of interest – or whatever one chooses to label it- in being briefed several times a week by the security/intelligence agencies as is customary and necessary for all incoming presidents, Obama stated that if one did not receive those briefings, then one will be “flying blind”. It sounds pretty scary particularly if one is an airline pilot or the leader of a nation. However, it occurred to me that it also could apply to investment groups that choose to operate in the pharma/biotech arena. The statement could also apply to management of small or start up pharma/biotech companies. It could. But for the most part, I think “flying blind” applies to numerous VC’s and investment groups that have decided to put their money in pharma/biotech.

Flying blind in this sense is meant to infer that investment is being made in a project that the investor(s) know little or nothing about. At best they know a bit, but not nearly enough. Specifically, my exposure to the investment community started a bit over 7 years ago and it has been disappointing to say the least. My hope in working with the investors was that the people who were putting up the money would be interested in critical details that would ensure the success of the company/project or would allow them to make informed decisions to get out in a timely manner: cutting their loses. Wrong! But then again, what should one expect from individuals/groups who think losing 90% of the time is success.

”Why would anyone intentionally throw away their money?” was the question that kept spinning in my mind. Well, at least part of the answer is they are not doing it intentionally. It basically boils down to the much worn comment, “they don’t know what they don’t know”. Their bigger problem however is they don’t know where or how to properly inform themselves because they don’t have the background to be able to properly select the staff or consultants they need. Having said that, I am aware that there are consultants out there who are also flying blind and not providing the level of input or service required, so a lot of the investors have burnt fingers. This I understand and it is indeed unfortunate. Nevertheless, this should not preclude pursuit of the required expertise to make the most informed or best decisions possible. So how do we break this cycle? I thought I knew, but it still remains an exercise in frustration. If I had hair, I’d pull it out!

Any thoughts/ideas out there in blogosphere that might help break this cycle? My first company is a survivor of the 2008 crash. I can tell you prior to the crash, I saw a lot of good money chasing dumb projects. So the crash was not a big surprise to me. In fact I welcomed it as a measure to clean out the knuckleheads in the business. We need wise well-informed investors to develop treatments and bring them to market. How do we get there? How do we get them to be open to know what they don’t know?