Hunt Scanlon Media’s 2022 Healthcare/Life Sciences Talent Leadership Report

Healthcare and life science organizations have been turning to executive search firms more than ever to acquire world-class leadership. The most pressing challenge has been finding high-impact, innovative leaders. 

In this special 2022 Healthcare/Life Sciences Talent Leadership Report, Hunt Scanlon Media editors examine how executive recruiters are stepping up their game for clients ranging from small start-ups to billion-dollar, global business enterprises. Top consultants share their insights on the current state of recruiting for the healthcare and life science sector, how recruiting for leaders has been impacted by the pandemic, and why having the right talent in place is now more important than ever. 

As we enter 2022, it is quite daunting and remarkable to reflect on all that has transpired in just the past 12 months. A year ago, most of us had found a way to navigate working remotely, becoming Zoom experts, hiring C-level executives without a physical handshake, and closing transactions without ever being in the same room. We had become adept at better balancing work/ life issues and challenges, and we were succeeding in a tremendous transformation from operating most of our working lives from an office setting to a remote working space somewhere in our homes. We would learn to deal with disruptions including the doorbell ringing, a family member interrupting us during a Zoom, and the stretching of the day from before dawn until after dusk. Throughout this great period of adjustment, we were also affected by existential circumstances including polarization within our political systems, global trading issues, and the continuing threat of variants to the pandemic.

We had endured perhaps the most contentious election in our country’s history, and we were preparing for a change of leadership with the hopes of embracing a period that would reflect calmness and civility.

In those first days of 2021 that thought was shattered with the images of our capital being stormed, the death toll from COVID in the U.S. was approaching 400,000 with that number being tragic and sobering. We had experienced the duality of small businesses failing throughout the country, rising unemployment ranks, and interestingly the stock market setting records and indicators portending a healthy economy. We were also days away from the FDA approving two vaccines that would, hopefully, provide the beginning of a new chapter to tame this pandemic.

As the year progressed, vaccines were being rolled out and a frenzy for those who wanted to obtain the vaccine began on almost a daily basis. The FDA and CDC were providing new guidelines regarding eligibility and timelines to adhere to. It became clear that given the timetable of individuals being eligible for vaccines working remotely would continue for the foreseeable future. By this time most companies in the life science sector and beyond had established new paradigms of productivity and efficiencies in operating in what became coined as the “new normal”.

Against this backdrop, the life science sector was at the center of driving strategies that would set a new precedent of addressing the catastrophic pandemic through the development of vaccines, and monoclonal antibody therapeutics to treat patients who had contracted COVID-19.

Pharmaceutical and biotech companies established a new paradigm under the umbrella of Operation Warp Speed, uniting in the commitment to deliver essential treatments to address the pandemic. A spirit of unprecedented cooperation between the FDA and other global regulatory authorities, industry, academia and research institutes defined the climate.

New paradigms of manufacturing and distribution channels were also being created to address an extraordinary demand for the vaccine. An unprecedented level of funding and flow of capital into the life science sector created a tremendous opportunity for funding and the establishment of new companies to address the critical needs we faced on a global level.

This investment of capital expanded beyond therapies to address COVID and created a robust environment for discovery and development in broader areas of infectious disease, CNS disorders, and rare diseases.

Promising new technologies including cell and gene therapy, mRNA TREGS, gene editing and the convergence of machine learning, and high-tech modalities with drug discovery platforms were receiving a great deal of attention and funding from venture capitalists, private equity, crossover funds, and SPACs. This created an elevated level of new company formation within the life science sector. With new startups being funded at a trail blazing pace, the demand to assemble highly talented leadership teams increased substantially.

The tremendous flow of capital created an unparalleled demand for talent within pharmaceutical and biotechnology companies. In the most senior and strategic levels of the organization, search firms were being contacted to initiate searches and project pipelines were swelling. Among board of directors and CEOs was the growing concern of building internal capabilities and core competencies to fully deploy the invested capital.

In addition to focusing on bringing the highest level of talent to the table, clients were increasingly committed and relying on search firms to provide a candidate pool that represented diversity and inclusion.

Against this backdrop, search firms and companies alike were developing new paradigms of recruiting talent relying on numerous teleconferences, Zoom calls, and intensified referencing to complete key strategic hires without ever meeting candidates face- to-face.

In turn, candidates were being deluged with calls, emails, and other outreach vehicles at an unprecedented level. Many candidates now had greater flexibility to explore potential career growth opportunities with more flexible schedules and the ability to make themselves available for conversations. This increased demand for talent directly swelled compensation expectations and, in many cases, a bidding war mentality in developing components of an offer to attract candidates.

The level of search activity as we enter 2022 for key talent at the C-level, board of directors and functional leadership has continued at a robust pace and all indicators point to a continuation of this high level of activity which portents for a very optimistic outlook as we enter a new year.

– Steven Hochberg Founder and CEO Caliber Associates

  THE LIFE SCIENCE SECTOR: REFLECTIONS AND PROJECTIONS

Steven Hochberg, Founder & CEO of Caliber Associates, Reflects on His Experiences in Recruiting Leaders for Life Science Firms

 Steven Hochberg, founder and CEO of Caliber Associates, is recognized as one of the leading recruiters in the life science sector. Mr. Hochberg’s focus has been on recruiting CEOs, board members, C-level and strategic teams for emerging life science companies and global biopharmaceuticals. Steve has assembled a small team of highly experienced, results-driven search professionals. Collectively, they have contributed to the growth of more than 150 leading companies representing a track record of more than 700 searches completed.

In this article, Steve reflects on his experiences in recruiting leaders for life science organizations. He discusses the impact of COVID-19 and how scientific breakthroughs impacted recruiting and provides perspective on his expectations for 2022.

By almost any measure, 2021 was a year filled with incredible challenges and triumphs for the life science sector. As the industry that was clearly focused on being at the epicenter of addressing the challenges of the global pandemic, biopharmaceutical companies responded by delivering diagnostics and testing, vaccines, and therapeutics, within unprecedented timelines, navigating manufacturing and distribution challenges while working under a new paradigm of cooperation between global regulatory authorities and companies.

Working together, global regulatory authorities and industry leaders achieved the approval of three major vaccines and a number of therapeutic monoclonal antibody cocktails to address the scourge of this pandemic. To be sure, in no way can we close the chapter but rather, we can take comfort in knowing that the industry has created the systems, processes and capabilities within their organizations to continue to deliver new vaccines and therapies that will largely prevent the catastrophic outcomes of the pandemic.

The successes achieved by biopharmaceutical companies by no means were limited to initiatives solely focused on COVID-19 remedies. Rather in 2021, the life science sector delivered more than 50 approved drugs and biologics to treat a myriad of diseases.

Included in this robust list of new product approvals was the first new drug in twenty years to treat Alzheimer’s. Additional key approvals to treat Muscular Dystrophy, ADHD, cancer, cardiovascular disease, infectious disease, autoimmune disease, and rare diseases round the list of drug approvals.

Given the fact that a large percentage of corporate and government employees alike were working remotely, it is a true testament to creativity, perseverance and dedication that has resulted in these achievements.

Financing

The life science sector has continued to enjoy a tremendous influx of capital. This funding has supported new platform technologies and product development to treat many diseases. The sources of this capital have been expanded beyond the traditional models of venture funding.

Companies have benefited from a myriad of sources of capital including family offices, venture capital, private equity, cross-over funds, SPACs and public offerings.

As of four months ago, the level of financing rounds and activity in company creation in the United States has been at a frantic pace. In addition to the number of new companies being funded, the size of initial investments has increased substantially. The top six Series A financings were funded by venture capitalists with rounds in excess of $100MM and the remaining financing in the top ten in the sector were above $85MM.

Additionally, there were in excess of 81 IPOs at the end of the third quarter in 2021. At the end of the first half 2021 there were 16 life sciences de-SPAC mergers.

The source of this funding has placed unique challenges on these companies, to grow and build the core competencies necessary to advance their technologies as fast as possible. The outlook for 2022 holds some unique challenges.

Broader economic indicators are pointing to higher inflation and expected interest rate hikes by the Fed. Additionally, in the last 4 months of 2021 and January 2022, valuations of publicly traded biotech companies have been hit hard.

 While there remains a great deal of cash on the sidelines to deploy, it is likely that given the current climate, investors will slow down the pace of the first half of 2022. With the decline in valuations, an increase in M&A activity can be anticipated.

Biotechnology and Pharmaceutical Breakthroughs

Scientists and researchers have made tremendous contributions in the field of vaccine and therapeutic development to address COVID-19 and other strains that are being identified. Beyond the discovery and development of vaccines and therapies to treat COVID-19, there have been a substantial number of breakthroughs that represent a new frontier in the years ahead. Some of the exciting breakthroughs have included advancements in synthetic DNA, the development of vaccines, new modalities for the testing and tracing for COVID-19, gene sequencing, gene editing and additional advances in cell and gene therapy.

In the years ahead, we are likely to see the convergence of biotech and high technology to develop new approaches with greater efficacy with advancements to what once seemed impossible. The merging of pharmaceutical drug discovery and development with technology industry verticals is likely to be one of the next most exciting areas of growth and promise.

New modalities, novel platforms, and innovative approaches have created opportunities to address previously undruggable targets and untreatable diseases. After a pause in the last several years by investors to support new initiatives in the infectious disease and CNS therapeutic areas, there seems to be a renewed appetite for investing in companies developing therapies to treat these disease states.

Additionally, continued interest in immuno-oncology, has remained high as has the flow of capital into companies committed to developing therapies to treat rare diseases.

Product Approvals

In the past 12 months, there have been significant numbers of approvals in both diagnostics and therapeutics.

There also has been unprecedented cooperation and collaboration between industry and regulatory authorities as the focus to address the COVID-19 pandemic has continued to be of paramount importance.

During 2021, a number of diagnostics were approved as were three vaccines from Pfizer, Moderna, and Johnson & Johnson. Additional approvals with regard to monoclonal antibody therapy have also occurred, as has the most recent approval of Merck’s new tablet to address COVID.

While activities related to COVID have captured the spotlight, there have been a significant number of product approvals in other important therapeutic areas including immuno-oncology, rare disease, and the first product approved in 20 years to treat Alzheimer’s.

In total more than 60 products have been approved in 2021 and perhaps the most encouraging news is the number of products with PDUFA review dates during the first half of 2022.

Manufacturing and Operations

With the remarkable effort to develop COVID-19 diagnostics, therapeutics and vaccines, a significant challenge with respect to manufacturing capability is pressing the biopharmaceutical industry. The ability to manufacture both vaccines and therapeutics to supply the global population is daunting and companies have been committed to stepping up the investment in manufacturing capabilities.

Additionally, with the continued focus on innovative approaches in cell and gene therapy to treat disease, there are significant challenges as it relates to manufacturing and supply chain. The supply chain and manufacturing complexities with respect to making personalized genetic medicine are very large and represent a unique challenge for the industry.

There needs to be increased focus and innovation in the supply chain and manufacturing processes to address all the new products in the pipeline that are being developed. Pharmaceutical companies are going to need to move away from traditional pharmaceutical manufacturing processes as they continue to develop personalized medicines, and this transition will be costly, risky, and time consuming.

Being able to manufacture low volume biologics at a reasonable cost will be a key challenge biopharmaceutical companies face in delivering personalized medicines at an affordable price.

Demand for Talent

The COVID-19 pandemic has placed tremendous pressure on biopharmaceutical companies to grow and expand their employee ranks at virtually all levels of their organization.

This has created major shortages in the labor market particularly at senior levels within the organization.

The need for highly specialized leaders in functional areas who can apply new paradigms of management in a remote working environment has increased substantially. To address this need, employers must create and deploy innovative solutions that will enable them to grow and advance their pipelines rapidly. Additional demand for talent at the C-level and board of director level as a result of new company formation has created an environment where companies are looking to grow their leadership teams at an unprecedented pace.

An additional major contributing factor to the intense demand for talent has been the influx of capital to the life science sector. An unprecedented number of companies have been formed in 2021 with outsized initial rounds of investment. This has accelerated the build-out of companies and opportunities has been expanded at all levels of the organization, particularly in the creation of Leadership Teams.

The demand for talent has created intense competition among companies to attract the leaders required. This has resulted in biopharmaceutical companies pushing the envelope with respect to compensation packages and position titles. It is not unusual to see the candidate pools in searches tapping into individuals two levels down in an organization to attract them to new opportunities.

It is likely that this pace of growth will continue well into the first half of 2022. Search firms supporting the life science sector can anticipate a robust first half of activities in the new year. However, increased economic pressure with respect to inflation and the Fed raising rates has the potential to dampen the level of activity in the second half of the year particularly if the flow of capital slows during that period.

The Outlook for Life Science Search Firms

With the pace of growth in the executive suites in life science companies in 2021 putting significant demand to resource projects appropriately, search firms have been trying as hard as possible to reduce cycle time and bring searches to successful completion at a frenzied pace. Larger firms have deployed members of teams from other industry specialties where growth was lackluster to support the swelling activity of the life science vertical.

While this approach provides a necessary stopgap on a short terms basis, given the complexity of the industry and the unique skill sets required for most positions, it is important that search firms make the appropriate investments in training and development of researchers, associates, and principals. Additionally, the temptation to “overbook” and “under-resource projects” has already resulted in record-breaking growth in revenues for most search firms supporting the life science sector.

It is important to be cognizant that client satisfaction and quality search work will ultimately define long term success for those firms who are willing to invest in the sector. Some key trends that search firms will encounter moving into 2022 include the following:

The Changing Paradigm of the Work Environment

As we enter 2022, with the recent spread of the Omicron variant we can anticipate additional delays and challenges as companies review and refine their return to work strategies. It remains clear that in the life science sector, many positions particularly in research, operations and manufacturing will require on-site work and companies to maintain their diligent health and safety programs and processes. Given this uncertainty, it is likely that those positions that had previously involved working from a home office setting will remain in place most likely through the first half of 2022.

Navigating this issue represents an opportunity for search firms to help shape approaches for life science companies with the unique input obtained from being on the front line with candidates and understanding their expectations. It seems to be very clear at this point, given the demand for talent that companies that are willing to demonstrate the highest level of flexibility and the ability to design hybrid work scenarios are likely to have a much greater ability to attract new executives.

In general, data suggests that most executive level candidates prefer a balance of working remotely while also being present at the office and in critical meetings in a face to face setting throughout 2022 and in years to come.

In order for this new paradigm to be successful, clear communication of expectations and “definition” of the terms of hybrid, must ensure that there is alignment between candidates’ preferences and company objectives.

While the pandemic has created new opportunities to explore working environments, remote working scenarios require great attention in order to achieve organizational efficiencies and help define company culture.

Companies that pay attention to these issues are likely to develop the tools and strategies to succeed in the years ahead. Continued investment in technology and support services, as well as anticipated increases in travel expenses, will all contribute to company’s long-term performance.

Candidate Fatigue

As the demand for talent has increased substantially, the outreach to candidates via e-mails, texts, phone calls, and zooms has increased exponentially. It is not unusual to hear candidates share that they have been contacted about multiple similar opportunities several times each week. The result of this is truly assessing candidates’ interest levels for particular opportunities and determining if they are serious about making a move. The emphasis on building a slate of competent and qualified candidates should not replace the quality of search work and thoroughly vetting candidates throughout the process.

While Zoom interviews have provided a level of efficiency in the process by enabling candidates and companies alike to schedule interviews over multiple days, this has sometimes presented challenges of logistics and scheduling, as well as effectively managing candidate and client’s feedback.

Search firms can continue to enhance the search process by paying closer attention to establishing key timetables and milestones in the search.

Diversity, Equality, and Inclusion

Within the past two years, this issue has received a renewed focus, and it remains clear that almost every company in the life science sector is committed to having a greater sensitivity in recruiting and building teams that are more representative of our larger society as a whole. There will be continued focus and expectations on the part of search firms to identify and interest highly talented candidates of both ethnic and gender diversity.

One important aspect in this initiative that search firms can drive is to ensure that the messaging and recruiting process supports and aligns with this broader objective. Clients will need to clearly show that they are committed to bringing in, developing, and including candidates of diversity and interviewers and the search process should be reflective of the candidates, clients are looking to attract.

In addition to diversity, equity, and inclusion strategies at the C-level, mandates in certain states are likely to continue to ensure corporate boards are also committed to attracting candidates of diversity This will continue to be a challenge as the pool of talent must grow throughout organizations to develop individuals that bring the unique capabilities to be value added members of corporate boards.

Enhancing Due Diligence

During 2021 with most of the hiring in organizations occurring without ever meeting candidates in person, the need for more in-depth reference checking and diligence was never greater. Without the benefit of experiencing candidate interactions on a face-to-face basis, organizations must rely more heavily on exploring the unique qualities that in the past could have been observed in personal meetings.

Gaining insights to candidates’ styles, participation in group meetings, and comfort in larger settings are all items that a candidate’s prior colleagues are likely to provide meaningful input to.

Return to Face-to-Face Interviews

As we begin a new year with the majority of individuals being fully vaccinated and companies developing return to work strategies, there has been a greater emphasis on face-to-face interviews to be utilized in the search process. This trend is likely to come back in full force as the year unfolds. While Zoom calls may provide opportunities during the initial rounds of interviews, it is likely that at the vice president and above level as well as board of directors searches will include at least one round of face-to-face meetings. This is a trend that is being widely embraced by both candidates and clients and should have a positive impact in the search process in 2022 and beyond.

The Future Looks Bright

As we conclude navigating one of the most challenging and exciting years, and enter a new one, life science companies can take great pride in the achievements that have been accomplished and the contributions to society at large in providing vaccines and therapeutics to address this pandemic.

The life science sector has delivered on the unprecedented needs and demands to address the pandemic and has continued to be at the forefront of innovation, using technology and science and developing new approaches and techniques resulting in delivering highly effective new therapies to treat important unmet medical needs.

The focus on innovation and growth has flourished during a year faced with enormous challenges and changes to the established worked paradigm. Those companies that can continue to be responsive, agile, and flexible will likely achieve the successful milestones that bode well for a new year of growth and achievement.