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Life sciences finance leaders discuss strategies to scale businesses

INSIGHT ARTICLE  | 

Finance leaders gathered recently at the annual CBI Finance & Accounting for Biosciences Conference to discuss a wide range of topics affecting life sciences companies, from pharmaceutical to biotech businesses. Key topics from the event included the following:

The role of the chief financial officer in an era of cybersecurity and data privacy concerns: According to the RSM US Middle Market Business Index Cybersecurity Report, 15% of the executive respondents indicated that their companies experienced a data breach in the last year, up from 13% in 2018 and a significant jump from 5% just four years ago. In addition, more than half believe that an attempt to illegally access their company’s data or systems is likely in 2019. Life sciences companies are particularly vulnerable to threats given their valuable intellectual property, the vast amounts of sensitive data collections and potential third-party provider exposures. To address these threats, CFOs must consider a variety of approaches to counter, from rigorous third-party monitoring to incident response plans.

Enterprise resource planning implementation and seamless financial transformation: This session focused on best practices in ERP system selection and operational launch. The implementation plan should include the following elements: discovery, design, configuration, integration, data conversion, training and testing to ensure the ERP system serves the needs and goals of the business. Life sciences companies should also consider the benefits of a cloud ERP system weighing various cloud partner selection considerations from cultural fit to industry experience.  

Initial public offering readiness: Life sciences enterprises should use a comprehensive road map to ready the business for an IPO. Start with the end date in mind and work backward to determine whether your IPO date is realistic. Typically, planning should begin two to three years before the anticipated IPO date.

Contract research organizations and biotech collaboration—oversight of outsourced service providers: In many settings, outsourcing is the right move for life sciences businesses; however, it is essential to monitor and assess the relationship to ensure the provider is delivering on promises and offering added value. Consider key questions to help strengthen the outsourcing relationship and strategy.

Culture, diversity and inclusion—the secret to leadership excellence: How can a life sciences company create a more formalized CDI plan or enhance an existing one and what are the advantages of doing so? In this session presenters outlined four pillars companies should examine to identify CDI opportunities, including: workforce, workplace, marketplace and community. In a marketplace where recruiting and retaining skilled talent is challenging, particularly for middle market life sciences companies, an enhanced CDI commitment can be a differentiator.

In addition, a “life sciences by the numbers” session was presented focusing on the latest dealmaking, fundraising and IPO activity in the industry. In 2019, there has been 57 life sciences companies that have gone through an IPO and are actively trading. Those companies raised $12 billion, with the largest being Avantor and Smile Direct Club, representing $4.7 billion of all initial funds raised. Interestingly, of all the IPOs, 42% were private equity-backed and 49% were venture capital-backed. This is different from the last three years where 30% were PE-backed and 52% were VC-backed. Watch this encore presentation of the session for more.

Other conference presentations focused on capital raising and investment models, governance and risk management, leadership development, key tax considerations, and system and digital finance strategies.

RSM was a platinum sponsor for the conference, which was part of CBI’s financial series. For more life sciences industry insights, contact us and subscribe to our newsletter.

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John Lanza
National Life Sciences Practice Leader
John.Lanza@rsmus.com
800.274.3978