Biotech/Pharma Corporate Finance

It's a very specific valuation technique, but these are top companies. Depends on where you are in your career and how comfortable you are in developing skills where you're valuing pipelines and negative revenue (or certainly negative EBITDA) companies.

interesting.. does anyone know what comp/ascension is like at these companies?

He is correct and unless the products are on patent and have a long time before expiration, you have very limited visibility into the future of the company. That said, you could end up working for a company that gets bought out or get a big licensing deal that could be a goldmine. Assuming you get have some sort of stock purchase plan or similar tho. I worked for a large pharma FLDP and can share some more specific thoughts. I would go this route only if the smaller company offered upside in terms of getting equity, you are exposed to more risk so there should be some reward if they hit it big.

amach, would be very interested in hearing about your experiences at big pharma. I've interned at a life science VC fund and am now a consultant, so I've had at best a peripheral perspective. Be very happy to start a discussion on the pros/cons of a young person starting a career in either big pharma or "small" biotech.

That assumption is only true if you're dealing with small-pharma in the generics or specialty space (Arbor Pharma). You have much more upside at small-pharma/biotechs who could be dealing with oncogene therapeutics (Sangamo), rare diseases (NPSP), etc..

These are new areas of human clinical research: clinical finance needs to be structured differently, decision tree analysis will determine out-licensing strategies with much more complexity, therapeutic candidates can pursue INDs that VCs will partner with episodic care diagnostic strategies, etc... All things someone doing corporate finance at a small-pharma/biotech will be pursuing.

Yes there's a lot more risk, but the upside in the therapeutic gaining phase III data validation and eventually, FDA approval, will make you wish you could do it all over again. The science is certainly a thrill, big pharma hasn't realized the value of it for years and all the valuation sticks out with the out-licensing biotechs. I could care less if Merck can commercialize this oncology therapeutic, I value more about the company behind the therapeutic.

I would disagree here, large pharma has its own pipeline as well as outside partnerships. They have assets in pre-clinical stage so it isn't that much different from a small biotech in the sense of the science behind it. While gaining FDA approval is exiting, how does that exactly benefit the corporate finance analyst/senior analyst? I guess it would depend on what level of seniority OP is talking about but at that level, I don't think you will have significant equity. In the case of an M&A takeout, there is also the possibility of cost cuts which poses a risk to the corporate finance guy at the smaller company. My opinion is still to join small bio if you can participate on the monetary upside, unless your looking for the excitement of launching a new product through the various phases. Even that can be done at a large pharma.

To your point on clinical finance, this is very different from corporate finance. The clinical finance (decision tree plus other types of analysis) is done by statisticians at the firm i used to work at. From my experience they either have a masters or phd in stats or are very quant driven. They are also at the manager level and higher with no one at analyst/sr. Could be someone from a high science background too. Typically the corporate finance candidate will not fit the profile to join one of those teams.

Was disagreeing on the fact that at large pharma you wont be exposed to early stage assets assuming thats what you were saying. You are correct on all your other points. I am at a different firm now, small size middle market private company. Everything you said about the work responsibilities is probably very true across the board. What I was trying to get to is that if you do work for a smaller company, just make sure you are able to participate on the upside when it comes time. Just want to make sure there's a reward for the risk.

Sharing my experience, I took a salary paycut going to a smaller company mainly because the work is way more interesting and I have equity which grows meaningfully along with the company.