Luke Timmerman of Xconomy.com caught a speech recently by Seattle biotech guru Christopher Henney, cofounder of Dendreon, Icos, and Immunex -- not too shabby a track record, eh? Henney regaled the audience of investors with his five red flags of biotech. (Five Red Flags? Sounds like an amusement park...in Hell.) The last red flag caught our eye: "Family members in key roles."
Why does this ring a bell? Wait a sec: Seattle biotech Omeros just went public, the first "pure-play" biotech to do so in 18 months or so, and with a legal cloud over its head to boot. It got a lot of press, and not just from us. What's more, Omeros features the Brothers Demopulos. Gregory is chairman, CEO, and chief medical officer and Peter, a prominent local cardiologist, is a board member. The tally: Six board members, two Demopuli.
We had to ask Henney if he had Omeros in mind when he told the investor crowd, "If you see a board dominated by siblings, or a couple of siblings in key management roles, I’d run, not walk.”
He was gracious enough to answer our email, saying he didn't know "sibs" were involved at Omeros. He explained his dictum thusly: "The principle is that the presence of sibs at the top is a barrier to recruitment of top management and inhibitory to best management practices at all levels. Biotechs do not lend themselves well to family businesses in my opinion, and in particular in the public sector."
After pricing its Oct. 7 IPO at $10 a share, Omeros closed nearly two weeks later at $6.82.
Let's hear from you: Are you pro-family values or against 'em when it comes to building a startup? Are there any other examples out there of biotechs that keep it in the family?
It's a stretch to think that the market is reacting negatively simply because two brothers are involved in the company. Is it just possible that the company has poor prospects?
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