Thursday, March 18, 2010

SR One's Revolving Door

The times are apparently changing--again--for the granddaddy of biopharma corporate venture, GlaxoSmithKline's SR One. Two independent sources confirmed to our sister publication "The Pink Sheet" DAILY that Russell Greig, a 30-year veteran of the drug maker and most recently managing partner and president of SR One, has quietly moved on. Details about both the timing and reason for Greig's departure remain unknown.

It's been a revolving door for SR One's leadership since 1999, when the group's original founder, Peter Sears departed. (If you are keeping tabs, Brenda Gavin (now with Quaker Bioventures), Barbara Dalton (now with Pfizer Investment Group), and Joyce Lonergan have all held top honors at the firm over the years.)

Still the news of the lastest decampment is a surprise, coming barely two years after Greig stepped into the top job and orchestrated an ambitious retooling, launching what seemed at the time to be SR One 2.0. For starters, Greig cleaned house, rebuilding--and bolstering--the investment team to create a 10-person powerhouse that could actively syndicate with traditional and strategic investors alike. In addition, Greig, with the apparent blessing of GSK's CEO Andrew Witty, launched a $500 million venture fund with the two-fold mission of making external investments while simultaneously spinning out start-ups and incubators founded around intellectual property from GSK itself.

Indeed, it's the close ties between Witty and Greig that cause one to wonder at the sudden change in SR One's leadership, especially given the current starring role corporate venture is playing in biopharma financing. (If ever there was a time to be the top dog at one of the preeminent strategic venture groups, now, when traditional VCs are mired in their own financial troubles, is the time.)

The 2008 shake-up, which pulled SR One out of the drug maker’s R&D organization, had Greig reporting directly to Witty, a move that at the time seemed to indicated both greater prominence for the corporate venture group as well as increased latitude regarding investment decisions. In a 2009 interview with START-UP, Greig emphasized “the investment committee is a two-man team: Andrew [Witty] and myself.” In addition, Greig and Witty removed certain investment restrictions that had made it tough to be an equal player in venture syndicates, including stipulations that the group could put no more than $5 million in any single investment round or a total of $50 million into a company during its lifetime. All of which was done to ensure SR One could “participate at the same speed or faster than our [traditional] VC brethren, Greig told START-UP at the time.

And for much of the last year, SR One has certainly be doing that. According to Elsevier's Strategic Transactions database, the group invested in seven privately-held companies last year, including the anti-infective developer Rib-X Pharmaceuticals's $25 million Series D, the novel vaccine play Genocea Biosciences’s $23 million Series A, and cancer/inflammation drug developer Aileron Therapeutics’s $40 million million Series D.

Greig is currently listed as an active board member of both Genocea and Rib-X. It’s not certain at this time who from SR One will replace him on those boards. Whether or not SR One will finally take a larger role in outlicensing home-grown technology is also a mystery.

We are certain that Greig will be missed--even if his departure has no lasting impact on SR One's investment philosophy or ability to do deals. Greig is well regarded in the clubby world of VC for his intellect and his financial acumen. Moreover, SR One, like its strategic counterparts Johnson & Johnson Development Corp., the Roche Venture Fund, the myriad Novartis Venture funds, and Pfizer Investment Group (among others), has played an invaluable role in the past year in financing early stage companies at a time when traditional VCs have been strapped for cash and the IPO market remains moribund.

Image courtesy of flickrerThomas Hawk used with permission via a creative commons license.

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