When Richard Steinhart joined biotech company BioXcel Therapeutics last year, he spent his first day in the boardroom of the law firm working with the company on its initial public offering.
There were 40 people in the room for the company’s "org" meeting — the initial meeting at which the lawyers, bankers, regulatory specialists, and company executives map out the IPO strategy. Usually CFOs are brought onboard before the company gets to that point; Steinhart had to get up to speed quickly.
"It was like grabbing onto an airplane taking off," Steinhart said earlier this week in a CFO Thought Leader podcast. "The CFOs are typically at the company several months before then, so they can get familiar with the company, begin to get the books and records in shape, and begin to work with the investor relations company to lay all that groundwork. The good news was, I had been around the industry for a while, and of the 40 people in the room I knew about half a dozen of them, so we all had a little laugh once the meeting was over," he said.
Drugs in development
The company is developing two immuno-oncology compounds that it aims to turn into drugs once its clinical trials and regulatory approvals are completed. Unlike many other biotech companies, it’s using an artificial intelligence platform to help it speed through the development process. For the company to be prepared once the drugs are ready for the market, Steinhart must act quickly.
"Our AI platform can sift through dozens of publications a day to look at all kinds of hidden connections for drugs that may have been partially developed, or may have failed in a development for a different disease," he said. "That saves tremendous amounts of time. I’ve seen companies take, for example, 10 years to go from discovery, license the discovery, through a phase 2 trial."
To prepare for market entry, Steinhart brought in a controller and assistant controller, both finance professionals whose competency and ability to work without micromanagement from him were critical because his attention, as CFO of such a small company, has to stay focused on broader matters.
"A CFO in a company like ours, you tend to have your hands in a little bit of everything," he said. "You sit in strategic meetings, clinical meetings, so you can understand what’s going on in all parts of the organization. So, therefore, you need really strong people in finance."
Steinhart said he’s learned over the years to avoid finance professionals he describes as masters of the universe, people who are looking to conquer the world, because what he needs are people who bring quiet competence and independence.
"You look for people who have some humility around them," he said. "I’ve found that, if you stick to [that], you’re really in good shape, and I’ve tried to instill that in the organization."
When he started, the company only had four employees. Today, his finance team is about that size, and he’s determining now what people he’ll need to add once the company’s ready to go to marker with its products.
"You have to think about how you’re going to sell the drugs," he said. "Are you going to license them to potential partners in other parts of the world? Are you going to sell them yourself in the United States? Are you going to partner with someone in the United States? All of these things have to be considered, and as you consider these things, you have to look at what your structure’s going to be in the future and what are the people you need internally to make sure these structures can be supported properly. So, we’ll have a much bigger group, depending upon which exact way we decide to pursue marketing of these products, so we build budgets around that, we build scenarios around that, and these things change fairly regularly. We need to add to the finance organization now so that we can do more analytical work."
Steinhart’s first two hires — the controller and assistant controller — he found through word-of-mouth referrals, his preferred hiring method.
"People know them, worked with them, know what their work habits are, and are able to give you a first-hand account of their abilities," he said. "Working with recruiters is necessary, but sometimes you don’t get a complete picture of someone."
His key take-away from his years in finance, he said, is to surround yourself with people who are smarter than you, and whom you can trust to manage the numbers.
"As CFO, you have so many things on your plate. You really need people who can take responsibility to get your statutory reporting done each quarter, your 10Qs and your 10K," he said. "You really need people you can trust and feel comfortable with so you’re not mired down in the details."