From "Pharma Bro" to someone's "dude" in an orange jumpsuit? - courtesy of the FBI!

Now then, it is unquestionable that after a rather slow start for many businesses (the older the school, the slower the adoption!), the inclusion of several new marketing tools collectively referred to as "social media" in inbound marketing campaigns has become much more the norm, rather than the exception. Companies everywhere now routinely use Facebook, Twitter, Google (or other) blogs etc. as part and parcel of their efforts to "fill the funnel" and bring customers to them, as opposed to going searching for them. 

Even YouTube, which historically was more of a music source, is now being utilised quite a bit, and I saw more than a few "Christmas cards" from major companies (including big pharma) thanking their clients and partners via an audio-visual greeting housed on YouTube, this year. The evolution of social media from a means to facilitate communication between individuals, into a tool for self-promotion of individuals, all the way to full-blown heavily budgeted components of marketing endeavours of major global companies, has been steady albeit occasionally fraught with difficulty. 

I have gone into such difficulties previously here, or on other blogs I run, but the problems usually arise when the individual makes the mistake of syncing all of their online activities (personal and professional) or when the individual does not fully comprehend the apparently fine (but actually massive) line between an individual's social media versus an organisation's social media presence. If you are going to spout something  risqué or controversial, make sure you do it on your Twitter account, not your company's; and even then - if it's readily visible? - watch out! 

We all know how Hollywood types who previously used the regular media (as well as social media) to get attention and gain notoriety for themselves, suddenly become all holier-than-thou and shocked when the beast turns on them, and comes back to bite them, when payback and feeding times comes along. Just ask Justin Bieber or Lindsay Lohan, among a slew of others. But that's the game, and social media followers quickly become the judge and jury when one steps out of line. Out of the blue, your formerly faithful followers all scream out in shock when you displease them with a major faux pas, and it transfers from social media onto TV screens with blazing speed these days, and everyone gets to see your dirty laundry before you woke up and realised you had any dirty laundry to, well, launder!

This lesson is probably resonating with Martin Shkreli today, after he went from being essentially a total unknown, certainly in pharmaceutical circles, to being a regular news item on major American news networks. Yes, this is the guy who took the helm at Turing Pharmaceuticals this year and glibly hiked the price of Daraprim several thousand-fold, and did so with both great ease and equal contempt for the howling hordes who now knew his name. Shkreli took total advantage of his fifteen minutes, even including taking to social media to spar with bigwigs the likes of Democratic presidency candidates Hilary Clinton and Bernie Sanders. 

The fact that this guy was still under scrutiny from being "let go" at Retrophin in 2014 makes one wonder why he insisted on furthering his high profile social media presence, not least because his questionable use of social media while at Retrophin had been an issue. Ditto their $65M lawsuit against him in late summer this year for alleged "misuse" of company funds. Unless he is as squeaky clean as he claims, it sort of beggars belief why he would draw more attention to himself, not least from two people of whom one is very likely to be the next American president! 

Next up, Shkreli took struggling KaloBios on board, and by rescuing them from imminent liquidation, he becamse the CEO of Turing and KaloBios simultaneously. The KaloBios stock took a hike (up 400%) more or less instantly, and probably everyone involved breathed a huge sigh of relief. In duplicate fashion, Shkreli made no bones about his intention to hike the price of KaloBios' Chagas drug, upon eventual approval by the FDA. Around this time he became oft-referred to as "the most hated man in America" on many news programs, but this is something that seemed to drive him harder, rather than cause much pause for thought. In fact, he oft-referred to himself as "the most eligible bachelor in America"; those two titles when put back-to-back just sort of say it all about this sad story.

This off-the-rails rollercoaster ride was bound to end badly, and it apparently did when Shkreli was arrested in New York on securities fraud, wire fraud and conspiracy charges, a week before Christmas. On Thursday morning, the 17th of December, he was the CEO of two biopharma companies, but by Friday morning, he had resigned from Turing and had been unseated by KaloBios. That's a date that will linger in his mind more poignantly than the 25th of December, I imagine. All of the notoriety (and not the good kind of social media notoriety) he had gained and built during the previous six months or so made him the thorn in the side of much more powerful individuals and groups, and he was asked to pay a price for it. 

There is a lesson for us all in this story, not the least of which is, as much as we might covet the CEOs chair and compensation package, there are pressures and temptations that come along with the celebrity, and we are not all equipped to handle them appropriately. There is a reason why most CEOs have more grey hair and wrinkles than you (or Shkreli) do - they get there based on seasoning, considerable experience and proven track records of success - and they didn't buy their way into the luxury leather armchair, either. 

In Shkreli's case, many had argued that the maturity was just not there, or in fact, that even when allowing for his mere 32 years of age, he was immature beyond even that tender age! In a somewhat incongruous-sounding but definitely hilariously appropriate aside to this story, just prior to his arrest in December, it was revealed that it was Shkreli who had paid as much as $2M for the single-copy collector's edition new album of legendary rap outfit Wu-Tang Clan. This is a whole new area of notoriety, and I guess this would have been a hoot to wheel out onto the coffee table alongside Kurt Cobain's (expired) credit card, when guests came over! The FBI even seemed to buy into the joke, with this hilarious Twitter post: 

FBI New YorkVerified account‏@NewYorkFBI

#Breaking no seizure warrant at the arrest of Martin Shkreli today, which means we didn't seize the Wu-Tang Clan album.

• RETWEETS29,598
• LIKES21,624

Joking aside, here's hoping that 2016 gets things back on track once more, and more legitimate pharma success stories are those that are making the news. However, it seems inevitable that pricing concerns and the apparent inappropriate hiking of drug prices by certain companies in the business are going to receive increased scrutiny in 2016, and I cannot help but feel that the Shkreli name will continue to get mentions due to that. From what we do know of him, that will be some form of comfort to him - whether he hears it in a correctional facility or elsewhere remains to be seen!

Some kind souls see Shkreli as an actual whistleblower in the over-pricing antics of certain pharma companies and their chief executives, but his various shenanigans look much more like a calculated self-promotion campaign that basically understood precisely the effect his various (social) media outbursts would have - i.e. to make him (in)famous. His claim today that the authorities came after him simply because of political pressure due to his historic, histrionic price hikes is just proof positive of what I alluded to above: when it comes to social media and instant fame, be careful what you wish for!

It's definitely "the luck of the Irish" when it comes to corporate tax shenanigans!

Pharmaceutical giant Pfizer recently announced that they had agreed to acquire botox maker Allergan in a true whopper of a megamerger deal - Pfizer offered around $363 a share for a total deal value approaching a staggering $160B - for which even the term "Monopoly money" doesn't do justice! It's the biggest healthcare deal ever and is also the #1 tax inversion reverse merge in history, making the combined company the #1 drugmaker on the planet. 

The newly minted "Phallergan" or "Pfizergan" will be led by Pfizer's Ian Read, who will be Chairman and CEO of the new entity, and not by Allergan head honcho Brett Saunders as had been rumoured for some time; Mr. Saunders will remain as President and COO, and  "will be serving in a very senior role focused on operations and the integration". Having said that, it is widely believed that when Ian Read reaches retirement in 2018, it will be Brett Saunders who will settle into the CEO's chair. 

Mega deals are certainly becoming the norm these days, with for example, the imminent merger of Dow Chemical and legendary DuPont for $130B, but such deals have been evident even in the beer business, vis-a-vis the $108B acquisition of SAB Miller by Anheuser-Busch InBev; even though such deals do irk legislators in terms of potentially being "anti-competitive", it is the tax inversion play that is currently creating a firestorm of controversy, particularly in the embattled pharmaceutical industry.

It's one thing for a Burger King to acquire a Canadian staple like Tim Horton's ($12B US) in order to lower its corporate tax rate, but that's coffee and burgers. It's not quite as serious or life-threatening as disease and drugs, where being seen to be ruthlessly stacking up profits at the expense of the sick and the old leaves a distinctly more bitter taste on the tongue. Bringing in sales in the tens of billions of dollars is one thing (and one which has not inandof itself caused much ruckus), but artificially domiciling an American entity on foreign shores for the sole purpose of tax avoidance is seen as insatiable corporate greed. 

In the case of the Pfizer-Allergan deal, the advantage for New York-based Pfizer is that essentially they become acquired by Dublin-based Allergan, domiciling them in highly desired Ireland, with tax breaks (from their current 25% down to as low as 17%) that will save them many millions per year. Allergan themselves are more of a New Jersey company, operationally, than Irish, but that's all in the game as they say in the trade. Regulators are watching these deals extremely closely and their actions have scared off some from proceeding, e.g. the $55B AbbVie-Shire deal that went south after a move by US Treasury Sevretary Jack Lew to deincentivise tax inversion deals. 

The timing is hardly ideal, what with the current furore involving individuals in the hot seat over pharmaceutical price-gouging, such as J. Michael Pearson of Valeant (themselves a previous tax inversion player) and the globally maligned Martin Shkreli of Turing Pharmaceuticals, among others. The scrutiny such types are receiving from both Congress and the bandwagon-jumping Democratic Presidential candidates (Hilary Clinton and Bernie Sanders) is having an impact on the industry in general, essentially rebranding the pharmaceutical industry as an avarice-laden tax-avoiding moneygrabber. 

So what's the reality? Well, working in the venture capital business, clearly I do not have a problem with corporations making profits (huge or otherwise) from expensive investments in hardcore R&D! That those profits come from sophisticated, safe and effective drugs for treating human disease is another no-brainer. As to the desire to avoid paying taxes to the country those drugs were discovered in, well, that is another thing entirely. But, and it's a big but, if the actions taken by giant corporations to avoid or lower their taxes are legal, then who can blame them?! If we could do it, would we?!

Such corporations employ a whole slew of people to help boost the bottom line, and just as they would not ignore advice from their own legal counsel on a strategic business matter, why would they be expected to not take advantage and profit from tax loopholes suggested to them, when the law actually permits it? The solution is very clear - if governments are not happy with tax inversion deals then they need to get off their backsides and do something about it via new legislation - in the meantime, Barack Obama going as far as to call the activity "unpatriotic" is hardly helpful. 

But it's funny how we hear that term way more in relation to big, bad pharma, than we do for the much more Obama-sanctioned and socially acceptable Facebook, Google or Apple; at one point it was reported that Google was paying a tiny five percent corporate tax rate, due to tax avoidance manoeuvres. But it's no secret (even if it was) that such companies (Facebook and Google in particular) are reputedly in bed with US intelligence-gathering systems, so then I guess it's okay if they pay minimal domestic taxes and have more offshore-stored cash than anyone in history. In the case of Apple, it was recently estimated that of their $200B cash stash, wait for it, as much as $190B is very comfortably stashed, offshore. The numbers say it all. 

Anyway, I think it's also an oversimplification to think of the Pfizer-Allegran deal as strictly a tax inversion play, per se, even if it comes hot on the heels of a failed attempt by Read to acquire AstraZeneca last year, in another (UK) inversion move. There is unquestionable synergy between the two companies' offerings, with Pfizer adding in Allergan brand names such as Botox, Restasis and Namenda onto their considerable roster, which includes Viagra, Lyrica and Lipitor, among many others. Additionally, Pfizer has been rumbling about splitting into two business units for a while now, and this merger would strengthen the argument for an established products unit separated out from their innovative business unit - a decision on that by Read is expected by Q4 2016.

Consolidation of big ticket players and the often-incurred tax benefits is a trend that is causing a lot of controversy in the pharmaceutical business, but it's unlikely to go out of fashion in the near term - I imagine that companies such as Merck (now relegated to #2 in the world) and troubled GSK may well be watching closely and wondering if they could similarly benefit - but if the US Treasury gets its way and enacts new laws in the interim, such megamerger deals may be scuttled. For those that are considering it, the government is watching closely and time may well be running out, so time is indeed very much of the essence!

Bio and Strasbourg felt like the perfect FIT last week!

I have been a little quiet over the last week or two, not least due to the fact that I was out of the country, in Europe, attending the 2015 edition of the BioFIT event which was held in Strasbourg this year. It's a really nice time of year to be in Europe, especially in Strasbourg, home to the biggest and most renowned Christmas market in France. Unfortunately, recent events in France (and elsewhere) caused security issues to be top-of-mind, in total contrast to the meaning and message of Christmas, but that has become more-or-less normal in today's changed world. 

You know, after attending the huge American BIO meeting in Philadelphia this summer, there was something charmingly relaxed about this smaller European version, even if entering the partnering hall felt something like a "deja vu" with the similar set-up! This year's gathering in Strasbourg hosted some 1,100 delegates and 900 companies from 30 countries, and included 70 speakers (of which I was one!) and 8 hosted events, all wrapped up inside a compact two day event. 

As you can see above, there were some pretty heavy duty sponsors and partners supporting this event, which underlines the fact that European life science business development and partnering is alive and well, and makes the trip worthwhile for us in that we can get to sit down with representatives of the European offices of various big pharma we normally meet at BIO in the USA (not forgetting BIO-Europe in Munich!). 

That there was a hunger for partnering at this meeting, even following so soon on the heels of the bigger meeting in Munich merely a month prior, was emphasised by the fact that there were several thousand meeting requests sent by the time the event kicked off. Speaking personally, it was tough to find time to attend (m)any of the plenary sessions due to the back-to-back meetings scheduled in my agenda - but that's a luxurious problem to have!  Apparently, there were over 2,500 one-to-one meetings at the event, which is pretty healthy for a couple of days. 

The various panel sessions were very cleverly housed inisde the partnering area itself, separated from but open to passers-by, which encouraged them to stop and have a listen, and maybe wander in to take a seat and partake of the lively conversation taking place. Our own panel on the funding challenge was most stimulating indeed, and even though we had plenty left to say, the 90 minutes flew by and we had to call it a day so that people could jump on the bus to the Bio party. 

Undoubtedly, either due to the fact that it was in Europe, or further that we were in Strasbourg itself, the pace felt less frenetic and frenzied than other bigger conferences, so it was both relaxing and productive at the same time. Breaks in the middle of the day were set up to maximise mingling and networking, which they did, and with enough time to not have to cut each conversation short so that one could meet others or grab some fresh herring and sauerkraut before they were gone! 

A pretty non-stop 48 hours of partnering it was too, in life science's very own version of speed-dating, with a whole slew of bright, orange-curtained meeting booths along the side, and people rushing out of one to go racing off to another, tablet or phone in hand, and bags slung over their shoulders. We need more baggage for this type of speed-dating, it seems, but life science is serious business and overall the event did nicely facilitate new introductions and no doubt the elaboration of previously established personal and business relationships. 

My only one gripe about the meeting scheduling system would be the apparently random fire that some people approach it with; the idea being to send out as many invites as possible to anyone who seems even vaguely relevant, and see what sticks. Before the event, I declined various invites reluctantly, feeling a little bad for doing so. Closer to the meeting, with my schedule filling up, I was quicker to decline and felt less reluctance to do so. And after racing to a few meetings to be asked "Did I invite you or was it the other way round?" or "I can't remember why I invited you, now!" - well, what can I say? 

I don't really understand why people would invite professional entities to come meet them in a booth with no clear intent, or not even making sure they remember inviting them! Trust me, it is the easiest way to ensure that they won't be accepted by those entities, again, and worse, they have a mark against them. Perhaps in some offices it is enough to show you have a full agenda to justify the trip's expense, but I would rather have a half-full 1-2-1 meeting agenda involving key potential partners plus free time to attend various sessions, than lose time in totally non-productive meetings. 

Lesson learned on that one - decline, decline, decline! After a hard day of partnering and panelling on December 1st, we did get a nice bus ride through old Strasbourg to the Bio party, where a selection of fine Alsatian wines and gourmet munchies were available in various rooms on two floors of a grand old mansion, and it was the perfect way to decompress after the travelling and its accompanying jetlag! A quiet walk by the side of the river back in the direction of the hotel was simply the perfect ending to a great day. 

Congratulations to the entire team @BIOFIT_EVENT for a most enjoyable and very productive time and stay in Strasbourg, and particular thanks to Ramona Pirv-Chicireanu and Claire Lesnik who helped arrange everything prior to my trip and made me feel most welcome and looked after during the event itself. After such royal treament, who knows, maybe I will see everyone again next year?! ;)