A Look Behind The Scenes

Insight by

Natalie Holles, CEO of Third Harmonic Bio, and Effie Toshav, Partner at Fenwick & West, join Cowen’s Biotechnology Analyst, Yaron Werber, M.D. They discuss the respective roles of the board and C-suite when it comes to setting strategy and creating value, as well as the importance of diversity, transparency, and flexibility in management teams.

Natalie and Effie also share their experiences as women in biotech, discuss the value of cultivating an enduring peer network, and provide an inside take on what enables successful M&A.

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Transcript

Speaker 1:

Welcome to Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.

Yaron Werber:

I’m Yaron Werber, Biotech Analyst at Cowen, I’m very excited to be joined by Natalie Holles, CEO of Third Harmonic Bio and Effie Toshav, partner at Fenwick & West. In this episode called A Look Behind The Scenes, we will discuss how decisions are made at the C-suite and boardroom, how M&A happens behind the scenes and how the role of women is evolving in the biotech industry. Natalie is the CEO of Third Harmonic Bio. She has more than 20 years of executive leadership, business development, corporate strategy, and commercial experience. Prior to Third Harmonic, Natalie had several roles at Audentes, culminating as President and CEO. Prior to joining Audentes, she served as Senior Vice President of Corporate Development at Hyperion and held business development roles at Kai Pharmaceuticals in immune and Genentech.

Yaron Werber:

Effie is partner at Fenwick & West. She serves as strategic council to life science clients and issues ranging from company formation, public offerings and financings, spinouts, business development, M&A and general corporate governance. Some of her corporate clients included Audentes, Denali, Juno, [inaudible 00:01:36], and Morphic and funds such as Frazier, New Enterprise Associates, Red Miles and [inaudible 00:01:44]. Prior to joining Fenwick & West, Effie served as Senior Vice President and General Council at Sarepta and General Council at GlycoFi.

Yaron Werber:

Ladies, it’s so great to have you with us and thank you for joining us. I feel like I’ve known each of you for many, many years across your various roles. And so it’s a real pleasure to have you. I appreciate it. You’re both very experienced in working closely with boards setting and executing strategy. And I imagine that all boards have certain amount of commonality, but also some differences about how strategic decisions are made. So maybe Natalie, just to start with you, how informed are biotech boards about the factors that can drive success or failures in strategy and how much input do they really provide into the C suites when they’re setting the strategy?

Natalie Holles:

Hmm. I think the particular level of knowledge or acumen that a board has is very personality and experience dependent. Your investor board members see a breadth of experiences. And the idea is that you’re operating director’s experience depth. And between those two, you can triangulate in and get sufficient variability and experience to help management drive good decisions. In terms of how the board can help management set strategy, I think setting strategy is fundamentally a management exercise that is to be sort of vetted and pressure tested with the board.

Natalie Holles:

If you set up a really effective board meeting and really focus on the key strategic topics, you can get great input from your boards. And that’s what I definitely try to do in working at my presentation materials and my agenda for my board meetings is use the time to get the richest input on the most important elements of the business.

Yaron Werber:

And maybe just in your experience, sort of more broadly throughout your whole career, do boards consider alternative strategies before choosing a certain path? How didactic is it versus the C-suite doing their best to true strategy and then convincing the board and getting really the board sort of fine tuned input, but the strategy largely is driven by the C-suite without a lot of input from the board?

Natalie Holles:

Oh, that’s an interesting question. I think it varies over the life cycle of a company. I think in the very early days of a company, a board can be heavily involved in strategy development. And then as the company matures, as the leadership team sort of settles into management of the company as the enterprise scales boards, maybe then pull back into more of a governance mode versus a sort of direct strategy setting mode.

Natalie Holles:

But I think the reality is that strategy in biotech is a game of micro adjustments that happen on if not a daily basis, a weekly basis. And so you can set a strategy, but then based on your own data, on competitive dynamics, on market dynamics, you have to be willing to be nimble. And since boards only convene on a quarterly basis, that defacto makes strategy and management exercise.

Yaron Werber:

And maybe to keep you on the spot, Natalie, what about then on the C-suite? Because the C-suite ultimately owns strategy. And then obviously the board oversees that, but how often, and to what level do operating teams really consider are we on the right path?

Natalie Holles:

Oh, I think that’s probably very operating team dependent. In my operating teams, we think about it all the time. Our north star is value creation, the most efficient path to value creation for patients and for shareholders. And to make sure that you are staying on that course, you need to ask yourself that question every time you convene. I think that’s probably a result of the time in which I grew up in this industry and the first half of my career were very lean times, not unlike what we’re experiencing now. And so you had to be disciplined in your thinking, in your resource allocation, but I won’t generalize and say the experience of my operating teams is the experience of every operating team. I think it varies.

Yaron Werber:

Great. Effie, now you’ve had a breadth of clients that have been very successful and breadth of clients obviously that over time that maybe have had more harder times. As you think about what separates success of failure, what do you see from your vantage point at the board level?

Effie Toshav:

Well, not surprisingly, Natalie already covered it. It’s having the right people around the table with a diversity of backgrounds and different viewpoints for one. So not having this kind of group think, but having enough ideas around the table that there’s going to be a diversity of views. I’m repeating what Natalie said, because I happen to think it’s right, but maybe from a different vantage point, having the right process in place. So having board materials ahead of time, having open and honest discussion without people getting defensive, without people creating silos on the board, without sort of in the corner discussions not involving everybody.

Effie Toshav:

That kind of process doesn’t lead to having a full information set on which decisions can be made. And finally, really being able to be nimble and being able to adjust to different market circumstances. Just because the plan said we’re going to go public in the summer of 2023, and then we’re going to get acquired, it doesn’t work that way. Good companies take in all the information, they discuss it, they make a decision, they execute on the plan and they make adjustments as they need to. So while there are many different playbooks, many different ways to reach success, return value to shareholders and to patients, every company that does well has those three things in common.

Yaron Werber:

And what about when you’re involved in boards, when programs are risky, how much discussion is there about sort of dual tracking the future and asking yourself, gee, this program, should we proceed or do we owe it to ourselves to really move in a different direction, maybe even cancel the program early, pre data?

Effie Toshav:

Again, at the risk of repeating myself, it’s part of the same overall discussion. If the company to be successful has to do the thing that is going to create the most value, that is always the length to which everything has to be evaluated. So the decision of go it alone, do it with a partner, do a territory deal. It’s all has to be seen through the lens of how are we going to be most successful and the only way to make truly good decisions around that is to have the right people at the table, having the right type of discussions.

Natalie Holles:

In an open manner.

Effie Toshav:

In an open manner.

Natalie Holles:

Really important comment that Effie made. You can have all the right people in the room. But if the conversation is stifled, if there are sort of competing hidden agendas, if there’s any sort of toxicity in the room, then you’re not getting the benefit of-

Effie Toshav:

Of everyone’s experience.

Natalie Holles:

Of everyone’s experience and everyone’s perspective.

Yaron Werber:

Because that’s one of the things a lot of times, I think, increasingly on Wall Street, we are much more than I would say five, 10 years ago are getting questions focused on the board and is the board fully attuned to where the company’s going? Why aren’t they canceling, let’s say, this program or prioritizing a second program? And a lot of times we wonder, obviously it’s going to be when times are good, you can continue to kind of move ahead, when times are not so good sometimes you’re a little bit more worried on coming out with bad news, even if it potentially improves your long term outlook. And so this is definitely an area that we’re getting a lot of probing in into.

Natalie Holles:

I don’t know if I’m allowed to ask questions back to you-

Yaron Werber:

Absolutely.

Natalie Holles:

… but I’m going to go ahead and do it. Is the question about the board or is the question about companies being willing to make tough decisions? I guess I’m trying to understand where the question is coming from. Are they asking for boards to do this more than they would’ve thought in more high on the hog times, or where’s the question coming from?

Yaron Werber:

I think the questions are probably emanating from two angles. One, to a certain degree, who really manages or oversees the company, because increasingly in the last three, five years, you’re seeing companies getting created and then boards hiring the CEO, as opposed to maybe historically on smaller companies, let’s say, where there was a founder and then the board kind followed the founder. And then secondly, I think it emanates [inaudible 00:11:36] a view on wall street where perhaps the management team is not always doing what’s right. [crosstalk 00:11:42]

Natalie Holles:

And so where’s the adult supervision? Is that what you’re saying?

Yaron Werber:

That’s right.

Natalie Holles:

Yeah. Yeah. And therefore your question was, what were you asking?

Yaron Werber:

And I would say, and especially [crosstalk 00:11:56] that there’s so many first time biotech CEOs.

Natalie Holles:

Oh, I think that’s right. That’s what you get when you have this glut of capital coming into our industry that is spurring fast and furious company creation and operating talent becomes the limiting reagent. You’re going to dilute the talent and the experience in the C-suite. It’s Toshav’s law of biotech thermodynamics. There’s just no way you can get around that. And so it is the question, are the boards stepping in and somehow providing that supervision?

Natalie Holles:

Well, I think the other thing that you have to appreciate is that when there’s this much company formation going on out there, these guys are busy and now they’re sitting on like 8, 9, 10, 11, 12 boards. That’s sort of the other element of this explosion in the number of companies. And so I think you’ve got experienced directors that are spread very thin, and then you have operators who might be very talented, but there’s no replacement for experience in this industry. I think it’s a systemic problem that you can’t say, oh, it’s under experience management or it’s director’s not paying attention. It’s just one of the byproducts of this massive influx to capital.

Effie Toshav:

And on your specific point, sort of which I think was centered around kill it now, rip the bandaid off, give the bad news and move on versus put a little bit of lipstick on it and see what happens. That is an example of where people with less experience sometimes make the wrong decision. It takes a long time to understand stand that credibility is the most important currency anybody has. It is hard won and easily lost. And there is a real strong incentive, especially with type A people that everywhere, but in our industry, especially to just say, well, it’s not dead yet. And we can put a spin on this. What is missed often with people with less experience is the real under-appreciation of the importance of just being straightforward, maintaining integrity, building credibility.

Natalie Holles:

I think that’s true. And I also think it’s actually harder to kill programs when the market is frothier because you have further to fall if you deliver news that people don’t like. I think now is a great time to be killing programs-

Effie Toshav:

Because ho cares? How much lower could you go?

Natalie Holles:

When trading at half cash is the new trading at cash, this is a great time to kill programs because the relative pain might be great, but the absolute pain is [inaudible 00:14:57]. But those are deeply rutted behavioral patterns that are difficult to change. And I think we all have a little bit of sort of this denial going on where we think that every week is it going to turn if we hit the bottom is what felt normal for the last six years going to come back? And I think that it takes a while for sort of the reality of what these markets mean for operating plans to actually sort of trickle down and get pulled through.

Yaron Werber:

Yeah. Look, what we saw in February of 2021 was not real. And I contend to what we’re seeing now, just open the screen now, that’s not real either. [crosstalk 00:15:52] market [crosstalk 00:15:53]

Natalie Holles:

What’s real, Yaron? Can we ask you that? Where’s the real?

Effie Toshav:

The

Yaron Werber:

Yeah. Companies trading at fractions of cash and losing 70% market cap in six months. That’s not real. Companies going up IPOing and then quadrupling in value for no reason. That’s not real either. What’s real is value creation, getting awarded for it and debating the fundamentals of the company based on the future outlook, not based on frothiness and groupthink and thematic investing. That’s not real. And in biotech I think we’ve been… But we see these massive shifts over time and they usually are in tandem between bull markets and bear markets. And life happens when you’re making other plans. What’s really in biotech is that when things are not feeling real. Maybe Effie, just for you, what’s the biggest learning for you in your careers about value creation from an operating viewpoint, from the company side?

Effie Toshav:

You know I thought about this a lot.

Yaron Werber:

This is the one question that’s going to get us back to a bull market, Effie, so you got to get this right.

Natalie Holles:

So nail it.

Effie Toshav:

Nail it. There is no one playbook. You have to sort of be disciplined enough to look at all the facts, have the right people around you to make the right decisions and then be able to be flexible enough to change if you need to. That is a learning that comes with over 20 years of experience. When one first starts out, you think that this is the way it always is. And when I first started out, I worked, early in my career, I worked at Protein Design Labs. We could charge people $10 million for humanizing an antibody. Now your grandmother can humanize an antibody in her kitchen and you can’t charge anything for that, but the blueprint back then was you do some licensing deals, then maybe you get acquired, maybe you go public in the middle, maybe not, but that was kind of the thing.

Effie Toshav:

And then in 2008, there were a bunch of single asset companies and everybody wanted to be in LLC and they were going to set themselves up from the beginning like [inaudible 00:18:25] so that they could just do partnerships and sort of collect money and distribute it on the milestones and the royalties. And then 2012 came and everybody wants to be a fully integrated biotech company and raise a ton of money and go public. and the reality is that there is not one size fits all. One has to look at the intersection of the science and the business and the legal and say, this is the right modality for this idea. So I would say that is my biggest learning.

Yaron Werber:

And Natalie, what about you?

Natalie Holles:

Well, Yaron, as you might have seen, I recently wrote a guest blog post for Bruce boots, summarizing the learnings of my 20 plus years in this industry. And while counselor Toshav is over there giggling, it was a great exercise because it really forced me to distill down my learnings on how to create value in four steps. Step one, I’ve always been a big believer in start at the end and work backwards, make sure that there is a viable need out there in the market that you can uniquely address. And then every decision in research and development should have the north star of making a medicine that adds value and can be accessed by patients. Number two, even if you have a big vision, you can’t conflate big vision with big plan.

Natalie Holles:

I think you always have to start small, execute well, earn your way into doing more. That’s how you sort of spend rationally. That’s how you can sort of incrementally increase value and not live your life continuing to raise money to deliver on the promises that you made in the last financing. I’ve lived that way and it’s painful. Number three, you’ve got to make tough decisions. When it’s time to kill a program, you got to kill a program. When you have exceedingly talented person who’s an asshole hopefully I can say that, you got to let him go, and really make tough decisions because number one, it’s in the best interest of the business, and number two, your employees can smell bullshit and leading with integrity and intellectual honesty is really important.

Natalie Holles:

And then finally, you’ve got to raise the money. You can’t time the markets. There’s no such thing as non-dilutive financing. We are in the drug development business, it is expensive and it’s rife with risk, but the only way we create value is to continue investing and keep going.

Yaron Werber:

Yeah, that’s awesome. And I feel like everybody should learn those four concepts and make them their bible when they take company public, or when they first join a CEO, frankly.

Natalie Holles:

Well, thank you. I of course think it’s wise because I wrote it, Yaron, but I do think that what we experienced for the last six years, it infused us all with a sense that this is easier than it actually is. And I think having some humility about this and realizing that it’s hard and you’re going to have to do hard things in order to win is really sort of the key ingredient to success.

Yaron Werber:

Doing hard things is always easy in hindsight, but it’s always the right decision.

Natalie Holles:

Yeah. Do you know that Teddy Roosevelt man in the arena quote?

Yaron Werber:

No.

Natalie Holles:

Oh, it’s a great quote, but it’s basically about credit goes to the man who is not afraid to fail, who might be face down in the dust with blood all over his face, but he gets up and keeps going because there’s, there’s valor and value in the attempt. And that has always resonated for me because I’ve had really, really dark moments in my career. And I’ve had high highs too, but like all of them, the sum total of them, it gives you wisdom.

Yaron Werber:

Yeah. And the episode of this title is a very apropos pro name, Look Behind The Scenes. And it’s always the first advice to a new CEO is hurry up and get your first blow up out of the way because never the first one that works as much as we hate to admit it. So this is a biotech deal making podcast series. I know everybody’s absolutely loves to talk about M&A even though there isn’t a lot of M&A so far, at least in the middle of April, 2022. So maybe Effie to you and then Natalie, what leads to decisions to sell a company as opposed to continue going along? And you’ve been involved in several fairly high profile exits recently, Effie, on your client side. So Effie, can you talk about that? Did their [inaudible 00:23:46] plan to get acquired?

Effie Toshav:

Well, one should never plan to get acquired. You run your business. This is an old adage and it’s true. Companies are bought, they’re not sold. And that really has to be where everybody is grounded or the process doesn’t go well. In terms of the decision, that’s often pretty clear. Most M&A happens with a convicted buyer that puts an offer on the table that is enough to get management board attention. And then it’s just an exercise in getting the price to where you want it and making sure that the people are taken care of, but in the M&A that I’ve been involved in, the price was right and was designed to be right, and was the right thing that was viewed to return to the shareholders. It was the right decision.

Effie Toshav:

There are other kinds of M&A, but at the end of the day, it’s what is in the best interest of the company and of the shareholders? And from a legal and a business perspective, that is what guides the decision. Are there questions behind that question because those offers are designed to be enticing. This is a very different market. And I think my prediction would be this market will make M&A very difficult, because there are lots of companies that are out there have done financings at three times their current share price and it’s very hard for acquirers to come in and pay three to four X premium on a share price.

Effie Toshav:

And that’s what they’ll have to do to get them above the last financing. So I think actually the more interesting questions are going to come now.

Natalie Holles:

I agree with that.

Effie Toshav:

Because when you’re trading at a high and you’re getting a hundred percent premium over that for M&A, it’s a pretty clear cut-

Natalie Holles:

[crosstalk 00:25:56].

Effie Toshav:

Yeah. Okay. But I think we’re heading into a more interesting time. Yeah.

Yaron Werber:

In most cases, you’re saying companies are bought, they’re not sold, that means there is an incoming bid. In your experience, is it more often to just get an unsolicited bid or is it equally or more often for the companies to actually go out and shop themselves and do a process?

Effie Toshav:

I have never seen a successful outcome to a company, as my good friend, Natalie Holles, and very wise CEO would say putting on a sandwich board and saying it’s for sale. Big pharma has its own set of goals it needs to achieve for their pipelines, for whatever they’re trying to accomplish that year. And it has very little to do with any decision by biotech to put out a for sale sign.

Effie Toshav:

They are operating on their own set of bureaucratic incentives. They will decide this year I want a precision oncology company. We’re going to look around at the precision oncology companies. We’re going to choose the right one. And if we want it, we are going to put an offer on the table that they can’t say no to. That’s the way good M&A gets done because the buyer is convicted, they really want it, and the seller’s motivated too.

Natalie Holles:

I think it would be interesting to go back and look at all of the 14 D9’s from public acquisitions and do an analysis of the frequency with which the ultimate acquirer doesn’t prevail because [crosstalk 00:27:49]

Effie Toshav:

Those data exist, and 99% of the time, it is the first bid-

Natalie Holles:

That’s right. It’s the first-

Effie Toshav:

The first bidder almost always wins and there’s almost rarely a second and a third bidder for something that is pre-commercial. Once you are commercial, you can have a true auction because then it’s just money, then it’s just an asset, and whoever values that or thinks they can make the most of it can come in, like a pharma [inaudible 00:28:23] or something later stage. But before phase three, it’s sort of beauty is in the eye of beholder. You can get somebody else to the table, but it’s going to be the buyer that kicked it off, that loved it the most, that needs to have it, that’s going to win.

Natalie Holles:

Yep. That’s how [crosstalk 00:28:44]. Yeah.

Effie Toshav:

The real kind of tremendous returns, blockbuster M&A comes from those types of inbound offers.

Natalie Holles:

Yep. And when you get one of those, you shouldn’t futz around, you should just go.

Effie Toshav:

Put your head down, execute.

Natalie Holles:

Yeah. Get it done.

Yaron Werber:

And Natalie, in your experience, it sounds like you agree and it’s unsolicited, but does it precipitate out of strategic discussions or partnering discussions or is it at times completely unsolicited?

Natalie Holles:

Well, Effie and Fenwick have been by my side for every acquisition I’ve been a part of, I believe, so my data are her data on this, but no, what I’ve learned, if I had a number five on my blog post, it would’ve been there’s no such thing as building a company to sell versus building a company to do it alone. You build a great company and if someone wants to come along and own it, you react to that insofar as the strategy of every company I’ve led has been, let’s build a great company, the M&A comes out of the strategy. But one conversation I do not enjoy having that often comes up is should we try to sell this thing? Because that’s just not how it works.

Yaron Werber:

Great.

Effie Toshav:

And just to add, I completely agree with that. Back to your question about does M&A result from partnership discussions? Yes and no. And here’s where the 14 D9’s I think are a little bit misleading because in every background section of every description of a merger, you will see the parties had discussions with each other for months, blah, blah, blah. But that is misleading. Often it’s just a casual BD meeting at the lowest levels.

Effie Toshav:

And not some hot and heavy partnership discussion that then flips to M&A because often those are coming from two very different parts of a huge organization. Low level BD discussions has nothing to do with 200% premium offered to buy the company. So while the two can happen at the same time, one does not very often just automatically flip into the other. There’s some intervening, something that happens.

Natalie Holles:

A hundred percent agree.

Yaron Werber:

Great, which is frankly, in many ways again, and I’m glad we’re really sort of probing all of that, it’s in many ways, very counterintuitive to what most people in on the Wall Street side are thinking who they think that M&A happens precipitously very quickly based on a need from the buyer, like a phase three fails and the next week they’re going to buy X, Y, Z company. It just doesn’t work that way, or that a company is shopping themselves, and they’re going to get acquired imminently because all biotechs are shopping themselves.

Natalie Holles:

I think-

Yaron Werber:

That’s not really what happens [crosstalk 00:31:53].

Natalie Holles:

I think B, it doesn’t work that way. A, it does sometimes happen precipitously, the actual action of, hey, we got a letter, but there’s generally a lot of strategy that’s going on internally within the buyer to get to the point that you decide, hey, we want to get into gene therapy or we want to buy a precision oncology. But from the experience from the seller side is, oh my God, we just got a letter.

Effie Toshav:

Right. The letter is a culmination of a lot of work on the buyer side.

Natalie Holles:

Yep.

Effie Toshav:

And often it comes out of the blue.

Natalie Holles:

Yep. And then for the seller, it’s time to get to work. Well, you’ve been getting to work, but now you’re, you’re running a different process.

Yaron Werber:

So one of the other topics that I think is very topical and very important, and I’m glad both of you agree to participate in this podcast is really the role of women and the growing prominence of the role of women in biotech, yet still less than half the seats in the C-suite or boardroom are women. And correct me if I’m wrong, based on your experiences, but that’s definitely the prevailing data. So maybe to both of you, and this is obviously a lot more personal, but what has been your experiences as women building your career in the last 20 years? 15 years ago must feel very differently than now.

Natalie Holles:

Sure. First of all, we’re going to start our own podcast on this, Yaron, so we’re not going to use all material here, but we’ll give you some snippets.

Yaron Werber:

You got to give you the top five snippets though.

Natalie Holles:

Yeah I’m not going to scoop myself. So I think the comment about the relative dearth of women in leadership and board positions now is related to what it was like 15 years ago. Because when you want diversity in leadership and on boards, you can’t snap your fingers and ort of create this pool of super experienced, well track recorded people of various backgrounds. 15 years ago, it was really hard to be a young working mother that wanted to keep working. You had to make a number of, in my mind, (bleep) dichotomous decisions between your career and your personal life. And I think the nature of those decisions and the lack of flexibility at that time forced a lot of women to make decisions that impacted their careers, such that you don’t have as many women that are seasoned that kept going in the early years.

Effie Toshav:

Sorry to interrupt. But think about what our lives would’ve been back then even if we had Zoom. It took the pandemic to give us real operating Zoom and we didn’t have [inaudible 00:34:56]

Natalie Holles:

We didn’t have that.

Effie Toshav:

[crosstalk 00:34:58] We didn’t have a mother’s room anywhere where we could take conference calls and pump. Yeah, we probably can’t say what we did to get around those obstacles on this podcast, but those were obstacles that we had to overcome.

Natalie Holles:

They were real. When I wanted to work from home a couple days a week after my first daughter was born, I had to quit my job as an employee, forfeit my equity and my benefits and consult back to the company in order to make that work. When I came back from maternity leave after my first daughter was born three months on the dot because that’s what you did. One of the things that I really relish now that I’m in charge of my little company, but I at least get to sort of set the culture for my company is that we lean into flexibility.

Natalie Holles:

And I realize leaning in is even a loaded term. I embrace the flexibility that Zoom provides. We are intentionally hiring on a geographically dispersed basis so that I can access the best talent in C2. I set very high expectations of myself and my team, and then leave people to execute in a manner that works with their lives. It wasn’t like that 15 years ago. So my hope is that 15 years from now, we won’t be having this discussion about what leadership teams and boardrooms look like because everybody will be there.

Yaron Werber:

Right. So, maybe just a quick follow up, because that’s been driven by the pandemic. So this is not even about the growing rise of women in biotech, but rather this has to do with flexibility, which is critical and affording to source best talent throughout the country. That frankly leads into another conversation, which is not specifically on topic of what I just asked, but that’s about how do you grow culture, especially from the ground up when everybody’s around the country and they’re not in the same facility is often?

Yaron Werber:

Even though I believe even preexisting right before the pandemic about half the workforce was typically remote at any one point anyway, but that’s maybe a different question. Okay. So flexibility obviously is critical. That’s one. What else? What about acceptance? What about equality? Not just pay, I meant voice prominence, gravitas in the room, which I guess must also come from experience. And then also what about role models and mentorship? Can you [crosstalk 00:37:49] address all those?

Effie Toshav:

We didn’t have those.

Yaron Werber:

Nope. None [crosstalk 00:37:53]

Effie Toshav:

There’s something empowering about making your own way. And I don’t want to speak for Natalie here, but I will, because we did this together.

Yaron Werber:

We did it together.

Effie Toshav:

We put our heads down and we did our jobs and we had to be three times as good as everybody else. And we were rewarded for it. And that is a two decade body of experience that we lean on now. And when we tell people things, they listen to us because the track record speaks for itself. So I’m grateful for it. I’m grateful for the resilience that we had to have to get through that. We have no shortage of stories of-

Natalie Holles:

There’s so many good ones.

Effie Toshav:

There’s so many.

Natalie Holles:

I think one thing I will say, everybody asks about mentors and mentorship. How do I get mentors? I have some mentors that have been with me throughout my career, a handful that I still check in with occasionally. But I think the richer relationships, the ones that have been more impactful have been my peer relationships, the people that I’ve grown up with in this industry. Effie at the top of that list.

Natalie Holles:

But I think about other people with whom I’ve grown up in this industry, Angie Yu from Amunix, Jeremy Bender at Day One. These are people that we’ve supported each other throughout and their advice was often more on point at any given point in my career because they were living the same thing to. This day I talk to those guys about what’s going on and I need advice on this or that.

Natalie Holles:

And I find that is the most useful input that I get. So I would say to you, people of younger vintages, cultivate your peer network, because those are the relationships that are going to go with you. As you know, your own, because you’ve made the guest list. We have a dinner every year at JP Morgan of people of our vintage.

Yaron Werber:

That’s the best reason to go to JP Morgan [crosstalk 00:40:24]

Natalie Holles:

Those relationships from around that table are some of the most valuable from sort of I get a lot out of them, but they’re also just deeply gratifying relationships and friendships that are some of the most wonderful things about 20 years in this industry.

Effie Toshav:

It’s hard to kind of construct mentorship. Those relationships come from just being in the trenches with people and working through things. That’s how you develop those bonds. As a lawyer and as an advisor, I’ve tried to help cultivate that by that event that we do at JP Morgan. It used to be that when people hung out at the Weston, everyone would hang out in the ladies room. They’d be like four of us there, four women, and we’d all sit around and that would kind of be where we connected.

Effie Toshav:

And I kind of took that idea and I started this event at [inaudible 00:41:27] the Sunday night before that conference, and it’s become just a very nice… We just hang out, have hors d’oeuvre’s, they do a fashion show of fancy clothes and me and Natalie comment on why we would never wear those things, but it is a fun evening. And I think there is a role for things like that, that isn’t sort of content we are now going to teach you how to be a woman in the boardroom because being in the boardroom is being in the boardroom, but there is something to be said for get togethers and in person able to just kind of see each other and catch up that is helpful.

Natalie Holles:

Community more than [crosstalk 00:42:09]

Effie Toshav:

Better set-

Natalie Holles:

… or mentoring. Community is what… That’s been kind of the bedrock of my career all the way through, all the way back from when Effie and I did our first deal together in 2006, when we were both pregnant with our oldest daughters, negotiating with a team from Japan and really just freaking them out that they had to negotiate with two big pregnant ladies. That was a bonding experience that-

Yaron Werber:

[inaudible 00:42:44] experience for you for the Japanese negotiating team?

Natalie Holles:

I can’t [crosstalk 00:42:44] I’m sure they went home talking about it, but for us-

Yaron Werber:

[crosstalk 00:42:54] got wrapped up in a heartbeat. They’re like get us out of here.

Natalie Holles:

Yeah. Exactly. [crosstalk 00:43:00] work that advantage, you’re kidding yourself.

Yaron Werber:

Did it feel lonely?

Natalie Holles:

There were a lot of times it felt lonely coming up when I did business development, which was very male dominated. And so I felt isolated, I felt stereotyped. A lot of times I felt underestimated, which I would use to my advantage actually. And I’m sort of with Effie, I developed a lot of grit sort of coming up the way that I came up and it taught me a lot about all elements of the industry, but just kind of how to navigate it with confidence. And one thing I learned is you have to be who you are, you can’t sort of try to torque yourself into some persona that you think is going to be more effective because the most effective person you’re going to be is when you’re being yourself.

Yaron Werber:

Right. Be yourself, everybody else is already taken.

Natalie Holles:

I like that.

Yaron Werber:

Effie, what about you? You had to navigate both the biotech operational community, well, and the lawyer community, too.

Effie Toshav:

Here’s where being Israeli really helped. I really didn’t care. It never occurred to me. I have always been so passionate about my work and always felt like I found the perfect job for me. People pay me to be obsessional. So I always felt tremendously grateful for that. And I was going to work my hardest to do my best and serve my clients.

Effie Toshav:

And I think the operating roles really helped there too, because I knew what it was like to be on the other side of the table. So I really felt like I could be of great service to my clients. And that has always been such a privilege and a just source of joy for me. So all the other stuff I didn’t have to think much about. It was inconvenient pumping and doing conference calls in airport bathroom stalls, but okay, I got some great stories out of it.

Natalie Holles:

Yeah.

Yaron Werber:

That’s for another time.

Natalie Holles:

That’s for our podcast.

Yaron Werber:

That’s for your podcast. Effie, what advice would you give young women in biotech now?

Effie Toshav:

It’s not different from advice that I would give anybody of that generation coming up and interestingly, it’s so it’s so different now, at least at Fenwick, my male associates or even partner, they will take six month paternity leave and they’ll divide it up and take two months in the beginning and four months at the end.

Effie Toshav:

I never took one day of maternity leave. So I think these changes are all wonderful and it’s all allowing for a much more flexible, balanced life. And I would just say, you can’t have it all, all the time. And I would say that to men, to women, et cetera, and only do this job if you really love it because it’s hard.

Yaron Werber:

And Natalie, what about you?

Natalie Holles:

I agree with Effie. I don’t think that my advice would be gender specific. I think my advice for anyone starting out in this industry is actually what my advice has always been, which 26 year old Natalie could have used, which is be patient. This is a tough industry and there’s no substitute for experience. And when you’re starting out in your career, you’re all intellect and no experience. And your stock and trade is applying that big brain to stuff that maybe you feel is beneath you, but the quid as you get a seat at the table and you get to start watching and experiencing it.

Natalie Holles:

And then over the lifetime of a career, the balance shifts, and then you end up where I am, which is where my experience way outstrips my intellect. And I say that partially tongue in cheek, but not really because most of my decisions are based on pattern recognition. I don’t sort of brain my way through decisions. I’m connecting 20 years of the good and the bad and the ugly and mapping that to the situation at hand. So my advice is be patient and wear sunscreen.

Yaron Werber:

Great. And wear sunscreen. I love that. Okay. We’re now getting into my favorite part of the podcast, something a little personal and something humorous.

Natalie Holles:

Because pumping and airport restrooms was not-

Effie Toshav:

That wasn’t good enough. Yeah.

Natalie Holles:

Yeah.

Yaron Werber:

[inaudible 00:47:55] Good enough. But that’s going to be on your podcast. Tell me one thing about you that no one knows.

Natalie Holles:

That no one knows or that your average listener wouldn’t know?

Yaron Werber:

That the average listener… It’s up to you. And after this, everybody will know.

Natalie Holles:

I dropped out of medical school at Harvard after three days.

Yaron Werber:

What? I had no idea. How did I not know that?

Natalie Holles:

Oh, see, I stumped you. Now ask me why three days?

Yaron Werber:

Why three days?

Natalie Holles:

Because I couldn’t get a flight home on the second day. True story.

Yaron Werber:

And so what happened? What could have possibly happened in 48 hours?

Natalie Holles:

I shouldn’t have gone in the first place, but there was too much momentum behind it, but I got there and I remember dropping my duffle bag in my little dorm room and it’s sitting there for two days. I couldn’t unpack it. And it was just this intense feeling, again, sort of wisdom rather than intellect. It was this intense, physical feeling that I wasn’t supposed to be there. And I had to get out of there and it. And it took me a while to unravel why that was the case. But I picked myself up and I flew home.

Yaron Werber:

Was your roommate upset, like they’ve done [inaudible 00:49:07]?

Natalie Holles:

I had a single. It wasn’t about the roommate.

Yaron Werber:

More personal.

Natalie Holles:

Yeah. Oh actually-

Effie Toshav:

It’s not you, it’s me.

Natalie Holles:

It’s not you it’s me. All right, there you go. I stumped you.

Yaron Werber:

Effie, what about you?

Effie Toshav:

All right, here’s one. I don’t even think Natalie knows this. I was six months old during the Yom Kippur war and I was left at home with the Tunisian neighbors because my parents were at the front. My mom was a doctor in a mass unit. My father was fighting and they rubbed olive oil all over me multiple times a day to keep away the evil eye and bring me good luck. And it

Natalie Holles:

I did know that.

Effie Toshav:

[crosstalk 00:49:47] worked.

Natalie Holles:

I love that story.

Effie Toshav:

There you go.

Yaron Werber:

Wow. Effie, I was also six months old at the Yom Kippur war, but I’m pretty sure my mom did not rub olive oil all over me.

Effie Toshav:

Yeah. And you got to stay with your mom. I got-

Yaron Werber:

I got to stay with my mom.

Effie Toshav:

… dumped with the neighbors.

Yaron Werber:

I bet you there was better food if they were Tunisian’s than Polish people.

Effie Toshav:

But I was six months old.

Yaron Werber:

Yeah, I know. [crosstalk 00:50:11]

Effie Toshav:

What was I eating?

Yaron Werber:

Tunisian food is awesome. That’s good to know. Natalie, what’s your dream job? Compensation aside, career aside.

Natalie Holles:

My encore career is I want to be one of those people that writes S1 drafts for excessive amounts of money, because I really enjoy writing. And I just think I could charge a premium and deliver a premium product. That’s not my [crosstalk 00:50:36]

Yaron Werber:

I love that. I absolutely love that. There’s a reason why they charge an excessive amount of money. It’s a freaking pain in the (bleep) to write one of those.

Natalie Holles:

I’ve run the numbers on this, Yaron, I could make the [crosstalk 00:50:49]

Yaron Werber:

You have to do a lot of them, Natalie.

Effie Toshav:

She’s that good.

Natalie Holles:

I’m that good. I would be a ski guide. That’s what I would do

Yaron Werber:

I definitely would’ve guessed that. She’s an amazing skier for those of you don’t know. Effie what about you?

Effie Toshav:

Well, I need more clarity. I was taking it as encore career. Is it encore career or dream job?

Yaron Werber:

Dream job. It’s whatever you want it to be. How’s that?

Effie Toshav:

Well, what I have now is my dream. I was meant to do this job. So I trade this experience. So I’m going to answer the encore career. And I may do this because I am very committed to it. I would like to open a luncheonette where children come after school and I help them with their homework and I educate them on things. I think they should know that they’re not learning at school and I feed them grilled cheese, chicken soup, et cetera. And I dispense my wisdom at the same time.

Yaron Werber:

Are you busy around 5:30 on most weeknights? I can put you on Zoom with my kids.

Effie Toshav:

That’s perfect.

Yaron Werber:

And Natalie, all the S1’s are going to go to you.

Natalie Holles:

Yep.

Yaron Werber:

This is like community service. These are not dream jobs.

Natalie Holles:

I think mine’s more lucrative, but Effie’s is probably more fulfilling.

Yaron Werber:

More fun. Yes.

Natalie Holles:

I don’t know what that says about us, but [crosstalk 00:52:13] my dream job, it’s how I’m going to spend my time.

Effie Toshav:

But honestly you have your dream job. That’s, I think, the point. We love what we do.

Natalie Holles:

That’s true. I do love what I do. And that is very gratifying. As a mother of three daughters, Effie also has three daughters and a son, but as a mother of three daughters, I am grateful that I have a career that I am so passionate about. And that gives me so much fulfillment. And I think I’m good at. In that sense, it is a dream job and I get to do a fair amount of skiing, so [inaudible 00:52:57]

Effie Toshav:

Win win.

Natalie Holles:

Win, win, win.

Yaron Werber:

You got your dream job. Well, Natalie and Effie, thanks so much for joining us. This was absolutely terrific. Really appreciate it. And great to see you

Natalie Holles:

So fun. Thank you for having us.

Effie Toshav:

Thank you.

Speaker 1:

Thanks for joining us. Stay tuned for the next episode of Cowen Insights.


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