Cream of life science entrepreneurs’ first venture was selling doughnuts
Andy Richards is arguably Cambridge’s most prolific currently active life science entrepreneur and his expertise is much sought after as chair of some of the UK’s most exciting BioMedTech businesses.
It’s fair to say that Dr Richards is a graduate of the school of hard knocks as he shared with some distinguished colleagues – such as Sir Chris Evans and Peter Keen – the dubious pleasure of building Cambridge’s formative biotechnology sector. His pain has led to gain for scores of life science entrepreneurs who have followed in his footsteps.
Richards Minor was entrepreneurial from his school days. He recalls that he and a group of classmates discovered that the local baker always made too many cream doughnuts.
“At the end of the day they would virtually give them to us and we started selling them in school the next day. Any we failed to sell, which by this time were stale, we would save until the following day for sale to the staff at a premium price, of course.”
Such enterprise was to tail Dr Richards into his professional career. Following his time at ICI (now AstraZeneca) he joined PA Technology and says he worked on fascinating biotechnology projects for governments and both large and small companies throughout the world.
“During that time, I did some work for some of the emerging US West Coast biotech companies and found their whole culture intoxicating,” Dr Richards recalls. “That experience made me decide that I would like to be more involved in startup companies. One of my multinational company clients at PA – in about 1990 – had a new technology that it was entirely ill-suited to develop and commercialise.
“I looked at spinning this out with some of the inventors and with Venture Capital money. We had the capital committed but the company decided to close the technology down rather than allow it to fly. It was a salutary lesson and one, unfortunately, that recurs today. However, that really made me commit to finding and being part of a new startup venture.”
Andy had also been working with Chris Evans and Peter Keen at Enzymatix and an area of their business – the use of enzymes to solve asymmetric chemistry challenges in pharmaceuticals – “looked particularly exciting.”
He says that the financial position of Enzymatix was unstable – but that merely added to the excitement – so he joined, in its dying days, to create Chiroscience (originally Chiros) alongside Chris and Peter.
With help from others, they raised venture capital finance to create Chrioscience ‘the chiral pharmaceutical company’. Andy was 31 at the time. He says: “I was heavily influenced by my experiences dealing with those early US biotech companies. The team at the original Affymax of John Diekman, Leighton Reid, Alex Zaffaroni and Steve Fodor were impressive for their audacious vision coupled with their ability to execute.
“I was also impressed by Tim Barberich and Bob Bratzler and Sepracor who tried really hard to get me to join them in Boston at that time. It seemed that everyone in those formative years had enormous energy and optimism and were set to change the world – and that of course included Chris and Peter.”
His early grounding in business principles left him well equipped to build a business. Dr Richards says: “I had done quite a lot of work on strategies and business plans whilst at PA for many different ventures and technologies so I had a pretty good grounding in the theory and format.
“But the test of a business plan is putting it into action. The great thing about the original business plan at Chiroscience was that we had two! One plan was used for financing and we had another more ambitious one that we intended to follow when the time was right – and because of success and regulatory changes sooner rather than later.”
Chiroscience was funded originally with £3 million of venture capital from Schroder Ventures (now SVLS), Apax and 3i. It went on to raise a further £10m of venture and private money before completing – in 1994 – one of the first UK biotech IPOs.
“Everything seemed new in those days,” says Andy. “The original financing was, I believe, Kate Bingham’s first deal in venture capital and the IPO was the first under new London Stock Exchange rules to allow high growth, loss making companies to float. Financing is always hard and intense and full of moments when you think it won’t happen and sometimes wish it would go away. I am afraid the same is true today but it is a rite of passage that every entrepreneur has to go through.
“Chiroscience was full of big personalities – in the team, on the board and amongst the investors. It was rarely comfortable and discord was more often the norm than aligned harmony, but it was full of energy.
“I am not sure that I solved any of these people problems; I just lived through them and survived. However, the intensity and the conflict was energising and fostered a sort of manic creativity and desire to succeed which drove the company through its many changes of direction and business model.
“Of course, Chiroscience moved into developing novel drugs and that creates real jeopardy when products succeed or fail – more often fail – based on clinical results that can neither be predicted nor controlled. In addition, the business model at that time of licensing to pharma at a time when they were all merging and could drop programs on the turn of a card created highly stressful business discontinuities that one had to live with. Chiroscience almost died on a least five occasions.
Dr Richards added: “As the business evolved, I was lucky to have built around me a really great team who were able to counteract my weaknesses, tolerate my idiosyncrasies, and exploit my strengths.
“As a group, together, we overcame so much. That ‘band of brothers’ culture is addictive and stays with you. It is no surprise, and has been a huge personal pleasure, to go on to build a whole series of companies with those I worked with at that time – including Julian Gilbert, Derek Jones, Robin Bannister, and Peter Keen.
“Chiroscience had many achievements and made many mistakes. It was the first UK biotech to have its own originated drug registered in its own name in both Europe and the US. It bought into genomics for all the right reasons but at too high a price and at too early a time. However, it got new therapies to patients – which is what counts – and made money for investors and started the careers of many in the cluster.
“Even now it still has exciting innovations from those days coming through development such as Romosozumab, the anti sclerostin antibody for osteoporosis, now owned by UCB and Amgen. Chiroscience was acquired by Celltech in 1999 leaving most of us exhausted and our shareholders better off.”
Dr Richards says that, in common with many companies at that stage, everyone at Chiroscience did a bit of everything and roles and titles usually meant less than achievement.
“The board of management of Chiroscience evolved at a frightening pace and both Chris and Peter went on to other ventures, leaving me as the only founder that was there from the beginning in 1991 to the end in 1999 – something that still surprises me and many that know me.”
Dr Richards is pleased that the backdrop to building a business in Cambridge has improved so radically.
“The network in UK biotech was very small when Chiroscience was founded and most of our interactions were with large companies on a global basis – in fact it always seemed easier to deal with companies abroad rather than those close by and this included our UK based global pharma companies, whose foreign (usually US) business units were often much more welcoming than their parents.”
The merger of Celltech and Chiroscience formed a £750 million UK listed company in roughly equal value from the two constituents. Dr Richards recalls that, post this point, the share price moved very positively such that Celltech could buy Medeva to become the leading UK biotech company at that time. Subsequently Celltech was acquired by UCB. One might have thought that life after Chiroscience would have proved less demanding for Dr Richards but he drives himself hard.
“After the Celltech deal I had promised my wife to take a year on holiday and this I singularly failed to do. Within four months – alongside many of those from the Chiroscience network – I was founding and angel investing in a new set of companies and by the beginning of the Millennium, I found myself as CEO of Arakis, CEO of Vectura and on the board of Amedis Pharmaceuticals and Biowisdom.”
In his new iteration did he see any of the same old problems regurgitated? “The challenges of financing companies and of success and failure driven by unpredictable biology and pharma partnerships remained, but I had learned the importance of teams that really work together and that made a huge difference. Teams are what make companies successful and fun.”
Dr Richards prefers to look forward than look back – “I have never thought it healthy to look back or try to retrace my steps and say ‘what if’. But he has an optimistic outlook on behalf of the new generation of biotech entrepreneurs as long as they keep a sense of perspective.
“I would advise them not to plan too much or be too impatient. Build a strong platform from which to jump – in my case it was a PhD, corporate research experience and broad business knowledge gained through PA.
“The world changes really quickly and opportunities will come so you can jump from that platform. It’s a question of timing, courage and then execution. If you never attempt something that might fail you will never realise your potential.”
Is the UK environment receptive to supporting entrepreneurial ventures?
“I am an optimist and I think things are pretty good, particularly at the moment. The culture in the UK has changed and in Cambridge this culture is at its most refined, purposeful, supportive and dynamic. It truly is the ‘low risk environment for an individual to take high risk’ that makes joining a new venture in Cambridge a better bet than elsewhere.”
Dr Richards would love to see more Cambridge companies scale and he doesn’t believe that ambition is the stumbling block to scaling, either in Cambridge or the UK.
“Actually most of the decisions to sell early for founders and shareholders have been entirely rational,” he believes. “I do wish that more of our companies would scale, particularly in the healthcare space, but for that we need two main things.
“The first is a London-based stockmarket with long term investors that is fully informed of and engaged with the exciting prospects that new technologies can bring. It needs those public market investors who will support companies through the £100m, £500m and £1 billion stages of company evolution. I think that this is beginning to happen and IPOs such as those from Circassia, Horizon Discovery and Abzena are encouraging.
“The second even bigger challenge is that our home market for health has to be ‘open to innovation’ and want to engage particularly with home grown innovation. If you were to do a SWOT analysis for UK healthcare innovation, the NHS would be writ large as a Strength, a Weakness, an Opportunity and a Threat!”
• The Cambridge Torchbearers initiative is sponsored by Horizon Discovery, a pioneer in the global race towards personalised medicines.