Startups in the biotechnology space, which include psychedelics companies, are usually top-heavy with medical doctors and Ph.Ds – sometimes a group of trained scientists headed up by a chief medical officer or just a CMO acting alone.
But the CMO position has become increasingly important to any psychedelics company and its future success. That position is tasked with not only understanding the complexities of clinical trials, but also the complexities of running a business that could be struggling to find a product in a highly competitive endeavor.
In other words, the CMO today needs to be a super chief executive officer with big-time science chops who can strategize a winning formula for success in a tricky industry fraught with trapdoors.
Most companies in the psychedelics space might consider themselves at too early a stage for this role, according to business research organization Bedford Transearch. But, given the rising competitive nature of the psychedelics marketplace, organizations should be looking to engage and secure top CMO talent, proactively.
“Companies that wait too long on filling this role could find themselves too far down an undesirable path, one with a reduced likelihood of a favorable commercial outcome,” Bedford Transearch concluded.
There can be problems when a C-suite structure puts the wrong people in the wrong place. In the psychedelics industry, its relatively common that CMOs become de facto CEOs as well because this is a medical science business. Maybe that CMO’s medical drug discovery is what the business is based on. Maybe that CMO has deep expertise in clinical trial development. It seems like a logical structure for them to be running things, especially within a smaller business.
But are they ready and able to be both a business leader and an intense lab guy?
They’ll need to update their skills and follow the lead of others in the health care industry. Yesterday’s CMO in a health care institution got by with an engaging personality and a sense of camaraderie with his or her peers. Today’s CMO is encouraged to obtain degrees in business and management, or certification from organizations, such as the American Association for Physician Leadership, that have developed to support and train doctors as business leaders.
So who are the psychedelics CMOs today, really, and what should they do?
According to life sciences executive search company LiftStream, there are three hybrid strategies for CMOs in biotechnology businesses such as psychedelics:
- The CMO as the notable figurehead for the company, representing them in the external market with key stakeholders, who will have limited responsibility for the operations of the company and for leading people.
- The all-in-one CMO, where the CMO is the de facto leader of the development organization. In this context, the CMO assumes responsibility for most of the internal and external activities across both clinical development and medical.
- The focused CMO, who does not assume responsibility for the development activities but instead is charged with leadership of the medical organization, including drug safety, regulatory, medical affairs, and quality.
Dr. Hans Eriksson, the chief medical officer of HMNC Brain Health, a clinical stage biopharma company that has raised $43.7 million, told Psychedealia that he knows two CMOs who have become excellent CEOs.
“I think it’s a bit about the characteristics of the person,” Eriksson said. “If you’re a good CEO, you need to be able to grasp the market situation as well. You cannot only be the doctor. Of course, you need to work with the patient’s best interest in focus.
“But you also need to understand that there is a market reality out there and do acceptable trade-offs. Never jeopardizing safety, of course, but understanding that at the end of the day, you’re developing a medicine that must be perceived as attractive to patients and to prescribers.”
Rather than trying to do two roles as CEO and CMO in a psychedelics business, CEOs express an increasing desire for closer collaboration between the CMO and the chief strategy officer (CSO), according to Dr. Manoj Pawar in a piece for the Healthcare Leadership Institute. As part of this relationship, the CMO is being asked to become involved in identifying potential new partners, managing external relationships, managing key external groups for engagement and performance, and creating new venues for participative management around value – essentially a new type of CEO.
It promises to be a complicated landscape for any newly minted CEO.
“From a psychedelics business perspective, as more decriminalization and as more legalization efforts move forward to be able to allow people to access psychedelics, we’re going to see a greater and greater growth of the gray market, or of consumers using these psychedelics outside of a pharmaceutical channel,” Bethany Gomez, managing director and co-founder of the Brightfield Group, said during a presentation at the reMind Psychedelics Forum in Las Vegas in November.
“It’s something that has to be thought about, that has to be considered, as part of your business strategy. So, if you’re looking to bring that pharmaceutical product to market, how are you going to compete if the products on the black market or on the gray market or through state legal markets are an order of magnitude cheaper? How are you going to compete? How are you going to position your products?” she said.