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When asked about his arrival at Dermira, CFO Andrew Guggenhime explains: “I was the 22nd employee, and today we have over 300.”
Along the way, the company executed an IPO, reached a market value of $1 billion, received FDA approval for its first medication (last June), and brought the offering to market (last October). Not bad for a five-year CFO sprint into the land of leading-edge medical dermatology.
Looking back, Guggenhime says: “When I joined Dermira, we had one other person on the finance team. We had no employees on our legal team. We had no employees on our IT team. And those were functions for which I was responsible. So we had to build those teams and begin by bringing in the leaders and building those capabilities so that we could not only serve the growing needs of the company internally, but also satisfy our obligations as a public company.”
Today, with his finance team in place, Guggenhime prefers to look forward as he and his team await the “readouts” from different clinical evaluations. “Preparing the organization for the readouts regardless of the outcome is an important task for us,” says Guggenhime, whose remarks seldom stray far from the topic of raising capital. “We have to access capital to continue to execute on our strategy, to continue to fulfill the vision of the company, and to continue to build the portfolio and to develop the treatments that will benefit patients,” says employee number 22. –Jack Sweeney ¤
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Guest: Andrew Guggenhime
Company: Dermira | DERM (NASDAQ)
Headquarters: Menlo Park, CA
CFOTL: What comes to mind when I ask for a finance strategic moment?
Guggenhime: Well, that’s a tough question. I was at a company called PDL Biopharma that was one of the more well-recognized area biotech companies at the time. And it was a very diverse company with a royalty stream as a result of intellectual property that the company had established. It was generating several hundred million dollars a year in cashflow to the company.
We had a very robust development-stage pipeline with multiple assets in development. We had a manufacturing facility here in the United States, and we also had a few commercial products on the market.
So it was a bit of a basket of different assets that resulted in less than the full value of the company being accorded to it by the public markets. We ultimately made the decision to effect a number of transactions that we thought in aggregate would deliver greater value to our shareholders.
So we ended up making a decision to sell off our commercial assets, sell our plant, and then split the remaining company into two separately traded public companies, with the aggregate goal of creating more value for our shareholders and allowing each company to flourish. It really has become a much more focused organization. So as I look back on that particular instance … How do you intersect strategy, finance, and operations to deliver a greater outcome for shareholders, certainly – which is a responsibility of a public company – but also, in the case of a biotech company, how do you allow that company to flourish, to deliver more value for patients?