Entrepreneurs are “big picture” people, often endowed with expertise in a specific field and the ability to envision an enterprise that would fill unmet needs or bring new benefits to an emerging or underserved segment of the marketplace. It is their passion and motivation that drives a start-up business through its initial stage, and in the most successful cases those qualities get infused throughout the organization. However, as the company’s financing needs change in later stages, passion and motivation must be supplemented with practical skill sets.

“As a company moves through different stages of development, often a need arises to reposition the management team and build some strength in areas needed to take the initial concept to commercialization,” explains Joe Warusz, vice president, finance, at Amicus Therapeutics, a Cranbury, N.J.-based biopharmaceutical company which recently closed a $55 million Series C financing.

Amicus Therapeutics is a clinical-stage biopharmaceutical company developing small-molecule, orally active drugs for the treatment of human genetic diseases. Its approach is considered paradigm-shifting because it uses pharmacological chaperones to selectively bind and “rescue” the defective proteins behind conditions such as Fabry disease (a lipid storage disorder caused by a faulty or missing enzyme; it usually begins in adolescence and can lead to increased risk of heart attack or stroke) and Gaucher disease (pronounced “Go-shay,” an inherited genetic condition that causes fatty deposits to build up in certain organs and bones and affecting less than 10,000 people worldwide). The company believes its unique technology represents the next-generation approach to the management of human genetic diseases and offers the potential to dramatically improve treatment options for patients.

With Series C, Investors Look for a Quality Return In the case of high-tech ventures such as Amicus, company founders tend to be researchers and scientists. As these companies progress through the development lifecycle, they need to bring in complementary skill sets. Investors—especially later-stage investors—in these companies generally are very savvy business partners, and financing candidates must be able to demonstrate program strengths, ability to meet timelines and other capabilities in a convincing manner in order to raise additional capital.

"When you look to raise $55 million in a Series C, you start to set a clearer picture of an exit strategy for investors, such as an IPO. Ultimately, the goal is to take the company public at some point. Everything we are doing today–with our business and our science–is helping to position us for an IPO over the next 12 to 18 months."

“Our investors know the biopharmaceutical space,” Warusz says. “In raising Series C capital, we had to demonstrate critical development within our various programs, where they stood in terms of clinical trials and what the expected endpoints were. It is incumbent on us to be able to demonstrate those things in terms that resonate with the previous experience our investors have in this field.”

Amicus recently initiated Phase II clinical studies of its lead compound AmigalTM, which is being developed as an entirely new approach for the treatment of Fabry disease. AmigalTM has been granted orphan drug status by the Food and Drug Administration for the treatment of Fabry disease, in effect barring competition from any other drug with the same active ingredient unless it is proven clinically superior for that disease. The company is completing preclinical development of AT2101, an experimental oral therapy for the treatment of Gaucher disease, and plans to initiate clinical studies in the first half of 2006.

Positioning Amicus for an IPO In Series C financing, investors are looking for evidence of a company’s ability to take the next big step toward commercialization, a process which calls for supplementation of scientific expertise with solid business skills. “When you look to raise $55 million in a Series C, you start to set a clearer picture of an exit strategy for investors, such as an IPO,” Warusz explains. “Ultimately, the goal is to take the company public at some point. Everything we are doing today—with our business and with our science—is helping to position us for an IPO over the next 12 to 18 months.”

Over the past year, Amicus has made management moves to help it meet that challenge. John Crowley, named chairman and CEO in January 2005, and Matthew Patterson, its chief business officer, both have extensive experience on the business side of the biotech and pharmaceutical industries. Warusz, who joined the company in August 2005, has 25 years of experience in financial and operations management in pharmaceuticals, medical devices, biotechnology and public accounting, most recently as vice president and treasurer of a publicly-traded genomics research and testing firm.

Balancing Passion and Business Strategy Given the fact that all of Amicus’ current investors opted to participate in the Series C round of financing, which was led by new investor Quaker BioVentures, it seems clear that the company’s strategy reflects what its savvy business partners were hoping to see. But Warusz stresses that as important as the company’s strategic moves on the management and business side may be, there is no diminishment to the important role passion plays at Amicus.

“To be successful in this environment, you need an organization that is highly motivated, energized and committed to the programs. You really have to have a passion for what the company is looking to do,” he says. “Quite frankly, what we are looking to do is a pretty significant shift in the treatment of many human genetic diseases, looking to go from enzyme replacement therapy to drug delivery. One of the big things contributing to our success in the Series C was having in place a management team with a proven track record, which enabled us to present the company as business-led, but science-driven. The passion and commitment are still there, and that’s evident on an organization-wide basis.”

For more information, please contact Joe Gitto at jgitto@gellerco.com.