It takes five to 10 years for emerging biotech companies to bring a product to market, so they have a lot of growth spurts and contractions along the way.
When they begin preparing to launch and commercialize a product, though, everything changes. They must get ready to scale fast.
That’s the status of Elevar Therapeutics, a biopharmaceutical company that has offices in Utah, California, Ireland and South Korea.
“We were at a point where we were sort of ‘post-contraction,’ so the systems, processes and people were too small for where the company had grown and where we were headed,” Elevar Therapeutics Chief Financial Officer (CFO) Wade Smith told PYMNTS. “We’re going to launch product into the market and commercialize next year, which means building a salesforce and doing a lot of marketing — not only are you doing research and development and that kind of spend, but marketing.”
Getting Ready to Scale
That means the organization needs the right infrastructure for tasks like managing a greater volume of contracts and handling expense reporting that’s compliant with Sunshine Act regulations.
Smith has been working to put that infrastructure in place as he’s been with Elevar for about a year and has been CFO for four months.
Interviewed for the PYMNTS series “A Day in the Life of a Digital-First CFO,” Smith said one of the first upgrades he implemented was a cloud-based contract management system from LinkSquares.
This provides a documented workflow, showing who approved the contract and when. In addition, with this tool, the Elevar team can tag contracts and can search for key words and phrases in past contracts.
“You can then line everything up and look across your continuum of what kinds of terms you have — what kind of right-of-first-refusal terms, payment terms or any of that kind of thing — to be able to help judge where you are and where you should be going,” Smith said.
Boosting Efficiency With an ERP
Elevar is also implementing a NetSuite enterprise resource planning (ERP) solution. The system was to go live a few days after Smith spoke with PYMNTS.
The new ERP will bring together on one platform the many touchpoints that are involved in non-payroll spend. Elevar’s previous systems were not integrated, so an accounts payable (AP) clerk had to enter the same information into two systems that were running side-by-side.
“Converting to NetSuite, where purchasing, AP approval, workflow and the [general ledger (GL)] are all in one spot was a huge time-savings for us,” Smith said.
Smith has also been working to ramp up the company’s financial planning and analysis (FP&A). This has been a matter of new processes rather than software. Elevar added team members who understand pharma and how to project long and short term. In the future, it may add a forecasting bolt-on for NetSuite.
Anticipating Future Growth
Another challenge Smith has been confronting is the environment of rising interest rates. This is a challenge for all emerging companies, including a pre-commercial biotech like Elevar for which it takes five to 10 years to bring a product to market.
Over that period of time, as interest rates rise and fall, the changing weighted average cost of capital (WAAC) will affect a company’s valuation by the market.
“Everything about your story could be the same, and the time horizon could continue to shrink, but the market changes that WAAC just based on relative interest rates,” Smith said.
Looking ahead, Smith said he is looking forward to seeing the company’s new ERP go live, saying the efficiency of the system will help the team, while its ability to expand will allow the company to add other capabilities as they’re needed.
“Having an expandable ERP, I think that’s really key for us, to be able to bolt other things on as we’re ready to absorb them — ready to take on those tasks,” Smith said.
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