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LIFESCIENCELEADER.COM APRIL 2014 41 Harlan Contract Research Services (CRS) is a leading global provider of preclinical and nonclinical contract research services. Many of the world's top pharma, biotech and medical device organizations trust Harlan CRS . Our team is driven by decades of proven expertise and a passion for conducting breakthrough science. We understand how to best support your program — we know the value of close relationships and the role communication plays in building them. The complexit y of your research doesn't have to define how difcult it is. When you've got hard work to do, make it effortless with Harlan CRS. Make it Effortless with Harlan CRS +41 (0)61 975 11 11 MakeBiopharmaEfortless.com C H E M I C A L • A G R O C H E M I C A L • H U M A N H E A L T H • A N I M A L H E A L T H PURCELL: We look at 700, and we do 10, and a few work. It's a hell of a business. (Everyone laughs.) George sees them, too, at Celgene. As the CEO, you're just trying to build your company, and one of the elements of strategy is to understand the world around you, not just to operate in your little niche. Too many times people come in, and they just don't see the big picture. KOBERSTEIN: So you can't fault any com- pany for going out and saying, "We're going to do this." It's really up to the investors to judge. GEORGE GOLUMBESKI: Recent history tells us that whatever the market climate, how high is the tide or how low the tide is, not all companies go up or down exactly the same. I'm trained as a scientist, I'm a long-term BD guy, and though I don't have the sophistication in market theory, my view follows from everything I've seen working with many small companies. In some ways, my business is really not dissimilar from the investors'. We have all these companies come to us. We invest in some of them, we buy some of them, and we are very motivated to work with them because we want the drugs, not the equity appreciation. Some are going to fail, and some are not going to fail, so you have to have a portfolio because that's the business we're in. But all these market reactions and contortions! People understand — investors, the mar- ket — that developing a real, innovative, safe, and efficacious drug is very difficult, and any hint that there's a real drug in the works, the prices spike. But suggest there may not be a viable drug, they crater. Just look at recent events: We do a deal with OncoMed. That's a good company. We're very happy to have gotten a deal. The stock price goes up 100 percent in one day, but the data haven't changed. Or we pay a milestone to Epizyme, and the stock goes up 40 to 50 percent in one day. It's because people believe a drug will come out of the deal. Of course, I would also say, historically, a deal with a large, respected company validates to the market that the smaller company has a real drug in development. MOCH: And it attenuates the perception of risk. Again, if you go back to the simple capital-asset pricing model, such a deal actually changes the perception of risk, and so the value should change. GOLUMBESKI: But companies going it alone, like Ariad or Sarepta, experience the most volatility, even though many people are eager to believe in their products. Over the long term, I believe the real value will become clear, but at any one moment there's a hell of a lot of emotion out there. B i o _ I n v e s t o r _ F o r u m . i n d d 7 Bio_Investor_Forum.indd 7 3 / 2 4 / 2 0 1 4 3 : 5 8 : 1 3 P M 3/24/2014 3:58:13 PM