Q&A

Pharma CFO Anthony Doyle Plans for Uncertainty

"People have a higher appetite for risk, knowing that they can do a lot of good," the BioCryst Pharmaceuticals CFO said.
Vincent RyanApril 21, 2022

“If we tell you something, it’s because we believe it, and we’re neither sandbaggers nor are we going to lead with our chin and put out outrageous goals,” said Anthony Doyle, CFO of BioCryst Pharmaceuticals, when asked to describe how the publicly held biotech has established credibility by executing on projections.

In the pharmaceutical industry, where product development takes years without any guarantees, that’s no easy feat. Doyle has at least two things going for him in an industry with highly uncertain outcomes: one, he spent five years at a company that provides clinical development services to other biotechs. Two, earlier in his career, he spent three years in General Electric’s vaunted financial management program. One observation about his time at GE applies just as well to pharma: “The expectations are super-high. So, you don’t want to disappoint anybody.”

Doyle joined Durham, N.C.-based BioCryst Pharmaceuticals, which focuses on oral drugs for rare and serious diseases, in April 2020. The company has been around for a while. In 2014, it brought to market Peramivir, an influenza treatment. The company has drugs in various stages of development.

In my interview with Doyle, I asked him to assess the planning and capital-raising challenges pharma CFOs face.


Anthony Doyle

CFO, BioCryst Pharmaceuticals

  • Hired: April 2020
  • Previous employers:
    • Worldwide Clinical Trials
    • World Book (Berkshire Hathaway)
    • GE Healthcare

This interview has been edited for length and clarity.

VINCENT RYAN: What’s different about being the CFO of a pharmaceutical company?

ANTHONY DOYLE: I know it can be a cliché, but it takes a special breed of person to work in health care. The level of purpose it gives the people, and the impact it has on people’s lives. People feel strongly about it, and it puts a bit more pressure on what you do in a good way. 

 [In pharma,] one of the biggest things is the huge amount of risk-reward — more drugs fail than succeed. … People have a higher appetite for risk, knowing that they can do a lot of good. … You spend a lot of time and money investing in drugs that may not ultimately work. And the FDA [Food & Drug Administration] has a low tolerance for drugs that have an adverse safety impact or won’t be beneficial to patients. You might invest for eight years in a drug from commencement of research to identification of a molecule through regulatory approval. It is a very long cycle. You can’t just pivot into a new molecule, a new indication [for a drug] … And BioCryst has been through ups and downs. [Employees] wear it like a badge of honor that they’ve held out through the hard times.

How do you develop financial plans when there’s that much uncertainty?

DOYLE: It becomes very catalyst-driven. When will you get data from specific events, whether it’s a phase I, phase II, phase III readout, or discussions with the FDA about what you need to do next?

From a planning perspective, there are multiple potential outcomes depending on the efficacy or success of a trial. You end up having multiple forecasts. What if [the trial] goes great? What if it goes OK but not great? What if it doesn’t go that well? And what if it fails? With multiple forecasts in play, you have to be nimble and agile. … Raising cash is always a big deal. It’s easier when the company is doing well. And thankfully, at BioCryst, that has been the case for the past couple of years. 

Because of how the pharmaceutical industry works, do you have to raise as much money as possible when trials are going well?

DOYLE: We stay within a collar of what is too much versus what is too little, both of which have the potential to be equally detrimental. … I don’t want to go out and raise too much capital; the cost and dilution may be too much. At the same time, I don’t want to raise funds every three to six months. We look at it from a strategic perspective: what are we funding for? What are the next major catalysts for the business? 

If you raise too little, you’re constantly hampered by people’s belief that you’re always going to need more money and you’re going to be coming back to the market. That overhang is not valuable for the business. … We’ve gone from being a company that was somewhat hand to mouth to allowing the commercial and R&D teams freedom and flexibility. They don’t have to worry constantly about our ability to raise money.

So you raised $350 million in November 2021; most of it was royalty financing based on a formula of future sales, the second such deal the company has done. Are these deals advantageous?

DOYLE: One of the things that left a scar was we did a [common stock] offering in August 2021, and it didn’t work. The market was exhausted, and we ended up pulling the deal. We said we were in a strong cash position, which we were, but we also had better options. So we worked on this deal with Royalty Pharma and OMERS Capital Markets [the Canadian public pension fund] and raised the money at a very good cost of capital.

It meant finding partners who believed strongly that the returns on a long-term basis would outweigh the [upfront] cash. … These [royalty] deals are becoming more common. … The providers are very selective about what they choose to invest in. We have a pill in a market currently serviced by injectables. [ORLADEYO® , a treatment for hereditary angioedema.] Players like Royalty Pharma look for that differentiated or niche play.

The money is entirely at risk. So, if we don’t sell anything, they don’t get anything. But my hope is they get paid ridiculous sums of money. Because if they do, we will have done phenomenally well. [In these deals], there’s a very low cost of capital if your business doesn’t do well and a high cost of capital if it does do well. 

The ability to pay at a later date based on the company’s successes was far more amenable for us at the time than doing a large debt deal. And because I think the market undervalued us at that point, an equity deal would have been massively dilutive. It wouldn’t have been good for investors.