470: Rethinking Corporate Structures | Sean Cassidy, CFO, Arvinas

Listen to the Episode Below (00:31:16)

High-Growth Impact

Arvinas CFO Sean Cassidy caught the high-growth bug early in his career. Shortly into his stint with Deloitte, Cassidy transitioned from a massive global financial services company to work with middle-market clients. He felt that he could make a more tangible difference for those companies by supporting them as they raised capital and made acquisitions. His passion led him to the life sciences industry, where Cassidy has served as the finance chief of a number of high-growth biotech and biopharma companies. In a previous stint, Cassidy helped CuraGen subsidiary 454 Life Sciences get its back office in order for a potential IPO. During his two years of guiding that effort, the business grew from 20 people to 150 employees and from zero to $70 million in revenue. “It was a very exciting time,” Cassidy remembers. “The company almost went public, but in the end it made more sense to do a strategic transaction.” The experience helped to elevate him to CuraGen’s CFO office and, more recently, to Arvinas, a biopharmaceutical company focused on developing therapeutics for cancers and other difficult-to-treat diseases. Cassidy discusses how his approach to corporate finance leadership pivots on flexibility. “You can’t be too rigid in your planning,” he adds. “Science changes on a dime.”

Guest: Sean Cassidy

Company: Arvinas

Headquarters: New Haven, CT

Connect:  www.arvinas.com

 

CFOTL: What comes to mind when we ask for a finance strategic moment?

 

Cassidy:  One of the things that you’ll see in the biopharmaceutical world is that typically companies will get bought, most of the time when they’re in the clinic, based on the success of a particular asset, right?

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There’s a particular asset that’s in phase one trials, phase two trials, and a pharma company comes along, notices that and ends up buying the organization for it. What ends up happening for those companies that actually have true platforms – those platforms that are applicable to many different programs – is that there’s a lot of value that’s left on the table because the company gets acquired a bit prematurely without taking advantage of the value of the platform and other assets that may be in the portfolio.

So we looked at that particular scenario and at one actually that is used in the oil and gas industry: a corporate structure in which we actually put a limited liability holding company as the parent company. And then as programs matured, we set up separate C-corps for each of those particular programs.

Now what does that allow us to do? It sent a message out to the marketplace that the company wasn’t for sale, but it did send this message out to the marketplace: “You should start looking at these particular assets, in the event that you’d like to acquire them.” And why would you go through all that work? Because the efficiency with which you can return capital to your investors is much greater under that structure than it would be in a single C-corp scenario. So it’s a corporate structure that is really starting to take hold here in the biopharmaceutical area for those companies that are platform-based companies, such as Arvinas.

 

 

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