March 30, 2020

Hi Gang,

In case you lost track, today is March 98th. Thanks to you for sending helpful responses to the ‘top 5 questions for your peers,’ which I’ve included below my signature. Rather than more news today, I sense we could use a dose of motivation to kickstart the week. This quote is remarkably relevant:

The story of the 1918 influenza virus is not simply one of havoc, death, and desolation, of a society fighting a war against nature, superimposed on a war against another human society. It is also a story of science, of discovery, of how one thinks, and of how one changes the way one thinks; of how, amidst near-utter chaos, a few men sought the coolness of contemplation, the utter calm that precedes not philosophizing, but grim, determined action. -John M. Barry, The Great Influenza

Here are a few resources for you and your teams so we can remain focused on determined action:

• This commencement address by Naval Adm. William H. McRaven, ninth commander of U.S. Special Operations, brings me to tears every time, It’s a MUCH needed and applicable message right now. (~20 minutes long; you’ll hang on every minute)

• I was also moved by this reading of IF, Rudyard Kipling's poem, by Sir Michael Caine (~4 mins)

• Some Good News with John Krasinski: Krasinski highlights heartwarming stories of support from around the world (~15 mins)

• Many of us need to get our at-home workout schedules in order (guilty). Here are free classes hosted by the very talented instructors at Studiomix, a (woman-founded and owned!) small business in San Francisco.

• 6 Games You Can Play On Zoom For Long-Distance Fun – Thanks for sending this idea! The RRA healthcare team can’t wait to jump into some friendly competition together.

Reminder to scroll down to read insights from our network. Hang in there!

Best,

Jackie

Top 5 Questions for Your Peers

Bay Area: Green

SoCal: Blue

What aspects or changes to your business model do you anticipate will remain long term, after COVID-19?

• Really not sure yet. Frustratingly, I do not feel like my execs have quite caught up yet with the huge impact of all of this.

• Greater use of video conferencing (both as a substitute for travel and even if not); greater flexibility for WFH arrangements (though I am still a believer that the majority of time needs to be in the office); better preparedness for multiple types of disasters/crises.

• Virtual clinical research is here to stay; we’re positioned well from the biz model perspective. It will be interesting to see how many employees want to remain FT remote on the other side of this.

• Diversification of supply chain/CRO support across multiple geographies. Don’t consolidate too much risk into one vendor or region.

• More interest in diagnostics and specifically, POC. Centralized model is not meeting the need for rapid testing and triage.

How can you access capital or funding in this environment?

• We have been in the middle of a number of BD and private funding efforts that seem to be moving along decently, but we hope to close on a few very soon.

• With difficulty; lenders, structured financing providers and pharma collaborations will be in demand.

• I honestly think the funding gears will grind slowly if this drags on. For the companies whose biz models thrive in this environment for whatever reason, I’d guess they’re going to have plenty of opportunities for capital, and perhaps there will be a sharp drop off for everyone else til this market recovers. Valuations will suffer for them, at minimum.

• For the next 2-3 months, it will be very hard to get VC money outside of your current investors. Gov loans, grants, etc. are likely the only viable near term options. If you have a credit facility, draw now. Do not wait. In another 3 months or so, you may be able to do a VC round if you are prepared to accept available valuations. Pre-revenue companies likely to see flat to only modestly up from last round if it was within the past 12 months or so.

Are labs still operating? If so, on what level? How are you maintaining productivity?

• Yes, we are operating with minimal, distanced staff on critical projects and also mobilized to shut down quickly if we have to.

• From what I have heard from folks (I am on a separate thread with local CFOs), most are not operating.

• Yes, at ~50%. We have a tight shift schedule that ensures “dedensification” or physical distance. The team is motivated by the science itself.

• We are diagnostic company that has lab work as major component. We are operating at roughly 50% staff on site at any time to balance density in the office and comply with the available exemptions under the CA order.

• We have been hyper-vigilante with our staff that takes care of animals and implemented new protective procedures for them as they are truly essential staff.

How are you keeping employees motivated, engaged and connected?

• We were well-timed in already having planned to launch our first company intranet on March 17. We have a well-used Microsoft Teams page called "Staying Healthy, Connected and Productive" where we post all corporate updates and also everyone can chat about anything and everything. We are holding a managers' Zoom meeting once a week and an all company Zoom meeting once a week.

• Turning up the communication frequency; more team meetings (with video). It’s been particularly challenging for us as about 50% of our employees are transitioning out due to an acquisition.

• It’s hard, but so much of our focus is in infectious disease already, employees are motivated. We’ve doubled the all hands/town hall slots and are trying to ensure more direct discussions with senior execs and teams are happening.

• We are based in the Bay Area and used to do a catered lunch for our employees. Have now transitioned (with the same vendor) to providing pre-made lunches for the essential staff who are required to be onsite for running our lab.

• High touch: weekly all-company video meetings, virtual happy hours, many 1:1 meetings, many staff meetings, personal check-in email from CEO to every member of staff, etc.

• Weekly news letters, virtual video conferencing happy hours, etc.

Has attention turned to longer-term planning yet? How?

• Yes in terms of financing, but not necessarily past that yet except for our already set 2020 goals.

• Not yet.

• Yep, all about headcount timing and how to tune the growth to commercial bookings rate for the rest of the year, even though we have plenty of capital.

• We are working closely with investors to ensure 18+ month runway. Have pre-approved action plans with BOD for different scenarios so there is no delay in implementation.