Heinrich Gugger, Ph.D., knows he has a big task ahead of him as the new chief executive officer at Paradigm Genetics. But he says he’s ready for the job.
In a Q-and-A session with Local Tech Wire, Gugger, who formerly served as president of Syngenta Crop Protection, said he took the job for three reasons.
“I believe the people here are some of the best in the industry,” he said in written responses to a series of questions. “The technology is exciting and holds tremendous potential. And, I’ve always liked challenges. Additionally, I’ve looked forward to working in a small company environment.”
Dr. Gugger faces a tough challenge in what is a tough climate for biotechnology companies and for Paradigm in particular. Paradigm (Nasdaq: PDGM) is a life sciences company using genomics and metabolomics-based technologies and services to speed the discovery of products for agriculture and human health. It does its gene and metabolism analysis in a factory-like industrial setting.
Founder and president John Ryals was dismissed by the company earlier this year and did not leave quietly. The company’s stock, which closed up 6 cents at $1.31 Thursday, is perilously close to the $1 companies must maintain to remain listed on Nasdaq.
Here’s the Q-and-A:
Do you feel you have been brought in to turn around Paradigm?
As a growing biotechnology company in a difficult market, Paradigm was ready for a leadership change. The search committee sought a business leader with deep operational expertise who was comfortable with Paradigm’s strategic vision, and who could match Paradigm’s technology to the market place, bring a product focus to its business model and drive long-term value for shareholders. My experience spans a range of technology developments in chemistry, physics and biology and, most recently, crop agriculture. I think Paradigm holds enormous potential, and this is the right match.
What do you see as the chief challenge facing you as you take over the helm at Paradigm?
To crystallize the company’s strategy and transition Paradigm from a company with exciting technology to one that can maintain long term shareholder value, through innovation and the commercialization of our technology.
Do you have a plan for helping the company achieve a sounder business footing and regain the confidence of investors? Is it possible for Paradigm to attract more corporate backing?
My plan is to focus on what we do well. This means that in agriculture, we’ll continue to work with partners like Bayer and Monsanto to commercialize the next generation of herbicides and crops with improved traits. We’ll also seek opportunities to develop a deeper intellectual property portfolio and build alliances to drive a product development strategy for agriculture. And we’ll seek additional commercial partnerships that leverage our strengths in gene function discovery and data integration to the fullest. On the human health care side, we’ll continue to develop our lead in metabolomics and validate its utility in the marketplace by forming R&D partnerships with pharmaceutical and biotech companies to improve the drug development process.
Yes. I believe its possible for Paradigm to attract more corporate backing. It’s too early to indicate the timing.
Informatics tool companies such as Paradigm lost favor with investors lately. Is this a cyclic event or does Paradigm have to find something else to sell? How much of a change is necessary?
I wouldn’t characterize Paradigm as an informatics tool company. Though informatics is one of our core competencies so are gene function discovery and the emerging science of metabolomics. So our reach is broader than just informatics.
It is true that biotech companies in general, and “tools” biotech in particular, have lost favor with investors because products and profits are far in the future. We want to demonstrate that we can produce revenues in the nearer term.
Agricultural biotechnology faces many challenges that evolve from public fears of genetically modified plants, foods, and other agri-bio products. Does this affect Paradigm? Can Paradigm do anything to offset such factors?
Paradigm is not directly affected by concerns over genetically modified foods since we currently are positioned early in the discovery-to-product pipeline. Our downstream partners are more on the front line of this issue. We are working together with them to ensure that sound science is the basis for discussion.
Can Paradigm achieve profitability anytime in the next few years? If so, how? What is a likely scenario?
At this point, I cannot make an estimate on profitability, though it remains our goal.
Is it difficult to pick up the ball at a company when a previous president (John Ryals) left unwillingly? Does that leave wounds to heal?
This is a new day for Paradigm and a fresh start. John Hamer has already done a great job preparing the organization for the next era. This company has stellar people and tremendous technology, and is ready to move forward.
Is it possible for Paradigm to switch gears and develop a human health oriented business? Just what will that business be?
In the coming weeks, the management team and I will be refining Paradigm’s strategy and business model. I am extremely interested to evaluate our human health opportunity and determine if we can build a business there. Our entry needs to be well thought out. While there is tremendous opportunity in human health, it’s a crowded industry, so we need to clearly define our niche.
Given your agro background, how does that help you in your Paradigm role?
My experience spans a range of technology developments in chemistry, physics and biology and, most recently, crop agriculture. My strength is that I bring a strong business and commercial focus. Also, I’m a strong communicator and enjoy leading people. Paradigm needs both right now. My ag background, specifically, means I have contacts that may aid us in business development efforts on that side. Also, since I’ve worked in the large company environment, I understand some of the dynamics that the large pharma and ag companies we’re talking to are experiencing.
Will Paradigm seek to raise money for capital and investment given its current cash position and stock price – or will it tough it out?
We’re cognizant that cash is a scarce and valuable resource. We’re in the process of developing a plan to ensure that we’ll have sufficient cash to continue operations while resourcing our most promising opportunities and continuing to build the business. I believe you can’t save your way to prosperity. You also have to invest in the future.
Were you recruited for the position – or did you know the Paradigm people – or both?
I was recruited through Heidrick & Struggles, and went through a rigorous interview process. I was already aware of Paradigm’s reputation for technological innovation and as a leader in ag biotech.
You have a tiger by the tail – why take the job?
For three reasons. I believe the people here are some of the best in the industry. The technology is exciting and holds tremendous potential. And, I’ve always liked challenges. Additionally, I’ve looked forward to working in a small company environment.
Is there anything I’m not asking you would like to say about the job ahead of you?
I am very excited to have this opportunity. Paradigm is not the only company these days facing challenges. I believe that we are well positioned for the future.