Alan Auerbach spent his summers working at the Chicago Board of Trade while studying bioengineering at Boston University. It's this combination of science and finance that lead him in 2003 to found Cougar Biotechnology, a Westwood company that licenses and markets biotech drugs. At Seidler Cos. and Wells Fargo Securities, he made a name for himself picking biotech stocks. Today, Cougar has $185 million in financing, 35 employees and three drugs in development, including a prostate cancer drug on track to reach late-stage clinical trials this year. Cougar's stock moved to the Nasdaq in December. Meanwhile, the 38-year-old Auerbach is so busy his surfboards are gathering dust in his Westside home, though the admitted workaholic said he has no regrets about his seven-day workweeks.
Question: What made you establish your company in Los Angeles?
Answer: I love living near the ocean. It's not an experience you get growing up in Chicago. And in Los Angeles, you have some real centers of academic excellence and research: UCLA, Cedar-Sinai, USC, Caltech. One of the initial ideas I had around Cougar was to take advantage of that academic capital.
Q: Have you been able to do that?
A: In the case of UCLA, yes. Dr. Arie Belldegrun (chief of the division of urologic oncology) is chairman of our scientific advisory board and vice chairman of the company's board. He's been very helpful to our company.
Q: What attracts you to the beach?
A: I used to surf a great deal. Growing up in Chicago, you don't really get that.
Q: When did you learn how to surf, growing up in Chicago and going to college in Boston?
A: I learned how when I was in graduate school at USC. I've been surfing for over 15 years.
Q: You say "used to" surf. How long has it been? Several months?
A: That's a fair estimate. My three surfboards suffer from separation anxiety. They do have cobwebs. I'm still a big believer in physical fitness. I belong to two gyms, so I happily go to the gym, and I happily go running on the beach. Not a golf guy, though.
Q: Still, it's mostly work, right?
A: I know I sound like a textbook example of a workaholic, but my job is my hobby. I have no complaints about working seven days a week and not getting to go surfing a lot. I think that in order to be happy, you have to have a passion for what you are doing. And there's no question that I have that passion.
Q: Describe a typical workday for you.
A: The market opens at 6:30 a.m. Pacific, and as CEO of a public company it is important for me to be up well before that to see if there is anything I need to address with respect to the investment community. So it's common for me to be on the phone at 6 a.m. talking to analysts and portfolio managers. The rest of my day is typically packed with back-to-back meetings. These can be with people from outside the company, like investors or clinical investigators, or with people inside the company, like the clinical development team, the regulatory affairs team, the investor relations group, etc.
Q: So when do you squeeze in your exercise?
A: After 5 p.m. there tends to be less distraction, so it's a good time for me to catch up on any e-mails that I could not get to during the day, or catch up on paperwork. If I go to the gym, it is usually in the early evening. It varies from month to month but I am also usually traveling anywhere from 25 percent to 50 percent of the month.
Q: When's the last time you took a vacation?
A: Maybe 10 years ago. But part of it is living near the beach provided me with enough relaxation so I never felt the need to get away for weeks on end. But a lot of the reason is that I've loved what I have done in my career. I loved being an analyst; I love everything about being CEO of a company. This has always been my dream, to build my own company. You get that one shot at your dream, you have to give it your all. I have no regrets from that perspective.
Q: When did you realize you wanted to run your own show?
A: I was always intrigued by entrepreneurship. During high school and college I witnessed a lot of the great entrepreneurial companies succeed, like Genentech and Amgen in biotech. That seemed to light the spark. The first job I had out of college was at Diagnostic Products Corp., which was an entrepreneurial company, started by the late Dr. Sigi Ziering. He basically started developing diagnostics out of his house and built it out into a billion-dollar company. Being at DPC while he was still there, and seeing the benefits of entrepreneurship, that played a role.
Q: Did your family play a role in your career choices?
A: Not really. I am the only one who went into a scientific field or an entrepreneurial field. My father was in sales and my mother raised five kids. My dad really never found a career that he had a passion for. His dream was to be a great dad, and he definite accomplished that dream.
Q: Why did you get two degrees in bioengineering, rather than an M.B.A.?
A: To do biotechnology, yeah, you have to know business, but it's the science that drives it. I really enjoyed medicine, and I had a good technical background, so by high school I knew I'd be doing something scientific. I even had a job in high school at a local hospital where I helped out fixing the equipment and electronics. When I went to Boston University, they had a great program. Ken Lutchen, who's now dean of the College of Engineering, was head of the biomedical engineering program at the time and was like a father to me.
Q: How did you get started as an analyst?
A: I had been doing some informal consulting work, basically consulting for college friends who were involved in investment banking. They encouraged me to get more into the investment side of the business. Eventually, I was introduced to John Merriman, who is now CEO of an investment bank in San Francisco called Merriman Curran & Ford. At the time he was at a firm in L.A. called Seidler Cos. I consulted for him part time, and he eventually asked me to come on full time as an equity analyst.
Q: Is that how you developed an interest in the business end of biotech?
A: I always had an interest in business and the markets. I used to work in the summer at the Chicago Board of Trade when I was going to Boston University.
Q: Was there much of a learning curve for you to become an equity analyst?
A: Not really, because I had been doing much of the same thing as a consultant. And working with John, there was such great synergy. It was a fantastic working relationship; after a week, it was like we had worked together for years, from a personality and work ethic standpoint. It was a great experience. After about nine months, he took a group of us from Seidler to Van Kasper & Co. in 1998. Van Kasper now is part of Wells Fargo Securities. I was able to stay in L.A. the entire time.
Q: How did you move from Wall Street analyst to chief executive of a startup biotech company?
A: It's less surprising that you'd think. My undergraduate and graduate degrees are in biomedical engineering. After USC I went to work for Diagnostic Products Corp., running clinical trials for diagnostic tests in cancer.
Q: How did you pick up skills necessary to be a CEO?
A: I was very fortunate as an analyst to have worked with some really great CEOs, such as Sol Barer at Celgene Corp. I could see how successful CEOs did things. That was most helpful.
Q: What would be the most important lessons you learned from them?
A: Being a development stage biotech company has its challenges. The key is to always execute for your investors; at the end of the day that's the whole job as a CEO. In biotech, you have to have good science that you turn into good drug development. And you have to be able to manage it well as a business.
Q: So how did you get the chance?
A: After (working as an analyst for six years) I was approached with the idea of starting Cougar (by) some venture capitalists I knew. We started in May of 2003. In the beginning it was just me and some initial seed capital. The goal was to license rights to drugs in the cancer space.
Q: Why cancer?
A: That's where I had focused as an analyst, on small- and mid-cap companies in the cancer area. So it was an area I felt comfortable operating in. From a science basis, there has been a higher degree of success by biotech companies in bringing cancer drugs to the market. That goes from Genentech right down to smaller companies like Celgene.
Q: Why license drugs instead of developing them in your own laboratory?
A: I was familiar with the practice, because a lot of the companies I was covering got their start by licensing the drugs they were developing.
Q: Your Westwood offices share space with real estate companies like KBHome. Not a place where you would expect to find a biotech lab.
A: That's because we don't have one. We are what is known as an NRDO:
a no-research, development-only company. In our business model, we don't need any lab space, because we're only working with drugs that are beyond that point.
Q: In an age where biotech companies especially have all these abstract names, where does Cougar come from?
A: It came out of a brainstorming session with the original investors. When the company first started it was just me alone in a rented executive suite in Westwood looking for drugs to license. We needed a name that had a connotation of searching or hunting.
Title: Chief Executive
Company: Cougar Biotechnology Inc.
Born: 1969; Chicago
Education: B.S., biomedical engineering, Boston University, M.S., biomedical
Career Turning Point: Working as a Wall Street biotech analyst
Most Influential People: Investment banker John Merriman; Ken Lutchen, dean of Boston University's College of Engineering
Hobbies: Surfing, working out
Personal: Single; lives in Los Angeles
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