Looking for a good growth company to invest in can be a challenge. As an investor obviously one of the things that I am going to look for is a marketable product that I believe has the potential to make money, but I am also looking for something I consider just as important-a management team I believe can take the company and make it grow.
Being self employed most of my adult life, there are some characteristics that are important to me. Education is important, but an educated person does not always make a good leader. An education does not always promise leading a company into growth and profitability. For this reason I look for things from a leadership team that I believe are important to build a company with a new product.
As an example let's look at the team of a small biotech firm called PROLOR (PBTH). The leadership in this company is just what I would look for to lead with a new product into the future with sustained growth. Let's start with the CEO.
If you are looking for someone with success behind them to steer the ship, then you have found one in Abraham Havron PH.D., Chief CEO of the company. He is a 30 year veteran of the biotechnology industry and is also a member of the founding team along with Dr. Fares (whom you will learn about later). With a long background in research and development of new drugs, he is just what PROLOR needs.
As Director of Research & Development at InterPharm Laboratories, Dr Havron oversaw the development of a MS drug called Rebif which currently has global sales of $1 billion annually. Rebif is what is called an interferon therapy. Interferons are proteins that occur naturally in the body and Rebif has one called (beta-1a) that mirrors the body's natural beta. Though there is no cure for MS, this drug is the only self-injecting therapy that can achieve what is considered the three most important goals of treating the MS: He also has been involved in the development in the development of several other recombinatnly manufactured therapeutic proteins currently on the market including:
- Human growth hormone (Bio Tropin)
- Hepatits B vaccine (Bio-Hep-B)
- Human Insulin
So he brings to the table a successful a track record from the development to marketing of new drugs. And when you are interested in investing in a biotechnology company like this you want to know the Captain has sailed those waters before. Dr. Havron has been there and brings that experience as he leads the company.
Experience working with larger corporations and being familiar with funding is another trait that is very important in an industry like this. Shai Novik MBA is President and carries with him the experience of both the traits I just described. As current director of PROLOR, Mr. Novik brings years of management to the company. Previously he served at Chief Operating Officer and head of Strategic planning for THCG, a portfolio company for Greenwich Street that focused upon technology and life science investments. Greenwich Street is one of the largest private equity firms in the U.S. Prior to this Mr. Novik served as Chief Operating Officer and Chairman of Strategy Committee of Rogers Casey, an investment advisory company. Fortune 500 companies such as DuPont and General Electric were some of their customers. So he brings good experience and leadership in working with large partners.
Since the backbone of research through this company is (CTP) Technology, it would be important that leadership understands the workings of this research platform. It just so happens that the leadership team also involves a pioneer in the field. Fuad A. Fares D. Sc. Is the Chief Science Officer for the company and was involved in the initial work with the technology.
While doing post-doctoral work at Washington University (St. Louis, Missouri), Dr. Fares worked with Prof. Irving Boime to develop PROLOR's platform technology. In the experiments that lead to (CTP Technology), study of the half-lives of two reproductive hormones was taking place. (LH- luteinzing hormone) (hGC-1 gonadotropin) hCG has a life span of 2 days while LH is only 20 minutes. Now LH had an amino acid sequence very similar to hGC but the body broke down the latter much slower. What was the difference? It was discovered the only difference was the "Carboxyl- Terminal Peptide." (CTP for short) Further experiments showed CTP, when artificially added to various therapeutic proteins, increased life span.
So I have a marketable product (hGH-CTP) and a team with the experience in success as well as the technological prowess to steer a company into future success for a long time. Without a leadership time of this nature a company can have a good product and it could go nowhere. This is why looking at a company's leadership team like this would be smart for growth investors.