Biotech leadership cannot stay static as a company moves from the benchtop to the clinic, writes Chris Ehrlich, CEO of CERo Therapeutics. Drawing on his experience backing and building companies from seed stage to IPO, he describes how the skills, partnerships, and board relationships that carry a discovery-stage company differ from those clinical development requires.
Key Takeaways
- Biotech is risk management. Each early-stage asset carries a net present value that rises as it advances toward the clinic and its risk of failure falls. The executive’s job is to reduce that risk systematically.
- Discovery-stage leaders need a distinct skill set. These include vision, a firm grasp of the underlying science, tolerance for ambiguity, disciplined use of scarce capital, early milestones, and the willingness to pivot when plans fail.
- Clinical development changes the job. Regulatory, operational, and capital complexity all increase, and the focus shifts to structured, market-facing milestones. Reimbursement and competitive dynamics need attention early, not after the science succeeds.
- Founding scientists and business leaders need each other. The author has rarely seen a scientific founder remain CEO through a company’s maturation. He calls for a two-way partnership in which scientists learn to communicate for generalist investors and business leaders understand the science.
- Boards and investors shape the outcome. Incentives between investors and management often differ, so the relationship works best as a partnership rather than a hierarchy. The author cites roughly half of biotech failures as business-driven rather than scientific, and he treats knowing when to stop or pivot as a mark of managerial maturity.
Why Biotech Leadership is Not Static Across Company Stages
Biotech leadership is inherently hands-on. This is not an industry where CEOs can back and wait for things to get done. The life we have chosen in this industry means we cannot afford to remain static as a company moves through its developmental lifecycle. Throughout my career backing and building companies from the seed stage through to an IPO, I have observed that the most successful early-stage leaders approach risk and uncertainty with a distinct, highly adaptive mental framework.
Biotech is fundamentally an exercise in risk management. Every early-stage company can be viewed as a project with a Net Present Value (NPV),1 a simple formula, written or unwritten, distilling and predicting the stream of projected costs and revenues. As an asset successfully advances from the benchtop to the bedside, the risk of the project failing decreases, causing the perceived NPV to rise. The goal of a biotech executive is to systematically manage and mitigate this risk to the point where the project commands substantial value from investors, potential acquirers, or strategic partners.
This volatile environment requires a completely different breed of leader than those found in large pharmaceutical corporations. In big pharma, executives often occupy highly secure roles with high base salaries, and they are trained over decades not to take outsized risks, prioritizing things like steady income, growth multipliers, and high-probability candidates. Look no further than Pfizer’s stock performance as a prime example of this status quo: in 1995, the stock traded at $23, and by 2025, it was still at $22. [2]
Nobody enters a large pharmaceutical company for stock-based compensation. In stark contrast, early-stage biotech demands leaders who embrace volatility, who understand that their primary directive is to navigate extreme uncertainty, and have the gall to manage risk aggressively and build real value. In exchange for the risk, there is real reward in the way of bringing life-altering therapies to market for patients and their families.
From initial discovery to FDA approval or asset acquisition, the nimble and admittedly stressful life of a biotech executive is not for the faint of heart, but it can be extremely rewarding for those who stay focused and have the vision to see it through.
Discovery Phase Leadership: Vision, Science Focus, and Ambiguity Tolerance
In the initial discovery phase, biotech leadership centers on visionary thinking, a fierce focus on foundational science, a keen eye on the mission and an unmet need, and an extraordinarily high tolerance for ambiguity. Elite entrepreneurial ecosystems like the Bay Area and Boston have cultivated a unique, industrial-scale population of bio-entrepreneurs who are comfortable taking the “crazy” risks necessary to build companies from scratch.[3][4]
One of my favorite business adages is that “experience is what you get when you’re inexperienced.” The battle scars earned through repeated failure and course correction are precisely what forge a seasoned, effective biotech executive.
During the initial discovery stage, when data are limited and the business plan is more of a hypothesis than an established roadmap, effective risk managers must excel simultaneously at several highly specific skill sets: they must start with recognizing excellent technology, recruit a superb and seasoned supporting management team, and maintain radical transparency with investors regarding the risks ahead.5
Discovery leaders must also treat capital with immense respect, operating under the assumption that it is always difficult to raise, and focus on reducing risk through clearly defined, early milestones to demonstrate how the project’s NPV is changing along the journey. Because initial business plans rarely make it to fruition exactly as written, discovery leaders must remain flexible and prepared to pivot when setbacks inevitably arise. As James Watson, one of the co-discoverers of the DNA double helix, famously noted: “Failure hovers uncomfortably close to greatness.”6
A discovery leader must be comfortable operating within that precise shadow while maintaining the momentum of the science.
Transition to Clinical Development: Regulatory, Operational, and Capital Complexity
The transition from discovery to clinical development introduces an entirely new tier of regulatory, operational, and capital complexity for a biotech leader. Moving a program from a controlled lab environment into human clinical trials shifts the company’s focus from an abstract science project into a burgeoning commercial asset, and the leadership goals have to shift with it. This evolution inevitably requires navigating prolonged funding droughts, much like the macroeconomic contraction the industry has experienced over the last three or four years.7 In harsh climates, companies and investors naturally desire larger capital cushions, yet macroeconomic realities often dictate the exact opposite, making capital efficiency and tight milestone execution paramount.
I’ve had the privilege of exploring, through a course I teach on biotech leadership, a clinical-stage company can no longer delay thinking about the translational and commercial roadmaps. Leadership must strategically evaluate future reimbursement landscapes and competitive dynamics early on in the process. Ignoring these factors means you might win the scientific battle but ultimately lose the commercial war.
At CERo Therapeutics, the company I currently run as CEO, we navigate these exact dynamics, where balancing scientific ambition with a rigid strategic roadmap is essential. The path will never be linear, but my past experiences reinforce the reality that clinical development requires an operational pivot away from open-ended scientific exploration toward highly structured, market-facing milestones. It’s important as well to put your metaphorical blinders on that keep your focus on the ultimate goal of bringing to the market innovative therapies that have the best chance of helping patients break out of the meager status quo. With highly structured, market-understood milestones you can reach to show progress, the capital and investors will come with you.
Why Founding Scientific CEOs Often Struggle to Scale
While scientific founders possess the absolute genius required to birth these innovations, and let’s be clear, no successful biotech company would exist without them, they frequently struggle to scale as a company transitions to clinical development. In my decades in this industry, I have rarely, if ever, seen a scientific founder survive as the long-term CEO of a successful, maturing company. The skill sets required to run a clinical and commercial business are fundamentally different from those needed to invent a new process, discover a breakthrough molecule at the benchtop, or any other innovative idea.
Founding scientists are often deeply emotional about their inventions and take technical setbacks or programmatic shifts intensely personally. The fact of the matter is the mindset of a discovery scientist differs vastly from that of a clinician or a regulatory specialist. To successfully advance an asset through clinical trials without bias, a leader must learn to collaborate with these external specialists and intentionally abandon the desire to be the smartest person in the room. When a technology progresses into a real commercial asset, the technical founder’s brilliance must be matched by operational pragmatism, a transition that many pure scientists find deeply uncomfortable or choose to resist entirely.
The handoff from founders to a seasoned biotech executive often signals to the market that the company is getting serious about the development timeline. In no way am I advocating for the hostile removal of founding CEOs, but in my own experience, the scientific founders who know when to ask for help from the other side are the ones who succeed and bring therapies across the finish line.
The Need for Complementary Leadership: Scientific and Operational Partnerships
To bridge this gap, maturing biotech companies need a deliberate, complementary leadership model built on a tight partnership between scientific and business skill sets. A common pitfall for deep scientists is an inability to simplify their incredible technical breakthroughs into a clear, accessible narrative that generalist investors can easily digest. Because a CEO’s primary directive is often to raise money, this communication gap can become a terminal vulnerability for an early-stage firm. Conversely, an operational, business-oriented CEO cannot operate in a vacuum. A CEO who doesn’t know his stuff will ultimately fail because they must deeply comprehend how the underlying science works to make informed strategic choices and lead the venture to success.
A true partnership must be bidirectional. Historically, this transition creates friction, and I have frequently encountered hostility from “real scientists” who grow irritated when business professionals step in to take the operational reins. Overcoming this friction requires mutual respect and an explicit understanding that scientific ambition and strategic commercial execution are two sides of the exact same coin and the whole team is focused on a common goal.
Role of Boards and Investors in Identifying Inflection Points
In navigating these high-stakes inflection points, the role of boards and investors is critical, yet highly nuanced. Early in my career, I naively believed that everyone on a board shared identical incentives to simply create great companies for the common good. Experience quickly teaches you that board members and management frequently harbor disparate motivations that must be unmasked early in a deal. Venture funds may be at entirely different stages of their own lifecycles, which heavily dictates the quality and timing of the inputs they provide for group decision-making. For instance, an investor may be highly diversified across multiple deals and unwilling to allocate further capital to a single company, whereas management’s livelihood and professional focus are entirely concentrated within that one venture.
A mature board member recognizes that the relationship with management is a partnership instead of a hierarchy. While the CEO technically reports to the board, a hierarchical approach rarely works; instead, they must act as active partners to align economic incentives. The board must help the team recognize when a thesis is challenged and ensure they possess the mettle to pivot intelligently.
I recall a major investment we made in a non-invasive glucose monitoring system that used the eyes as a target organ. It failed within a few months of our original investment, and the team immediately shut it down and returned the remaining capital to investors. When I asked a partner why that made them a great team, she said knowing when to stop or pivot efficiently is the ultimate indicator of managerial maturity. Real mettle is forged during these challenging times.
Adapting Corporate Strategy to Scientific Maturity
Ultimately, biotech leadership must evolve in lockstep with corporate and asset maturity. Roughly half of all failures in the biotech sector stem from business mistakes rather than pure scientific failures.8 This stark statistic highlights why a rigid adherence to an unchanging leadership style or an outdated business plan is a recipe for failure. Most early-stage ventures fail from starvation because of capital mismanagement or poor investor communication, rather than indigestion from too many operational tasks.
As an asset matures, corporate strategy must evolve alongside scientific results, constantly aligning economic incentives, anticipating commercial hurdles, and refining the operating model. By recognizing that leadership is an evolutionary process from benchtop discovery to clinical commercialization, executives can successfully steer their companies through the inherent uncertainties of the biotech landscape and maximize the true value of their scientific innovations.
References
[1] Net Present Value (NPV). Corporate Finance Institute, January 22, 2018. Online. Last accessed on September 9, 2026
[2] Pfizer Inc (PFE). New York Stock Exchange. Online. Last accessed on July 8, 2026.
[3] Koczwara, Kevin. Building Out a Bioscience Startup Ecosystem. Worcester Business Journal, April 17, 2023. Online. Last accessed on July 8, 2026.
[4] Leung, Shirley. Boston’s Biotech Supremacy Is at Risk. Will a New City Emerge as the Leader of the Life Sciences Industry? Cambridge Innovation Capital, October 9, 2025. Online. Last accessed on September 9, 2026
[5] Hughes, Mark. What Makes a Good Risk Manager? Global Risk Institute, March 8, 2018. Online. Last accessed on September 9, 2026.
[6] Watson on Pauling. Time Magazine Archive. Online. Last accessedon July 8, 2026
[7] Booth, Bruce. The Biotech Startup Contraction Continues… And That’s a Good Thing. LifeSciVC, April 26, 2024. Online. Last accessed on September 9, 2026.
[8] Biotech Startups Failure Advice. Labiotech.eu. Online. Last accessed on July 8, 2026
Featured image: © 2026 ONC JCO. Used with permission.
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