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Patrick J. Mahaffy
President, CEO & Director
Pharmion Corporation
(NASDAQ: PHRM)
The Background
After spending 6 years as CEO of biopharmaceutical company NeXstar, serial entrepreneur and former venture capitalist Patrick Mahaffy was considering his next move. Along with partner Judy Hemberger, they decided to leverage their long-standing relationships with big pharma companies and biotech startups with the strong network they had developed overseas.
The goal was to build a global specialty pharmaceutical company focused on acquiring, developing and commercializing innovative products for the treatment of hematology and oncology patients.
Why We Invested
Sometimes the elements of a great business are so compelling that you simply can’t ignore the potential. Such is the case with Pharmion. Their executive team was in place. Their first round of financing was complete. It was time to find the right partners for their critical second round.
Patrick returned to NEA, one of NeXstar’s funders and spoke with general partner Jim Barrett. It was clear to Jim that Pharmion was poised to fill a gap in the market. They would focus on late stage product development, sales and marketing. Not on research. By taking advantage of the team’s strengths without R&D overhead, Pharmion could become profitable very quickly and become the “partner of choice” for research companies both in the US and overseas.
The Result
NEA co-led the Series B round and was the largest investor in both Series B and C. The firm believed strongly in the CEO, his team and their abilities to create a strong company. Patrick had every faith that what NEA and specifically Jim Barrett, brought to the table was just what the doctor ordered.
As Pharmion matured, the need to separate the CEO and Chairman roles became clear. In one of the highest compliments an entrepreneur can pay to a VC, the management team selected Jim as Chairman of the Board. Obviously they had confidence in his judgment. But Jim is also one of the great entrepreneurs of our time. His drive and experience guided Pharmion’s successful IPO.
Why It Worked
While Jim Barrett has extensive business experience and a strong medical background, he clearly understands the difference between the role of a board member and running the company. Jim continues to provide the high-level guidance Pharmion’s management team needs to become a leading force in the pharmaceutical industry. In fact, to this day, their CEO credits NEA with helping Pharmion to its IPO and providing superior guidance every step along the way.
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