Manmeet Soni is on the move again.

The 41-year-old executive has already had several short, but successful, stints serving as chief financial officer of biotech companies, earning respect on Wall Street. 

He was the CFO for Pharmacyclics when AbbVie paid $21 billion to acquire the Imbruvica developer in 2015. Less than a year after he started at Ariad Pharmaceuticals in the same role, Takeda paid $5.2 billion to buy that business. 

For the past two years, Soni was CFO of Alnylam as the company made the jump from clinical- to commercial-stage with its first drug, Onpattro. 

About two weeks ago, he began his next gig: CFO of Reata Pharmaceuticals, a mid-sized biotech in Irving, Texas.

With four pivotal clinical studies ongoing — two of which are expected to read out data this year — Soni said he hopes Reata will take off in a similar fashion to Pharmacyclics, Ariad and Alnylam. 

BioPharma Dive spoke with Soni about dealmaking, Reata and the role played by biotech CFOs. 

This interview has been condensed and edited for clarity.

BIOPHARMA DIVE: For Reata, what are your top priorities in the short term?

SONI: The company is on the cusp of two pivotal data readouts. My number one priority is to make [Reata] commercial ready, to make sure they have all the resources, systems, process and people, [that] all are there in order to be commercial ready.

When you look back at the acquisitions of Pharmacyclics and Ariad, what did you learn about dealmaking?

SONI: With Pharmacyclics and Ariad, we were always running the company as if we are continuing the business forever. When the right time comes, because the decision is made by the board members, you should be ready and prepared to guide the board members.

I've always been proactive in keeping my books clean and making sure that we have a long-range plan that is always being refreshed. If you are prepared, then it's very easy for the board to assess if and when any offer comes. It all depends on if you are ready.

At least annually, you should talk to the board about what you think is the value of your company and how you see that in the next three to five years, the value accretion in the company so that the board is prepared.

Can M&A be a pitfall for biotechs? Particularly in the sense that it can distract from the day-to-day? 

SONI: ​Where I think people trip up is, first of all, going out and saying that we are looking to sell, or we are looking for who can buy us. Shopping yourself: that's the worst thing you can do for the company.

It might give you a little pop in the interim, because M&A markets in biotech have been pretty lucrative and people have gotten significant jump-ups, so people get excited when they hear the rumors. But I've never seen a successful story where a company says that openly and has been able to do a good transaction.

There are so many examples where a company says they are looking, their shares will pop up, and then they are not able to find a buyer at a price they were thinking. And then shares will go back and shareholders lose much more value.

You should run the process super tight, super confidential, minimum number of employees and that's what we've done with both Pharmacyclics and Ariad.

Biotech seems unique in going years, if not decades, without revenue. Do you see comparisons to other industries for CFOs? 

SONI: There is no other industry I can think of other than tech but, still, they have revenue.

That can only happen in biotech and some technology. Technology is the big thing.

Biotech is such a unique area. The success rate to find a drug and the level of investment needed is huge. I think the rewards are higher from that angle, but the success ratio is very small.

So you can't compare it with any other business, because, even in tech, you normally have huge revenues before you are valuable. This is only biotech where without revenues, only on the hope of Phase 1, Phase 2 data, and in some cases with gene therapy companies even before clinical data, before you put a drug into any human being, you are talking about a $1 billion or $2 billion market cap company.

In an economic climate that may turn downward, how do you think about financing future opportunities?

SONI: There are early signals right now predicting a slowdown or expected recession in the next couple of years. As a CFO or CEO of any company that has to raise money, they should always be prepared, doing scenario planning and looking at unique ways of how you can raise money.

There are some ways which everybody raises money, through equity financing and convertible debt, both of which are dilutive to the current shareholders. Then they have a few options of non-dilutive means, such as debt, collaborations with other companies by selling some rights to products or by structured royalty financing. 

If you want to raise debt before you have product revenues or near to break even, the cost of debt is generally more expensive.

In the last few years, a lot of biotech companies have been doing structured royalty financing, selling the future royalty at some agreed percentage of their future product revenues in order to raise cash, which has been very lucrative as a measure of raising cash through non-dilutive means. Though this source generally is used when companies already have Phase 3 data or after their FDA approval, when the product revenue stream has some level of certainty.

Scenario planning [for] raising money through non-dilutive measures is very important for all CFOs and CEOs to consider.

Also, look into ways to control spend. I've seen companies where they go ahead of their skis in the sense of investing much earlier than they have known either the market size, market potential or the label. They invest much more. That's also an area where you have scenario planning to control the cost.