Barbara Dalton has run US-listed drugs company Pfizer’s corporate venturing unit since she joined in 2007 as vice-president. But her knowledge of the industry stretches back a quarter of a century to when she started out as president of UK-based pharmaceutical company GlaxoSmithKline (GSK)’s corporate venturing unit, SR One, in 1993.
Founded by Peter Sears in 1985, SR One first invested on behalf of SmithKline Beckman before a series of mergers resulted in GSK. Dalton became president in 2001 when Brenda Gavin, who took over from Sears in 1999, moved on to co-found Quaker BioVentures.
After formally leaving SR One in 2003, Dalton joined EuclidSR Partners, a $260m venture firm set up in 2000 and backed by GSK. EuclidSR grew out of a partnership between Euclid Partners, a venture capital firm, and SR One, and Dalton and other SR One principals invested on behalf of both GSK and EuclidSR until their departure in 2003.
She worked at EuclidSR until the start of 2007 – an era typified by the difficulty of floating or selling portfolio companies following the dot.com bubble – and has now spent a dozen years at Pfizer.
But for corporate venturers, financial returns are usually only table stakes to align with VCs and avoid being a cost centre to the parent. The potential for greater support to portfolio companies by connecting them to the corporation and, vice versa, providing strategic insights and options to the parent offer a dimension of added-value investing.
GSK had relationships with about 50% of portfolio companies at the time of her departure from SR One, while Dalton said Pfizer was “probably about 25% and there are always discussions ongoing with portfolio companies”.
At EuclidSR she worked with Elaine Jones, who also joined her at Pfizer Venture Investments and retired last month, while the third member of the team is Bill Burkoth.
Her small team at Pfizer puts out about $50m a year in cheque sizes of up to $10m a round and is both active and successful. Her Pfizer profile says she has managed more than 30 fund investments and 80 diverse company investments in the US and Europe and has had direct investing responsibility for biotechnology therapeutic and platform companies, as well as some healthcare IT and service businesses, including Accelerator NYC, Complexa, Cydan, Ixchelsis, Lodo, Magnolia, Morphic Therapeutic and Petra Pharma.
Among her latest deals were a $63m series B round for US-based blood disease drug developer Imara in March this year and a £65m ($83m) series B round for UK-based cancer-focused biotechnology developer Artios Pharma in August last year.
US-based peptide therapeutics developer Rhythm Pharmaceuticals, which raised $41m in a February 2017 round and $33m in a 2012 series B round from Pfizer Venture Investments and others, filed for a $115m initial public offering on Nasdaq in September 2017.
While Pfizer’s venture returns are undisclosed, Dalton said: “it is significant and would put us in the top quartile for most biotech VC funds”.
She added: “Right now about 15 portfolio companies are talking to someone in the organisation. We have been as high as 45% with relationships, but the more new companies you add, that number drops because it takes time to generate those connections.”
Options for the parent in the longer term are also important. While strategic shifts and breakthroughs in science and business models may make a portfolio company redundant, they can also result in some becoming important partners from adjacent or non-core peripherals.
Dalton, who has a PhD in microbiology and immunology from Medical College of Pennsylvania, shows no signs of changing even after winning the GCV Lifetime Achievement award in January.
