California State University, San Marcos, students recently gained insight into a company’s upcoming merger, learned about different company cultures and ethical dilemmas encountered from a senior-level executive.
Terrance “Terry” Bruggeman made his way from Orange County to speak at CSUSM's College of Business Administration in continuation of the speaker series, “In the Executive’s Chair.” As the executive chairman at the Irvine-based biopharmaceutical company Somanta Pharmaceuticals (OTC: SMPM), finding his way into the life-sciences industry was “totally accidental,” Bruggeman said.
“I’d like to tell you that it was a well-planned career strategy,” he said. Instead, he fell into the industry while working at a venture-capital firm. His interest in life sciences was piqued when he agreed to help turnaround some companies there.
Bruggeman’s experience ranges from startups, mergers and turnarounds. Somanta has recently been involved in a merger agreement with a Texas-based biopharmaceutical company, which may be completed within the next two weeks, he said.
Access Pharmaceuticals Inc. (OTC: ACCP) and Somanta signed a merger agreement in April in which Access will acquire Somanta. Under the terms of the agreement, Access will issue 1.5 million shares of common stock to Somanta stockholders in exchange for all the outstanding capital stock of the company. Access will also acquire four novel anti-cancer compounds in development.
The terms of the agreement have not changed since its announcement in April, according to Access’ investor relations firm, Wolfe Axelrod Weinberger.
The idea of a merger surfaced as Somanta was still 10-11 years away from getting a product approved.
“By merging, we’re going to shorten that cycle to where they ought to have some earnings and profits by the combined portfolios in about five years,” Bruggeman said.
“Investors are having a hard time in today’s environment holding on for as long a period of time as necessary to get products approved through the FDA,” Bruggeman continued. “So putting our companies together made sense because it gives investors a shorter time horizon.”
Somanta designs clinical studies on cancer therapeutics and Bruggeman has continually been faced with the ethical dilemmas clinical studies encounter during its research.
“In the ideal world, you treat 20 million people and you ideally know all of the issues associated with (the subjects),” Bruggeman said. However, the company cannot afford to do research on such a large number of people.
The reliability of the data is questioned when only 300 or half that number is used.
“There’s an ethical issue here of how do you properly power the study to try to understand the likely outcome across a broad population,” he said.
Companies are faced with other ethical risks by asking a person to take a new treatment that either could be beneficial, have no impact or have an adverse effect.
With risks come mistakes and Bruggeman cites conflict management within a company as his worst mistake. He said he has let conflict fester between research groups and manufacturers in the past. It is a lesson he has re-learned throughout his career.
Bruggeman has experienced different cultures or environments in his executive career. Somanta has offices in Irvine, Calif. and in London, England, which makes the company bi-cultural in terms of thought, according to Bruggeman.
Clashing views occur in this type of setting. The doctor culture is the practice of medicine, not the science of medicine, Bruggeman said.
“So the doctor is allowed to make decisions based upon intuition, not necessarily data,” which can lead to disagreements on whether there is enough information to move to the next step.
In terms of leadership, Bruggeman said the tone of the company must be set from the top and has to be followed through by the leader. Also, a leader should always be looking ahead and question the company’s next steps.
“A successful leader is continuously curious,” he said.
Bruggeman has been executive chairman since January 2005. He was previously president and CEO of Aspetuck Capital Partners Inc. and SureBeam Corp. He was also president, CEO and chairman of Provasis Theraputics Inc. and Diversa Corp.
Along with his current role, Bruggeman is an adviser director with InnerTalent Inc. and CSUSM's business school. He is on the board of the Burnham Institute for Medical Research, BIOCOM and The Lincoln Park Zoological Society.
Despite his success and leadership roles, retirement is not in Bruggeman’s immediate future.
“I don’t see it within the next 10 years,” he said.
CSUSM’s College of Business Administration launched its “In the Executive’s Chair” course in fall 2002 and the class is hosted by the Center for Leadership Innovation and Management Building (CLIMB).