We talked to DHC’s Executive Leadership Team along with two of BioTechLogic’s founders—Patrick Giljum (Head of Operations) and Tracy TreDenick (Head of Regulatory and Quality)—about the acquisition that brought our two companies together.
First, how does it feel to have reached this milestone?
Tracy TreDenick (BTL Founder and Head of Regulatory/Quality): It’s a milestone we hadn’t even planned for when we founded BTL…we didn’t intend to eventually sell a successful small business. We just made something that mattered to us and it grew accordingly. We’ve worked together for a long time and we’re essentially seeing an unimagined dream come true. Dark Horse gives us the infrastructure, support, and additional colleagues and client base to take everything we’ve worked for to the next level.
Anthony Davies (CEO and Founder): It’s striking to me, the similarities of the journeys our two companies have been on. There does appear to be one difference in intention, which is that I founded DHC with the goal of growing a fully integrated, market-leading consulting practice. In hindsight I wish I’d kept the napkin on which I jotted my plans! For example, I literally wrote down headcount milestone goals: 5, 15, 50, and 200. I didn’t assign a timetable to those goals, but I knew that head count functions as a useful surrogate for capability and revenue in professional services and was therefore critical to sustainable success. I had anticipated organic growth as DHC’s primary driver of progression but then a few years ago we started considering private equity deals and from there, the possibility of M&A. Adding BioTechLogic to the “Group” in Dark Horse Consulting Group gives us our next growth spurt.
How did the two companies eventually connect to one another?
Tracy: We’d been noticing consolidation in the industry and understood that we would benefit from combining with another/larger organization to maintain our competitive edge in the space. And then we got an email from WestView [Capital Partners] about a possible mutual interest in the gene therapy space nearly a year ago. Those sorts of emails tend to come through on a regular basis and they’re not usually legitimate or a good match. In this case, it was both!
Anthony: And from our end, it’s obviously always in our best interest to keep an eye on what is happening in the space and identify when there might be a player of interest, either as a competitor or potential partner. There are not many organizations like this in a field like CGT but from time to time Westview would put one in front of us for consideration. Often the fit just isn’t obvious, but in the case of BioTechLogic it was compelling.
BioTechLogic was founded in the biologics space. How did you find your way into the field of cell and gene?
Tracy: This is a fantastic story about both the degree to which healthy client relationships matter, and the role that luck can play.
Anthony: Which reminds me of a saying I often borrow: the harder you work, the more luck you have.
Tracy: Exactly! In this case we were in the right place at the right time doing the right work. So, this is back in 2016/17. We were introduced to someone at AveXis through our colleague Rachel Houp. AveXis was developing an AAV gene therapy to treat spinal muscular atrophy (SMA). Rachel’s contact asked for CMC regulatory writing assistance that led to our writing Module 3 and preparing most of the support documents around process validation as they prepared for their BLA. As most reading this will probably have already recognized, that product went on to become Zolgensma®, one of the earliest gene therapies, and still the most commercially successful.
Over time many of us ended up working with various team members at AveXis whose hard work and efforts along with support from the BioTechLogic team helped launch Zolgenzma into a commercially approved product; it became our entry into the gene therapy world. The result of this experience was even bigger than just that one (admittedly huge!) product, though, because we worked with such a wide group of incredible people who eventually left AveXis after it was acquired by Novartis and ended up working at many other CGT companies. Our n of 1 grew into 20 different clients, who eventually became 70 different clients. The same gifted people kept moving around and building new companies as the field expanded.
Rob Allen (DHC MP and GM of DHC Europe): One of the many striking similarities between DHC and BTL is in building these close client relationships that can end up bearing fruit for both parties for years to come…even decades. Sometimes the relationship stays at a company; for example, there are a not insignificant number of cases where a DHC or BTL consultant becomes one of the longest-standing employees at a company because of the value they hold that leads to recurring engagements. And other times the relationships spin out across many other companies, as individuals organically move on from place to place.
Katy: There are still a somewhat limited number of examples of successfully developing a gene therapy through approval and commercial success, and BioTechLogic was deeply involved in the biggest of them all. This is the perfect example of how bringing in talented and experienced consultants can take a product line all the way through to that end goal, and how the lessons they’ve learned through that hard-won experience can benefit their subsequent clients as well.
What about Dark Horse? Is DHC the reverse: beginning in CGT and then adding in some biologics work?
Anthony: There are certainly some engaging reverse parallels, which is a huge part of why our fit is proving to be so natural. Despite our strong focus on CGT, we have done a not-insignificant amount of work in traditional biologics, usually when a prior CGT client asks us to work on other programs in their portfolio.
Katy: When these non-CGT opportunities come in, we look closely at our capabilities to ensure we are able to support the ask with the market leading level of expertise expected of DHC. But we often are, due to the diverse previous experience of many of our consultants in industries both within and outside of CGT.
Anthony: And despite our CGT focus, we welcome these opportunities as a way to continue to learn from more mature industries which are at the level where CGT is hoping to be someday. BioTechLogic’s success in building their book of CGT business was a critical driver for entering into discussions for an acquisition. But also their expertise in vaccines, antibodies, oligos, peptides, and the like can and should be leveraged into the work being done in CGT. Newer industries are made stronger by clarity into what has and has not worked before, particularly in fields with so many more approvals and commercial successes.
Patrick Giljum (BTL Founder and Head of Operations): To that point, yes, we’ve had a variety of different clients over the years from peptides to oligonucleotides with lots of recombinant proteins, both using bacterial and mammalian systems. We’ve simply seen so many processes over the past 20+ years and it’s intriguing sometimes how things come around. For example, we currently have new clients working with E. coli processes. There are so few E. coli experts anymore because they’ve moved on to more advanced expression systems. But a practice like BTL still holds that experience, which can (and has!) become relevant again over time. I view it as a balancing act between retaining the knowledge that has come before without stagnating. We achieve that by being actively involved in the latest process technologies as well.
We’ve got two of BTL’s Founders here with us today, but not the third. Can you speak to why that is and how his future plans impacted the timing of the acquisition?
Patrick: Definitely. We’re talking about Peter Dellva, BTL’s Head of Business and Finance. He worked at Searle/Pharmacia/Pfizer back in the day along with me and Tracy, and the three of us came together to found BioTechLogic in 2003. He’s been one of our primary drivers for these two+ decades; he runs the business end of things. We’ve remained small enough that one person could do most of that work, whereas DHC had intentionally built up a more robust infrastructure to allow for scalability into the future headcount milestones Anthony mentioned.
Where that becomes relevant in this discussion is that Peter was interested in retiring and that really brought the timing into focus for all three of us. We didn’t want to simply outsource the critical roles that Peter has played, and with DHC we don’t have to. The Dark Horse “enabling functions” group is extensive and has been built into the practice intentionally. Peter can transition the work he’s performed to that group, and then retire on his own schedule. Just like everything we’ve experienced in this acquisition, it’s a win-win for both parties…and also for our clients.
Do you anticipate further changes in personnel?
Tracy: No.
Anthony: Agreed.
Did any surprises crop up as you were performing your due diligence on the acquisition?
Katy: I would say the only surprise from my perspective was one of magnitude; the deeper we got into due diligence, the more it became clear how good a fit the two organizations were. As Anthony mentioned earlier, we’d done early diligence on a few organizations previously that turned out not to be great fits. But in this case, the more we learned, the more obvious the fit became. For example, we knew early on that BTL’s relationships with their clients must be strong based on the extent of repeat business, but nonetheless, as we conducted reference calls with clients I think we all were struck by how effusive BTL’s clients were about the level of support they received from BTL and how essential their support was to the client’s ongoing success. Another pleasant surprise that I think is likely related to the depth of the client relationships that both DHC and BTL have built is that there was surprisingly little overlap between our historical client bases. I believe this is because each firm has built deep relationships with their existing clients who have stayed with them over many years, rather than hopping from one firm to another for their support.
Rob: I agree. I’d hoped to find something similar to DHC in terms of the level of rapport we build with our clients, but was surprised by the degree of alignment we found. Something near and dear to my heart at Dark Horse is how we build and maintain relationships. We know how critical these are to a successful consultancy, but we don’t go about forging those relationships transactionally. These are real connections that go far beyond just the work we can do together. I knew BTL had the same intent but intentions don’t always match up with reality, do they? In this case, though, they did: BTL’s relationships aligned completely with our values. We are intrinsically culturally on the same page.
Anthony: I’ve been referring to the two groups as finding our “Cinderella fit.”
How do you foresee this new combined organization working from the client’s point of view?
Sanjin Zvonić (DHC Senior VP of BD): I came into this discussion later than the Managing Partners, as you would imagine, and as soon as I heard of the possibility of acquiring BioTechLogic I was thrilled. We knew them as successful competition…in fact, since going public with the news I’ve heard from a wide variety of clients that the decision about who to work with always came down to DHC vs. BTL. We were the two preferred options and now we are able to combine forces.
This partnership allows DHC to offer more comprehensive services spanning into technical realms, beyond the advisory services we are known for. The BTL team will allow us to collectively deliver these hands-on, boots-on-the-ground CMC offerings in a manner that is consistent with the promise of the Dark Horse brand: an unparalleled level of expertise. Our shared perception was that BTL delivers services with an exceptionally high level of expertise, credibility, and emphasis on customer satisfaction, just as we’ve always done on the DHC side. Meanwhile, DHC will add greater strategic capability, nonclinical and clinical services, and market/business expertise to BTL’s clients. Together that allows us to customize more offerings to solve for an even greater variety of client needs.
Is there a future point at which the two organizations will have thoroughly integrated?
Katy: We don’t know what we don’t know yet. For the foreseeable future, though, BioTechLogic will be operating as an independent subsidiary with a shared Enabling Functions group, and the ability to cross-staff projects between the two organizations to optimize support for our clients. We’ll continue to organically work through details of what (if any) integration could take place as we get to know each other as organizations.
How will a client know whether to query BTL or DHC to discuss future projects?
Sanjin: An easy first step in combining the Enabling Functions team was to merge our business development groups. A single query to bdteam@darkhorseconsultinggroup.com or via the DHC consult form will get to the right place no matter what. Alternatively, a client can just reach out to whoever they’ve worked with in the past. All of us are still here—we just have more colleagues with which to mix and match for client needs.
What are some scenarios in which a client may find themselves working across both DHC and BTL teams?
Sanjin: The first example that comes to mind is in regulatory filings: work that both organizations historically support and at which we both excel. Both of us have countless examples of providing everything up to and including full CMC authorship of a wide range of regulatory filings from early preclinical stage through BLA/MAA in a wide range of global jurisdictions, and both of us offer regulatory publishing capabilities (through a partner). With the addition of DHC’s nonclinical and clinical experts, our collective group can now own the entire filing. With the addition of DHC’s panel of six ex-regulators, we can layer regulatory strategy, positioning, and review of draft filings on top of both organizations’ top-notch authorship capabilities.
Katy: On the slightly less tangible side, keep in mind that each individual who joins the group also adds to the shared “hive-mind”, the bank of life and work experiences our group offers to one another. At DHC, we have an internal messaging channel in which anyone can ask the group at large for advice or guidance. It gets used daily and I’m constantly amazed at the breadth and depth of our collective experience with even the most seemingly obscure question. Not only does BTL add to that group 13 people with decades of experience, but as Anthony mentioned earlier, the breadth of that experience spanning more mature industries like antibodies, peptides, oligos, and vaccines will likely bring additional expertise well beyond the linear scaling by number of employees. It adds up so quickly, the way in which a shared bank of knowledge enriches the value each team can provide for a client.
Rob: Another excellent example is on the quality side. Both organizations do a huge amount of quality work but we have complementary strengths. BTL, for example, has a popular QMS-in-a-box offering; they do a lot of work in building quality systems from the ground up. On the DHC side of the equation we have two UK-based, EU eligible QPs and a former DMPQ inspector whose expertise could be layered on to those BTL offerings. Also, our nonclinical and clinical work gives us critical experience in GLP and GCP to complement the 20+ years of GMP experience that BTL has.
Katy: And the range of modalities our teams have experienced provide a comparable range of knowledge. On the process validation/PPQ front, for example, DHC has thorough experience in CGT but BTL’s group offers that experience across a wider range of modalities. Both DHC and BTL frequently perform statistical analyses of client data, but one of BTL’s Partners (David Federoff) went back to get a Masters in Statistics to enable support of a wider range of complex statistical analyses. The opportunity to collaborate between the two groups is invaluable. Simply put, a stable full of additional experts provides not only more bandwidth but a broader set of experiences from which to draw.
Anthony: I have a reputation for despising words like synergy and cross-pollination…they’re desperately overused. That said, there’s simply no point in M&A without experiencing synergy. The maths don’t work without it, period. As we evaluated the prospect of this merger, we were deeply attuned to whether we saw synergy between the organizations. There are dozens of other examples we can give, but hopefully the above gives a sense of how deep the fit is between the two organizations and how well we believe our capabilities will complement one another.
John, we haven’t yet touched on the question of your corner of the world. What does this mean for our APAC clients and employees?
John Ng (GM of DHC APAC): It’s a two-fold win for us in the APAC office. On the DHC side we have been aware of so many opportunities in biologics and vaccines and BioTechLogic obviously brings with them a huge advantage in experience on that side of things. BTL’s strong book of business here, especially in Korea, is another point of synergy. I anticipate that DHC will be able to offer BTL’s clients some expanded options if they wish. I think back to what Tracy said at the beginning about a single client relationship growing as the industry evolves and people move from company to company. I anticipate that we’ll see a similar expansion here in our part of the world as we build on one another’s networks and clientele.
Anything we haven’t touched on?
Anthony: I’d just like to close by reminding us all that a consultancy’s assets are its people. As we’ve gotten to know the BTL team and spoken to their clients, the value of these dozen+ consultants have been abundantly clear to us. Clients were not only thoroughly satisfied with the value they’d received but they wanted to maintain the relationship. Many of these clients are big enough and had enough lead time to have theoretically brought someone in house to do the long-term job they retained BTL to do, but they chose not to. Why? Because these consultants belong there. They’re part of the ecosystem and are extraordinarily dependable. The intentionality of these connections is how you know you have something worth keeping. And for all the discussion of complementary capabilities and experiences, the similarities between that and the way in which we engage with our clients at DHC is the essence of our “Cinderella fit.”
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