🌉 Bridging Finance and Pharma: Insights From Arvind Rachamadugu
by Joey Bose and Aruesha Srivastava
Disclosure: The views and opinions expressed here reflect only those of Mr. Arvind Rachamadugu and not those of any entity or organization with which Mr. Rachamadugu may or may not be affiliated. This interview has been edited significantly for length and clarity.
Ever wondered what it's like to navigate the high-stakes world of biotech from the inside? Buckle up, because Arvind Rachamadugu's interview is a rollercoaster ride through the thrilling ups and downs of drug development, financial strategy, and leadership in one of the most cutting-edge industries out there. From his journey as a chemical engineer turned Wall Street banker to his current role steering biotech ships through stormy financial waters, Arvind drops knowledge bombs left and right. He dishes on everything from the art of reading cash burn charts (it's more exciting than it sounds, trust us) to the potential game-changing magic of digital twins in clinical trials. Whether you're a biotech newbie or a seasoned pro, this chat is packed with nuggets of wisdom, sprinkled with a dash of personal insights, and topped off with some solid advice for the next generation of biotech trailblazers. So grab a coffee, settle in, and prepare to geek out – biotech style!
Joey Bose - P&P
Arvind, thanks for joining us today, we are super excited for this conversation. Let’s jump right in! For some background, can you tell us a bit about your professional journey, and what sparked your interest in the biotech and pharmaceutical industries?
Arvind Rachamadugu - Biogen
Looking back, it’s interesting how my path to biotech seems almost inevitable, though I didn’t realize it at the time.
I majored in chemical engineering with a concentration in biotechnology during my undergrad at UVA. That was my first real introduction to the biotech sector. I spent some time in undergrad doing bench research under a PhD candidate studying protein aggregation.
But after graduation, I took a product design and engineering role at Procter & Gamble in consumer products, and I never really touched a lab again. One of the great things about working at a Fortune 50 company like P&G is the opportunity to gain exposure to many different aspects of the business. I quickly realized that the most strategic thinkers were often found in marketing and finance, and many of them had MBAs. That inspired me to go back to school, get my MBA, and broaden my perspective on what I wanted to do.
After business school, I made the leap to Wall Street, joining Barclays as an investment banker to cover the healthcare sector. Healthcare is an incredibly complex field, as everyone in the industry knows; I have never been one to shy away from steep learning curves. I saw it as a space with endless opportunities to learn and figured there would be something within healthcare that would capture my interest.
At Barclays what I really enjoyed, particularly on the biotech and pharma side, was the binary nature of outcomes and the resultant impact on balance sheets and cash flow, especially for smaller organizations.
To break that down, I found it fascinating to explore how companies think about capital allocation and de-risking their financial profiles both before and after a critical readout. If you're a company with just one or two key assets, it's often a make-or-break situation. Understanding what your balance sheet looks like before and after a readout, how your investor base might react depending on whether you wait for a positive outcome, and what all this means for your cash runway—these are critical considerations.
It’s a unique way of viewing the world, and few industries force you to think in such a life-or-death decision tree matrix, particularly for smaller companies. This intersection of finance and high stakes is what has kept me deeply engaged in the biotech and pharma space.
Joey Bose - P&P
My path wasn’t as illustrious as yours, but somewhat parallel. I transitioned into biotech after working in life sciences investment banking, though at much smaller boutique firms, so my experience was quite different. Still, we ended up on similar trajectories—starting with a STEM degree, moving into the business side, and finally into the industry itself. This brings me to the next question: the trend of combining finance with STEM for a cross-functional skill set. I think you've already touched on this, but when you decided on an MBA, was the industry always your ultimate destination?
Arvind Rachamadugu - Biogen
I think I always had some interest in healthcare, particularly in the biotech and pharma space, but I didn’t fully explore it until I went into banking and gained real exposure to various types of healthcare companies. That’s when I found myself gravitating towards biotech and pharma.
To address the first part about finance plus STEM cross-functional skill sets, I’ve come to appreciate two key things about having a STEM background. First, it taught me a lot about myself and how I learn best, which required a level of introspection I hadn’t needed before. STEM pushed me to figure out whether I’m more of a visual, auditory, or kinesthetic learner. That’s something I think many people don’t discover early enough. STEM forces you to understand your learning style because there’s so much to grasp in a short amount of time. If you don’t know how you learn, it’s hard to keep up.
For example, as a chemical engineering student, I struggled to grasp the concept of a distillation column through diagrams, numbers, and formulas on paper. It wasn’t until I saw a mini distillation column in our lab that everything clicked. Seeing it in person made me realize that I’m a visual learner. I finally understood how temperature and pressure are used to separate compounds based on their boiling points, and the entire process made sense. That was really an “aha” moment for me, helping me understand how I learn across all subjects.
The second thing STEM taught me is the importance of integrating knowledge from multiple disciplines. This is why people with finance plus STEM backgrounds are often so successful. For instance, in chemical engineering, you can’t design a plant without drawing on your knowledge of fluid dynamics, thermodynamics, physics, math, etc. This interdisciplinary approach is fundamentally different from other majors. For example, in economics, you might not need to constantly draw on your psychology or English literature classes. But in STEM, you can’t afford to forget the material you learned in previous courses—you have to integrate it all.
Joey Bose - P&P
That’s a great point. Did you find that your learning style changed when you went into investment banking or were you employing the same kind of visual strategy?
Arvind Rachamadugu - Biogen
I think it was about the same in investment banking. What I really enjoyed—and where I think I did best in—was taking the dollars and cents from Excel and translating them into meaningful charts and graphs. These visuals made the data interpretable for leaders and executives, enabling them to make informed decisions.
Joey Bose - P&P
Can you give me an example of what one of your chart might look like?
Arvind Rachamadugu - Biogen
I can connect this back to what we discussed earlier. Depicting cash burn over time for a small biotech company isn’t just a single chart. If they have an upcoming readout, you need to help them understand how their balance sheet will look under different scenarios. For example, they might have a certain amount of cash and equivalents with a positive readout, and a different amount with a negative one.
Then, there’s the consideration of when to raise capital—whether in Q1, Q2, or another year—and how that timing impacts the company’s financials. It’s a lot to unpack, but a simple graph showing cash burn over time, with dotted lines indicating potential outcomes, can make a big difference. For instance, you could illustrate that they might end the year with $100 million, but if they raise capital beforehand, they could end with $200 million. This also mitigates the risk of facing a cash crunch in the next year, particularly around a key readout.
Translating those dollars and cents into actionable insights—like hey, here is a decision you need to make today—is really what keeps me coming back for more.
Joey Bose - P&P
That makes perfect sense, and I find myself doing the same. I'm constantly managing our cash flow and strategizing around the right timing for raising capital and the associated costs. The way we’ve been raising money is a very expensive process, with the overall cost of capital reaching upwards of 30%. So, we have to ensure that we allocate a significant portion towards marketing, which can sometimes take up to 20% of the total raise. Although it’s amortized over time and we don’t need it all upfront, it can still significantly impact our cash balances, especially as we’re pouring money into this phase one program. I might need to huddle up with you to learn how you approach these situations and develop contingency plans.
Now, let’s dive into the next topic. Suppose I'm a clinical trial sponsor specializing in drug discovery but lacking experience on the clinical side. What do you think is the single most important thing I can do during the preclinical development phase to maximize the chances of a successful phase one? In other words, what's the most common screw up that happens early on killing phase one programs.
Arvind Rachamadugu - Biogen
This goes into drug discovery and development, which is somewhat beyond my usual remit, but I’m happy to opine. I think there are two key considerations. First, establishing a strong chain of translatability is crucial. This means creating a clear and consistent connection between the molecular structure, the preclinical disease model, and the human disease model. Many programs never make it to the clinic because sponsors, often wisely, decide not to advance them based on non-clinical data.
For example, even if a tox package is clean, if there’s no clear chain of translatability from the preclinical mouse model to non-human primates, and then to what we expect to see in the clinic—especially when evaluating a PK/PD profile—there’s little reason to move forward. For smaller organizations, there might be a tendency, for better or worse, to push forward rather than kill a project early, even when there are signals suggesting it’s time to reconsider.
Joey Bose - P&P
So what do you think they could do to address this translatibility issue?
Arvind Rachamadugu - Biogen
First, having external advisors who can help you critically evaluate what the data might mean when it transitions to the clinic is crucial.
Second, it’s important not to overreach in your Phase 1 trial. Phase 1 needs clear, focused objectives, so understanding how much risk you’re willing to carry into Phase 2 is key. For instance, setting appropriate inclusion and exclusion criteria is vital—don’t make them too broad. You should design these criteria with your ultimate patient population in mind, while also giving yourself the best chance to succeed in Phase 1. Then, you can take more calculated risks in Phase 2, such as exploring safety across different dosage levels and beginning to assess efficacy.
The primary goal of Phase 1 should be to identify whether the signals observed in preclinical studies will safely translate to when exposed in humans. Unfortunately, many small biotechs try to accomplish too much in Phase 1, thinking this is what larger sponsors want to see, but that’s not necessarily true.
In my BD work, we often review Phase 1 or post-Phase 2 assets and think, 'I wish we could have been involved in designing that Phase 2,' because we might have approached it differently.
Joey Bose - P&P
Right. So, what I’m hearing is that in Phase 1, it's essential not to overextend. Focus on de-risking safety as much as possible while balancing concern about efficacy signals, especially those that are statistically significant. It sounds like the key is to give careful consideration to your target product profile before entering the clinic, and to maintain a long-term perspective. This way, you can strategically plan how Phase 1 will support your objectives in Phase 2.
Arvind Rachamadugu - Biogen
That’s an extremely good point. Mapping out a target product profile and a minimum viable product profile is crucial. Defining what we need to believe for an asset to succeed in the market underpins the entire clinical development plan. This approach forces you to be both internally and externally focused. Internally, it’s about understanding what the asset can realistically deliver in terms of safety, efficacy, route of administration, dosing paradigm, etc. Externally, it’s about anticipating what will be successful in the market. Understanding what you need to achieve for success at launch helps align everyone on not just what you aim to deliver, but also on what you may need to sacrifice.
Joey Bose - P&P
Yes, there’s definitely a lot of uncertainty in trying to predict how the treatment landscape will evolve over the years. It’s a bit anxiety-inducing, especially for our osteoarthritis program, which aims to develop a first-in-class drug. There are no approved protease inhibitors despite numerous attempts by big pharma, often with a somewhat myopic approach in our view.
Right now, the landscape is dominated by non-opioid pain relievers, corticosteroids, and emerging cell therapies. Figuring out what physicians and patients will want in this evolving landscape, when we won’t fully know the competitive environment for another four or five years, is challenging. But I guess that’s part of the process—you have to embrace the uncertainty and hope you can afford multiple phase three trials.
Arvind Rachamadugu - Biogen
That's right. Connecting it back to finance, figuring out the nuance here is like understanding whether you're going to need multiple phase three clinical trials so that you raise enough money in advance to cover those costs.
Joey Bose - P&P
Right, so this is a good transition. It seems you spend a significant amount of time managing CROs. Would it be fair to say that you play a major role in overseeing these CROs, which in turn influences the management of the clinical trials themselves?
Arvind Rachamadugu - Biogen
Yes, I partner heavily with our clinical operations team at Biogen, who are on the front lines ensuring that trials are conducted properly, sites are monitored, and patients adhere to protocols. While they handle the day-to-day management with CROs, my role is to ensure that the financial reporting aligns with our expectations. It's often during financial reviews—whether through invoices or forecasts—that potential issues come to light.
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We do a lot of CRO management, we're the ones that are accountable to integrate the business side with the numbers and the dollars and cents of it all, which maybe the CROs aren't so motivated to do, as much as my role would be. This makes the selection of a strong CRO partner really important. I think Cytonics has done really well and strategically chosen Australia for phase one trials, not just for the R&D tax incentives, but because that's a region of the world which is looking to expand their presence in the clinical trial space, and rightfully so.
As the capabilities develop and pharma services and companies realize that's a place where they can create value, it's a perfect time to say, hey, I'm open to this as an idea–show me what you have to offer. Since they're trying to still prove out the model that's really important, I think it's really strategic and thoughtful to pick a CRO in a place like Australia. Another thing that’s important is to select a CRO with a proven track record in execution, particularly in maintaining data integrity through to database lock. A strong relationship between the CRO and trial sites is crucial to this process.
When we outsource to a CRO, we’re placing a significant amount of trust in them—both from our perspective and that of the patients. Therefore, selecting the right CRO is not just about evaluating RFIs and cost; it’s about finding a partner who can be relied upon to deliver at every stage.
Joey Bose - P&P
Right. So you clearly have a very strong leadership skill set. I can tell just from talking to you and the description of what you do: how you are managing CROs, keeping everyone in line, and making sure that they stick to the budgets. What leadership principles do you follow to maintain a motivated, high performing team?
Arvind Rachamadugu - Biogen
I’d say two things. First, to keep everyone motivated—not just those who report directly to me but across the board—it's important to show up as a finance partner who’s eager to understand the business and operations. For me, working with numbers and Excel is second nature, so when I come to the table ready to learn, it’s always well-received. I believe that learning is at the core of how I motivate my team as well. It’s about recognizing that everyone is driven by different factors, and understanding what motivates each person is key.
What I’ve found is that the most successful people are those who value and prioritize continuous learning. I always tell my team that if you’re focused on chasing titles or promotions, you might end up feeling like you never have enough. But if you seek out opportunities that challenge you and help you grow, you’ll find much more fulfillment. I don’t view career progress as two steps forward and one step back. Instead, I see it as two steps forward and maybe one step to the side.
Sometimes, a lateral move is exactly what you need if it allows you to learn something new. When I can help someone reframe their perspective this way, it often helps them see the bigger picture. Life is a marathon, not a sprint. There will be times when you need to sprint, but as long as you’re moving toward something meaningful and continually learning, motivated individuals will always find success.
Joey Bose - P&P
Very wise words and eloquently said. So what are some of your personal and professional long-term goals?
Arvind Rachamadugu - Biogen
That’s a really interesting question because my perspective has evolved so much over the years. Personally, I’m extremely happy. I’m married, have a daughter, and another daughter on the way. Becoming a parent teaches you a lot—first and foremost, it makes you realize you should call your own parents every day, if possible, and thank them. It also shows you that there’s so much more to life than what you’re doing in your own little world. So on a personal level, I feel very fulfilled.
Professionally, there are a few things I’ve always wanted to achieve. Serving on the board of healthcare companies has been one of those goals, and it’s exciting to see those opportunities starting to come more frequently. It’s something I’m glad to be checking off my list, so to speak. Another long-term goal has been to become a public company CFO. That’s probably a bit down the road for me, and it’s not about wanting that position tomorrow or even within the next five years. It’s more about finding the right company and the right timing. But it’s definitely something that’s high on my list.
Joey Bose - P&P
Sounds like a very full and rich life, that's great perspective. So turning back towards the biotech sector, what excites you most about the future, where the entire sector's heading?
Arvind Rachamadugu - Biogen
I think the healthcare industry is incredibly complex—not just in terms of what's happening within the sponsor space, but also considering the broader context, including policies in Washington, D.C., and global developments. What excites me most, though, is the significant investment being directed toward accelerating clinical trial development. Clinical trials can take an exceptionally long time, especially depending on the therapeutic area and the prevalence of the disease.Some phase three trials can take multiple years to enroll, and even then, there’s uncertainty about the data quality from the first patient enrolled to the last.
If we can accelerate clinical trials, we can fundamentally change the ROI landscape for pharma. One specific solution that stands out to me is the concept of digital twins. This approach leverages EHR and patient-level data to predict how a disease might progress in an individual, potentially eliminating the need for a control group. It’s an incredibly intriguing concept. If this approach gains traction, not just among sponsors but also regulators and payers, it could significantly reduce sample sizes and minimize or even eliminate the need for placebo arms in trials.
This is particularly compelling because many patients are hesitant to join phase three studies due to the chance of receiving a placebo, even with a slightly better than 50% chance in a randomized trial. With the idea of digital twins, we could model the control group, making every participant effectively part of an open-label study. This would reduce costs, shorten trial durations, and, most importantly, get drugs to patients faster. Moreover, this approach could open up opportunities in therapeutic areas that were previously less viable, particularly in rare diseases where prevalence is low. With lower trial costs, the ROI becomes more attractive, enabling broader investment in areas that were previously overlooked.
Joey Bose - P&P
Now, could machine learning and inference could be used here, or do you need real world patient data to create that synthetic arm?
Arvind Rachamadugu - Biogen
Real-world data is essential. When you consider what regulators and payers are likely to prioritize, we're not yet at a point where machine learning alone can satisfy those demands. People want to see real patient data—how patients actually progress—and then aggregate that information into a model that accurately reflects these outcomes. Currently, this is done through natural history studies, which, while labor-intensive, are crucial for understanding disease progression. These studies are particularly important when running a phase one or two trial, as they provide a benchmark against which we can compare open-label study data to determine if patients are truly benefiting.
The concept is similar when it comes to digital twins, but here, the difference lies in leveraging AI and large datasets to create models that can inform control arms in larger phase two or phase three studies. However, sponsors need to become more comfortable with this approach. In practice, whenever we evaluate AI applications, whether for trials or financial platforms, we always want to unpack the "black box," even if the service provider is reluctant to do so. Understanding what’s inside that black box is crucial for trust and validation.
Joey Bose - P&P
I'm wondering if there's enough data out there to actually train, because you would need data that captures the relevant endpoints for the trial, right?
Arvind Rachamadugu - Biogen
Yes, and I agree—the current state of digital twins isn't quite there yet. I think I made this clear, but just to reiterate, they’re not trying to model the treatment arms, they’re primarily focused on modeling the control and placebo arms.
You bring up a crucial point: do we have sufficient data to accurately predict how patients in a placebo arm of an Alzheimer’s trial, for example, will score on something like the CDR-SB scale? It might be easier to estimate minimal or no amyloid-beta aggregation, but translating that into clinically meaningful outcomes—such as activities of daily living or other relevant scales—that's probably a very big bridge to cross.
Joey Bose - P&P
That is some great insight. So let's turn our attention a little bit towards Cytonics and your role here. What made you want to get involved in our program and what do you think is going to really be critical to our success?
Arvind Rachamadugu - Biogen
First off, it's an honor to be part of the team. It’s rare to find programs and assets that are grounded in strong scientific merit and supported by real revenue that haven’t already been snapped up. That’s what makes this opportunity so compelling. The platform has been de-risked in several ways, yet it still involves enough risk to be bold and appealing in a market with a large TAM. That’s why I decided to join—it's a truly unique asset, and we all recognize that. The team is excellent, and as we continue to de-risk the program, I believe sponsors will increasingly see this as a legitimate opportunity that’s already been through phase one and has been in the clinic.
The credibility of the team is a major strength, and that can’t be overstated. Sponsors often take a step back and ask themselves, "Is this team real?" In our case, the answer is a resounding yes, and that’s a significant advantage. My role here is to support you, Joey, and others as we navigate this initial phase in the clinic. We need to carefully manage our relationships with CROs and sites, anticipate any hurdles or speed bumps, and think ahead about what larger pharma companies and sponsors will want to see before they’re ready to invest. It’s crucial to run the trial in a way that not only appeals to investors but also considers how other players in the space will react.
Joey Bose - P&P
Wow, that's a really good point. Can you give me an example?
Arvind Rachamadugu - Biogen
Sure, It’s easy to design a trial that quickly hits milestones. You could set broad inclusion and exclusion criteria, adjust the sample size to be less robust, or choose simpler endpoints to expedite the process. You could then circulate updates about hitting FPI, reaching 50% enrollment, or nearing completion. While that might attract capital, it doesn’t necessarily align with the long-term vision. The treatment paradigm today may suggest one approach, but sponsors might view the landscape very differently five to ten years from now.
As we’ve touched on, you can’t design a trial solely to address today’s standard of care. Instead, you need to build a trial, program, asset, and TPP that anticipates what the treatment landscape will look like at launch and how the key players will perceive it at that time. This requires asking tough questions—questions that smaller companies might avoid because they often lead to difficult decisions.
For example, the team might advocate for narrower inclusion and exclusion criteria, even if it increases recruitment time by 50%, while business development or the CEO might push for broader criteria to expedite the process. This is a challenging decision, especially if you’re facing a tight cash runway. Do you raise more capital to follow the science, or do you prioritize speed and accept the associated risks? There’s no clear right or wrong answer, it depends on the situation.
A part of my role is to help the team navigate these decisions. It’s never about following just one path–it’s about evaluating all the options and determining the best course of action.
Joey Bose - P&P
Absolutely, that’s the challenge, and the fun, of it all. You have to model out various scenarios and carefully choose what you believe is the best path forward, all while being able to justify that decision. For cash-constrained companies, sometimes you have to focus on hitting interim milestones. Maybe you’d prefer to go for a Phase 2A, but instead, you stick with a Phase 1B and make the most of what you can achieve. You need to show the market progress, and as you move into more mature trials, your focus has to shift from less sophisticated public markets to more strategic considerations.
It’s been really great discussing all of this with you. You have such a deep knowledge base, and it’s truly impressive, especially given your age. As a final question, what advice would you give to aspiring young professionals in the biotech and pharmaceutical industries?
Arvind Rachamadugu - Biogen
In the biotech space, it's really all about staying informed. You have to keep reading, just constantly absorbing information. One of the best things about where we are in 2024 is the incredible access to resources covering biotech and pharma. There's really no excuse not to learn—whether through podcasts, platforms like Endpoints or Fierce Biotech, or other forums. It's crucial to stay updated because the landscape is always evolving.
Some people might think healthcare is slow or even boring, but I don’t see it that way at all. It’s actually extremely fast-paced, not just because of the constant shifts in focus by sponsors but also due to the dynamic nature of pharma services players who are shaping the industry in the background. Regulatory changes are another big factor—what’s happening on that front can shift based on who's in the White House or who's leading the FDA or EMA.
So, the landscape is constantly changing, which means there's always something new to learn. If you ever feel overwhelmed, it helps to connect with someone in the field who can guide you. Just say, "Hey, I’m really interested in this aspect of pharma or biotech—what should I focus on to learn more?" You don’t need to grasp everything on day one; the beauty of this field is that it's a lifelong learning journey, and even after a lifetime, you won't know it all. No one expects you to. The only real barrier to getting started is yourself—it’s an internal hurdle. That’s what I love about it. It challenges you to prove to yourself that you’re genuinely interested, not just curious.
Building a network of like-minded people is also crucial. For me, it's not just an eight-to-five thing. I’m constantly thinking about it because I’ve surrounded myself with people who are just as passionate. And what I’ve found is that this creates a rising tide that lifts all boats.
Joey Bose - P&P
On that note, I think that’s a great piece of wisdom, and a perfect place to wrap up. Arvind, it’s been an absolute pleasure. Thank you so much for sharing your insights—this interview is packed with valuable takeaways. I’m definitely going to revisit some of the points we discussed. It’s also been a real pleasure having you on the team, we’re truly grateful to have someone with your big pharma experience guiding us as we navigate the complex challenges of clinical studies.
Disclaimer: The contents of this article are not to be construed with investment advice. The information presented in this article is a compilation of current events, technical analyses, corporate press releases, and the author's personal viewpoints about the biotechnology industry. While efforts have been made to provide accurate and timely information, there may be inadvertent errors, omissions, or inaccuracies. Therefore, investment decisions should not be made solely based on the content of this article. The article may contain statements that are forward-looking in nature, encompassing predictions and future expectations that are subject to inherent risks and uncertainties; as such, actual outcomes may significantly deviate from those expressed or implied herein. This article serves purely as an informational and entertainment resource, and should not be construed as an endorsement to purchase or sell any financial securities. Prior to engaging in any investment activities, it is imperative that you conduct comprehensive due diligence and consult with a qualified financial advisor.