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Tuesday, May 1, 2012

CFO SPOTLIGHT – Matthew K. Fust, Onyx Pharmaceuticals

Matthew K. Fust joined Onyx Pharmaceuticals in 2009 as executive vice president and chief financial officer. He is responsible for key functions, including financial planning and analysis, accounting, tax and SEC reporting as well as information technology, facilities and purchasing. As CFO of this fast-growing biopharmaceutical company based in South San Francisco, California, Matt assists the company in key strategic initiatives, including the potential launch of a new cancer medicine, the building of new financial and operational processes and global market expansion.

He's well-equipped to lead these strategic initiatives: he has previously served as CFO for Jazz Pharmaceuticals, Perlegen Sciences and ALZA Corporation. He was also a manager in the healthcare strategy practice at Anderson Consulting. Here, Matt discusses Onyx and his strategic role at the company as well as how the finance organization is supporting market expansion and launching new products, two areas identified in our 2012 CFO Benchmark Survey as top company priorities for this year.

Q. Describe the culture of Onyx Pharmaceuticals.

A. We are focused on developing innovative cancer therapies so for us, everything starts with patients. Our CEO, Tony Coles, is a physician by training and continually reminds us that "patients are waiting." That is the guidepost for our company and gives us a real sense of urgency about our mission. Today, we are on the cusp of a new phase of unprecedented growth, we have 500 employees and we expect to continue to grow in the near-term.

Q. What drives your growth?

A. Innovation drives our growth, and there is strong patient need for innovative medicines. Today, we have one approved therapy, called Nexavar, in two types of cancer. By the end of this year, we could have registration-enabling data or regulatory approvals for three different treatments in as many as seven different cancers. It is unusual for companies in our industry to have built such a full pipeline in a short period of time.

Q. Your business category requires very specific skill sets to be present in its workforce. How do you acquire talent?

A. We are fortunate to be relatively small with an entrepreneurial culture. This environment offers real opportunities to individual scientists and other experts and helps us attract some of the best and brightest in the industry, as well as business and financial minds. Our employees tell us they derive a lot of satisfaction from the flexible and entrepreneurial way that we do business. They work in teams, but have quite a lot of professional independence and enjoy seeing their contributions come to fruition in creating treatments that help patients. That makes us confident that from a human resource perspective, we'll be able to continue to scale up for growth.

Q. Major initiatives are underway for Onyx including international expansion which is driven by major product launches. How do you as CFO support these strategic projects?

A. Expansion, and launches specifically, are always complex undertakings and the finance groups works closely with other key areas of the organization on these activities.

For example, our group is involved in identifying the potential number of patients a new therapy or a new indication could benefit.

We also ensure that we have the right infrastructure on the ground and hire the right talent and level of support as we grow. This involves partnering with in-country experts and outsourced providers and vendors who can help us get a competitive foothold overseas, as well as determining the right size and composition of our sales force.

And, we are closely involved in product supply chain management to ensure that there is sufficient supply to meet patient and physician demand at time of launch and afterwards. In the area of product launches, we do not have in-house manufacturing so it is our responsibility to source and engage third-party manufacturers who will ultimately produce our drugs on a mass scale in a safe and effective manner for patients.

Q. How do you source effective in-country support?

A. On one level, I leverage my own network, developed over two decades of experience in the capital markets and the accounting profession, for referrals. We also work closely with groups within the organization, such as our Onyx Corporate Development and Supply Chain teams, which build a global network of contacts, from executives at other pharmaceutical companies to top vendors in different nations and in the United States.

Q. Elaborate a little more on your expansion plans.

A. In Europe, we are in late-stage development with our drug Kyprolis, the proposed trade name for carfilzomib, for the potential treatment of patients with multiple myeloma, a deadly blood cancer. A clinical trial which may enable marketing approval for Kyprolis in Europe is currently underway and we expect to complete patient enrollment in the first quarter of next year. At this point, we don't have exact timing of when we could potentially have the treatment available to patients in Europe, but we are actively building our European presence in anticipation of potential launch.

We recently established our first overseas office in Zug, Switzerland, which will serve as our European headquarters. We hired a highly qualified commercial lead to build our team there and to prepare for potential launch, since we will market our medicines directly in Europe. The ramp up of an organization always needs to be coordinated closely with potential regulatory decisions, but we believe that we will be ready to fully engage the European market if and when we receive approval.

Q. Are there any barriers to expansion that concern you?

A. As we grow, we need to ensure we are hiring the best people to lead this expansion. Our hiring in the U.S. has gone very well, and our vision and growth make us attractive to the types of employees we need here. In Europe, we are less of a known entity, and we are ensuring that we find talent with an entrepreneurial mindset that reflects that culture we have built as an organization. We are confident that we can successfully manage scaling up in Europe with the right team, and are already making great strides in this effort.

Onyx is ambitious about global expansion and we can see that in Asia for example, we will need to explore a number of different structures. In Japan, for instance, our Corporate Development team's work has led to a partnership with Ono Pharmaceutical, a leading drug developer and marketer that has agreed to drive development of Kyprolis in Japan.

Q. Let's move to process improvement. What are the challenges there for Onyx?

A. We are not old or large enough to be engaged in a lot of process improvements or process reengineering. I see this as an advantage because we can leverage the very latest in new technology and best practices to drive efficiency. We have recently hired a Chief Information Officer to lead our IT effort and continue to build our strategy.

As we become global, our IT platform must be geared to collapsing distance. So we will develop a strategy for effective communications with all our key constituencies. For instance, we recently implemented VOIP for integrated voice and data communications. We will also have a mobile platform for iPads that our salesforce will use in conjunction with a CRM product and we are exploring deployment of telepresence conferencing technology. We need to take advantage of the productivity gains now possible through full integration of front end dashboards such as business intelligence, and budgeting and forecasting applications with our back end systems.

Q. CFOs we hear from almost without exception desire to spend more time as a strategic partner to their CEOs and Boards and less time on accounting, compliance and risk management. How is your time divided?

A. Our CEO Tony Coles specifically requested a seasoned CFO with industry experience and a strategic orientation. He wanted a business strategist who would be a thought partner to him and the executive team and who could effectively interact with the investment community and other stakeholders. As a result, more than half of my time is spent on strategic development, financial strategy and on attracting investment in our company.

I've been fortunate to be able to work with people who I trust and who make me comfortable that my other major responsibilities, such as accounting, compliance and risk management, are covered very well. As new technology is put in place, I can see even more time being freed up for me and members of my team to concentrate on strategic activity. 

What makes Onyx a tremendously interesting company for our employees is our fast growth, the complexity of our business, and the difference that we can make in the lives of patients. These are the attributes that attracted me to the company as well.


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