VC giant NEA recruits biotech vet Carol Gallagher to join its ranks of dealmakers

New Enterprise Associates Partner Carol Gallagher

Carol Gallagher is settling in well to her new career as an investor. After more than 25 years in drug development that culminated in a corner office at Calistoga Pharmaceuticals, Gallagher decamped for the venture world last year, and now she has joined one of the world's largest VCs, accepting a position at New Enterprise Associates (NEA) to help nurture the next generation of disruptive biotechs.

As a partner, Gallagher joins a 14-member investment team led by former MedImmune CEO David Mott, coming aboard with the broad mission of ferreting out new opportunities in biopharma, agnostic to therapeutic area and stage of development.

Gallagher comes to NEA from Frazier Healthcare, itself a well-heeled biotech backer, which she joined as a partner last October. Back then, at the onset of her plunge into the VC world, Gallagher was unsure of just which path she wanted to take in the long term, she said. Spotlighting innovative companies was plenty rewarding, but there remained the allure of digging in and taking an operational role at a newly founded company.

But through her year at Frazier, Gallagher realized things didn't have to be so black and white. As a VC, Gallagher discovered she could at once take a bird's-eye view of macro trends in the industry and swoop down for hands-on work with fledgling biotechs, and her experience in the trenches of R&D made her "an investor who understands how hard it is" to develop new therapies, she said.

Now she's all in on VC as the next chapter in her career, and NEA, with its billions of dollars in capital and pedigree of success, presented an attractive next step, Gallagher said. From here on out, her focus is on finding and developing the right teams around the right assets, she said, employing many of the lessons she learned in her three years at the helm of Calistoga.

That company, which Gallagher took over in 2008, was built around some preclinical assets once owned by the former Icos Pharmaceuticals, including a PI3 kinase inhibitor that had shown promise in asthma and COPD. But Icos, a midsize biotech, lacked the scale to pull off the kind of expansive clinical program to develop an asthma treatment. So the program fell to Calistoga, whose fresh eyes and innovative approach found its true potential as a therapy for B cell malignancies. Gallagher and company's work made an impression on Gilead Sciences ($GILD), which snapped up Calistoga in a 2011 deal worth up to $600 million, and the treatment, idelalisib, won FDA approval to treat three types of blood cancer in July.

The moral of that story is that while it's important to have good science on your side, knowing where and how to direct it is just as vital, Gallagher said. She intends to put that experience to use in guiding all the would-be Calistogas in NEA's current and prospective portfolio.

And now's a good time to be making bets in biotech. The protracted boom in IPOs has made for a string of lucrative exits for VCs like NEA, and a healthy M&A market has limited partners excited to keep staking new startups. But while Gallagher is optimistic that the climate will ride out into 2015, a quarter-century enduring biotech markets bullish and otherwise has taught her that you don't need Wall Street's support to innovate.

"If you build value, they will come, and that's going to continue to be the nature of our business," Gallagher said. "We continue to have many clear unmet medical needs and opportunities, and I don't see that going away any time soon."

- read the announcement

Special Report: 2010 Top 10 Women in Biotech - Carol Gallagher

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