Editor’s note: This story has been provided with permission from Interfax China. Interfax China pharma news is located at www.interfax.cn/news/pharma.

The caliber of the management team is a key consideration when deciding which pharmaceutical company to invest in, venture capitalists said at an industry forum held in Shanghai on July 7 and July 8.

In recent years, China's pharmaceutical industry has emerged to become one of the biggest targets for both domestic and foreign venture capitalists, who are now a little more investment savvy.

"Whenever we look at a pharmaceutical company, we always pay close attention to the management team first," said Kevin Li, partner at HBM BioMed China Ltd., at the ChinaBio® Investor Forum 2008 [in Shanghai].

Kevin Xie, partner of China Renaissance, pointed out that VC companies typically assess management teams as a whole, rather than on individual characteristics, when determining their management and marketing capabilities, including whether team members act to help one another resolve issues.

On the other hand, some venture capitalists would prefer to scrutinize individual personalities and abilities in the management team. "Individual characteristics allow us to see if the team leader is able to build up the team and attract more talent," said Chika Yoshinaga, vice president of the Asia arm of Sofinnova Partners. "We also prefer those who share similar opinions with us," she said.

"Team leaders are core elements in management teams," noted Wayne Li, general project manager of Morningside Technologies. "What team leaders have accomplished in their previous careers as well as their ability to anticipate what will happen in the industry in the near future are definitely things we take into account."

According to David Xu, managing partner of Mingly China Growth Fund and Michael Xu, chief executive officer of PegBio Co. Ltd., a company’s stage of development a company will also dictate the kind of management team investors are looking for.

For pharmaceutical companies conducting early-stage drug research and development, it is important to have scientists in the management team, whereas for companies whose businesses are already on track, experienced business executives who can drive business results are desired.

In spite of China's large talent pool, investors are still finding it difficult to find managers with both technical expertise and business acumen, Huang Lu, director of Morningside Technologies said.

The potential market size of the product, a mature business model, innovative technologies and marketing strategies are other vital elements that venture capitalists look out for when they seek good investment projects, according to Xie and Li.

Disclosure: none.