For a company to successfully create new and life-changing therapeutics for people, it must begin by establishing its own people-first and mission-driven culture. That’s the premise Bruce Cozadd set out to test when he co-founded Jazz Pharmaceuticals (NDAQ: JAZZ) in 2003.
Jazz began its life like many other biotech startups, focused on creating therapeutics for disease areas with unmet needs, such as sleep medicine. But over the past 20 years, the company’s approach evolved beyond Neuroscience to include treatment options for hematologic cancers and solid tumors. Many new pharmaceutical companies find initial success - a successful Phase 3 Clinical trial, first indication, or second indication - and quickly look for an acquirer to help them capitalize on that success. But Cozadd and Jazz have done something different, building a durable, Top 50 pharmaceutical organization, bringing over 11 therapeutics to market in the past two decades.
According to a 2023 report by Bain & Company, while 2,500 companies have reached ‘unicorn’ status, defined by a $1 billion valuation milestone given by investors, fewer than 250 have crossed $1 billion in annual revenue and only 15 have reached $1 billion annual cash flow. Jazz counts itself among the 15 or 0.7% of all unicorns along with Tesla (NDAQ: TSLA), Meta (NDAQ: META), Airbnb (NDAQ: ABNB), BioNTech (NDAQ: BNTX) to achieve this.
Bruce Cozadd, Chief Executive Office & Chairman of Jazz Pharmaceuticals
A patient-centered culture, Cozadd believes, is the key ingredient to Jazz’s success. Cozadd joined Jazz shortly following the acquisition of his previous employer, ALZA Corporation, which was acquired in 2001 for $10.5B by Johnson & Johnson (NYSE: JNJ). At ALZA, Cozadd served as the company’s EVP & COO before co-founding Jazz just two years later. When he set out to build Jazz, Cozadd knew he was going to start with culture.
“The most important professional influencer in my career was Alejandro Zaffaroni, the founder of ALZA, where I worked for 10 years. Easily 50 CEOs have come out of companies he founded and led their companies with a strong attention to culture in the way Alejandro built his own companies,” says Cozadd.
Cozadd on stage at ALZA Pharmaceuticals
The way Cozadd wanted to build Jazz was with a culture dedicated to enabling patients to understand the holistic nature of their disease. Jazz and Cozadd took a people first approach, focusing on the needs of their patients, the healthcare professionals (HCPs) who served them, and Jazz’s own workforce. For instance, Jazz’s commercial model centered on HCP education, helping providers better understand the needs of their patients. To Cozadd, a Jazz Pharmaceutical representative’s primary job is not to serve as an evangelist for Jazz’s products, but to serve as an expert educator and resource for HCPs. “If you really care about the best interest of the patient, then your goal is to ensure that they get the best information to treat their disease. This may mean they get your product; but it also may mean that they get a different course of treatment. When you think about our interaction with HCPs, it’s our goal that HCPs will make the right decisions for their patients. All of our interactions with HCPs should be with a mindset of ‘what can we do to help that HCP do their job in a better way,’” says Cozadd. And for patients, the mission is equally clear: “It’s more important we do what is right by the patient versus making sure they get our drug.”
Original photo of the early Jazz Pharmaceuticals team in 2003
A clear mission, however, is not always easy to implement in practice. Many organizations tout people-first missions and values, but can struggle to deliver on those principles. Cozadd believes that, for Jazz, the key is pairing improvisation with structure. “One of the reasons we chose Jazz as the name of the company,” Cozadd recounts, “is that I liked the idea that you can improvise on top of structure. How is it that Jazz musicians can innovate or improvise on stage with each other if they’re making it up as they go along? There is an underlying structure of music they all understand. That was a challenge decades ago when we started Jazz, and it remains a major challenge today.” “How can companies innovate - in how they support their patients, and those patients’ doctors - all while adhering to important and tested structures and guardrails for building and commercializing treatments?” Cozadd views innovation on top of structure such as regulatory frameworks as an opportunity rather than a constraint.
Successful innovation, like a strong culture, is a goal that is easy to articulate and harder to realize. Reflecting on more than three decades in industry, Cozadd’s perspective is that the most successful companies combine a healthy balance of both external and internal innovation. External licensing and moonshot M&A deals? Or a strong R&D focus to build your own robust pipeline of products? Try both, according to Cozadd. And a patient-first mindset matters here too. “Companies convinced that ‘not invented here, means not looking at’ miss the best opportunities for patients. We start with identifying the basic need of the patient and work backwards around what’s the best way to solve that problem. If it’s using a tool we have? Great. If it requires a tool that someone else has and that’s the best answer for the patient, then that’s the best approach to go after,” says Cozadd.
In addition to innovation, a resilient and agile team that takes risks and learns quickly from its failures is another vital ingredient for success. To Cozadd, it is important for employees to understand what allows for perseverance through tough times. “It has to be driven by purpose and mission. Whenever there is more uncertainty than certainty, it all comes back down to why are we all here and what are we trying to accomplish” says Cozadd. “Resilience is not just something needed in the early days but during all phases of the company journey. Stock price under $1/share, a negative regulatory decision, a negative clinical trial result, being in default on your debt, unsure whether you’re going to make payroll in months ahead are all examples of situations not just unique to Jazz,” says Cozadd. It’s also just as important to recognize when good money is being thrown after bad money. “How do we invest more of our resources behind the things that will have the greatest impact, and less of our resources to things that sounded good 2 years or 5 years ago, but in the current environment do not make as much sense?”
The trick, as Cozadd explains, is balancing optionality and certainty in a way that protects both the business and the people that it serves. “Preserving optionality has value. Smart people will also push back on me and say ‘preserving optionality also has a cost.’ You’re leaving your teams uncertain about where they’re going. Finding the right balance - when to preserve optionality and when to tell the team ‘this is the decision and we’re not going to change it on you’ - requires great judgement,” says Cozadd. Regardless of where companies strike that balance, the critical step is communicating it clearly to the team.
Cozadd has many years in front of him as a CEO and founder, but that doesn’t prevent him from musing about his legacy. “When I think about my legacy, I want Jazz Pharmaceuticals to succeed, our employees to succeed, and patients to be helped. My hope is that our employees who take on leadership positions at other organizations will take some of that Jazz culture with them and even create their own ripple effects around positively impacting the lives of patients in the best way possible,” says Cozadd.
As for advice for other biotech CEOs and would-be CEOs looking to build a Top 50 Pharma company? Unsurprisingly, for Cozadd, it all comes back to culture. “For me, the driving force for starting a company was the opportunity to build a culture from the ground up,” says Cozadd.
“The early advice I’d give to a future pharma founder is to build a culture with intentionality from the beginning. Don’t allow it to form and then only later realize that it’s not what you wanted. Now you have an existing culture that you have to change, and that’s much more difficult. Build your culture at the start. And figure out which mechanisms you’ll use to intentionally build that culture into the fabric of the company. How do you interview? What successes do you celebrate? What do you talk about at company meetings? What do you measure?” For Cozadd, identifying the right levers, and identifying them early, will ensure that they are built into the fabric of the company, paying dividends over time.
And this is guidance that Cozadd has lived. As he points out, “before I founded Jazz my alternative was taking a CEO position at an existing Biopharma company. In some cases, these companies had good pipelines, products, and financial results; but I did not find the culture that I wanted.” Rather than signing up for a multi-year cultural change experiment, Cozadd became an entrepreneur almost by default. “I did not think I would start a company, but I backed into it in order to build the culture from the start that I believed we needed to succeed.” Two decades later, it’s hard to argue with the results.
As a disclosure, I’m the Co-Founder and CEO of Ostro. Ostro works with a variety of life science manufacturers.
