Andersen Was Never This Rewarding
It had been a long time since Joseph F. Berardino, the Andersen Worldwide CEO who saw his accounting firm collapse amid the Enron scandal, had been a student. Yet in 2004 he often found himself huddled over biology textbooks with tutor Shelley Phelan, an associate professor of biology at his alma mater, Fairfield University in Connecticut. Phelan says Berardino, despite the occasional distraction of his teacher's infant son, was "a very quick study."
That's good, because the 56-year-old Berardino has a whole lot riding on his new gig as a science guy. In late 2005 Berardino took over as CEO of Baltimore-based Profectus BioSciences Inc., a biotech startup trying to develop a vaccine and therapies for HIV. With 11 employees, Profectus was spun off from the Institute of Human Virology and was created to commercialize its work.
The institute was founded and is run by Dr. Robert C. Gallo, a scientist renowned for his pioneering work on HIV. Gallo has weathered storms of his own, including lawsuits and government inquiries into whether he overstated his role in identifying HIV and developing a blood test for it back in the 1980s. Gallo was exonerated.
On the vaccine front, Profectus is trying to target the HIV virus as it attempts to enter a cell, at which point the virus' myriad strains must all assume a similar shape. Profectus has partnered with drugmaker Wyeth (WYE ) to do this, and studies in animals are under way. Profectus' HIV therapies would aim to cool the body's overheated immune system after it's infected with HIV.
Berardino, who was not charged with wrongdoing by the government, plays down talk of redemption. "It was a wonderful 30-year career," he says of his Andersen days. "I know this sounds trite, but my family loves me, and that's all that matters." Talk to those who know him, though, and you get the distinct sense Berardino would like to be associated with more than Andersen's implosion. Gallo says the board never thought twice about hiring Berardino: "I do believe underneath this he wants to show he's done something good for humanity."
That's certainly not what Berardino was thinking in 2003 when he met with Gallo at the request of a mutual friend. Berardino freely admits that, at the time, AIDS "wasn't high on my list of social issues." But after talking with Gallo and his colleagues, Berardino was "blown away by what they were doing and the magnitude of this problem, the way this disease is destabilizing entire countries," he says. "It was a very moving day." Berardino instantly saw how he could be of use. For starters, Profectus needed assistance on the financial side and with governance issues, two areas in which Berardino was confident he could contribute.
Berardino joined Profectus' board in 2004 and soon became its nonexecutive chair. Although still a science novice, he began thinking of moving into management. So he surveyed friends in the venture-capital and investment banking community. "I said: ‘If I came to you for money [as head of a biotech company], would you laugh out loud or would you think this is interesting?'" Berardino recalls. "They said the latter." And Berardino says he feels quite comfortable in the world of startups. "No, I don't have 85,000 people in 84 countries," he says. "But we are global, and this is a really big problem."
Berardino's role now is to bring business discipline to Profectus. Jeffrey Meshulam, its chief operating officer, says Berardino has put more formal controls in place at the company, including budgeting procedures. "He knows where every dime is," laughs Gallo. Profectus has raised a total of $5.25 million in venture capital over the last two and a half years. Berardino is spearheading an additional fund-raising round to help finance, among other things, the HIV therapy work. That could involve linkups with big pharmaceutical companies, something Berardino contends he is well suited to craft: "I am the world's expert in partnerships." No matter how hard-won that knowledge may be.
By Amy Barrett