M&A Is Dominating Investor Attention. Here's What Public Biotechs Should Do.
With acquisitions at a five-year high and the IPO calendar quieter than expected, this is a critical moment for public biotech companies to sharpen their investor relations strategy.
For public biotech companies looking to add new shareholders and boost their stock price, the current environment is as favorable as it has been in at least five years. The industry’s overall financial health is strong, and the conversation has moved on from companies having negative enterprise values, running out of cash or both. Investors are now focused on finding the next company to join the 22 public companies that have been acquired for more than $1 billion in the past year.
Currently public biotech companies are also likely to remain in greater demand because, despite the improving back drop, the IPO calendar has remained unexpectedly subdued. Now is the time for public biotech companies to aggressively court new shareholders with a refreshed story built it around a fundamental value proposition to patients, upcoming catalysts and a longer term strategic fit with potential buyers.
Below are some tips for striking while the iron is hot.
Leverage your resources to find potential buyers
Existing shareholders, sell side analysts , bankers and your own Board of Directors are all good potential sources for leads to investors who are looking for new ideas and may be interested in hearing your story
Focus on the strategic elements of your story
The current pacing of M&A is unprecedented and unlikely to meaningfully slow anytime soon given the breadth of Pharma’s need. Not surprisingly, investors are particularly interested in finding companies that play into this theme
Proactively engage
Don’t just wait to see who appears on your next conference of NDR schedule. Find them first and tell them a compelling story
Be accessible
Make good use of conferences and NDRs, they are more valuable than they’ve been in a long time.
Avoid unforced errors
Investors still have a lot of choices and will be assessing management teams as much as science. Nothing will take a company off an investors radar faster than poor execution. Be doubly sure that all controllable variables are locked down.
Public biotech companies currently have the stage, and the audience is as receptive as its been in a long time. The winners will be those that most aggressively seize this moment to tell the strategic story the market wants to see.