The Generalists Are Back
Generalist investors are re-engaging with biotech as the market strengthens. Here's how to stand out to these important investors
With the biotech markets finally breaking out of their post covid trading range and poised for one of the best years of the past decade, generalist investor interest has been rekindled. In our experience, meaningful participation from this cohort, who collectively control substantially larger amounts of capital than the biotech specialists, has been a signal of sustained strong performance in the sector. Given both their importance to the sector and how long it’s been since they last viewed biotech as a space where they could generate positive returns, thinking about how to engage with generalists should be a top investor relations priority for 2026.
How Do Generalists Think About Biotech?
Not trying to validate early data - Generalists typically own a handful of biotech stocks within a much broader portfolio and therefore do not have the same bandwidth to master the nuanced details. What they need is a brief explanation of why human proof of concept has been established.
Looking for proven science on the cusp of opening big markets - For their biotech portfolios what a generalist likes to see proven science with a strong rationale for why it will meaningfully improve patients’ treatment options.
Longer term scalability preferred - To sustain strong returns for the longer holding periods they prefer, generalists will always prioritize therapies that can access additional patient population over time with the same mechanism.
Low tolerance for unforced errors - Taking a major loss in biotech is a constant fear for generalists. Accepting some degree of scientific risk is inevitable, however, investing with proven management teams utilizing understood mechanisms via validated regulatory pathways is often a desired source of risk mitigation.
How to Make Your Pitch More Generalist Friendly
Given their more limited time to dedicate to the sector, generalists will use parameters such as these as a checklist to quickly assess which companies have the highest likelihood of meeting their required investment criterion. The key messaging considerations for receiving a positive response from this initial screen is to first engage by establishing core strategic themes of therapeutic innovation and breadth of applicability before walking through the scientific and clinical development details with a focus on their derisking elements.
By productively targeting generalists, companies can potentially reduce turnover while receiving a valuation boost from the increase scarcity value of shares. This potential stock price benefit makes understanding the generalist mindset and how to best engage with them a productive IR strategy especially during times of increased optimism.