An effective communications strategy is critical for the success of an emerging biotech. A thoughtful corporate communications approach should consider multiple audiences in order to drive company awareness, facilitate employment recruitment, and successful fundraising. Within the corporate communications umbrella, companies should also create focused tactics that address the specific needs of investors.
However, a number of challenges must be overcome. Biotechs are advancing complex science that can be difficult to convey. Start-ups often have limited resources and many do not have internal communications expertise.
Emerging biotechs often turn to external consultants to provide communications support. This article discusses communications best practices, with a specific focus on the integration of investor messaging into an overall corporate communications effort.
The following best practices will help maximize communications impact:
Develop investor focused messaging as an integral part of the corporate narrative
Thoughtful, investor-focused messaging should be integrated as early as possible in the biotech’s lifecycle. Along with describing the technology, messaging should highlight a compelling value proposition, and the path to increasing value. The creation of an Investment Thesis is a helpful guide that should be integrated into the overall corporate narrative.
Forge relationships with relevant investors well ahead of fundraising needs
Early stage biotech companies should develop a thoughtful outreach plan that considers anticipated milestones, future fundraising rounds, and potential future investors. Investor relationships will take time to build and these should be initiated well ahead of a capital raise.
Execute consistent investor outreach
Effective investor outreach is hard work. Telling your story repeatedly, over time, will develop management credibility and will help highlight corporate progress to investors. A tailored outreach strategy should include multiple approaches, including investor conferences, 1X1 meetings, press releases, and scientific presentations. The COVID-19 pandemic has required modifications to outreach tactics, but the overall objectives have not changed. There is no substitute for getting out there and telling your story.
Obtain expert support for investor communications
It is important to make sure that the right team and capabilities are in place to achieve success with investor messaging and outreach. Obtaining input from an experienced IR practitioner can help ensure that messaging highlights the investment opportunity.
Developing an Overall Corporate Narrative
The development of a corporate communications strategy, as well as more specific investor relations plans, should begin by considering:
● Who are the specific target audiences?
● What are the primary business objectives?
Target audiences include prospective employees, the patient community, medical and scientific thought leaders, potential business partners, and investors. The prioritization of each group will vary depending on the priorities of the business. If a biotech is seeking a pharma partnership, reaching business partners may be particularly important. If clinical study recruitment is a priority, targeting clinical study investigators should be the immediate focus.
An emerging company should develop a compelling corporate narrative that defines the company vision. This broad narrative will form the basis for audience specific messaging. An experienced corporate communications practitioner can provide broad support during the start-up period including coordinated branding and logo design, website development and general messaging. Many communications, such as press releases, will be consumed by multiple audiences, including investors, and it is essential that the needs of the various target audiences are considered when creating external corporate communications materials.
Biotech is a capital-intensive industry and companies most often requiring multiple funding cycles. As such, investors are a high priority audience. For the newly formed company, the development of messaging that engages investors and demonstrates the value of its technology is of utmost importance. Messaging that highlights the investment opportunity should be well integrated into the corporate narrative and communications materials from the outset.
Effective messaging should also highlight the quality of the management team. There are many unknowns in biotech and investors place great importance on the credibility of management. Developing strong relationships with investors is vital, and these relationships take time to build. It is far better to begin meeting target investors early, and telling a consistent, well developed story, before additional capital is needed.
Incorporating Investor Messaging Early
When considering messaging for the biotech investment community, the particular perspectives and interests of this group must be carefully considered. Biotech investors are often scientists by training and many will want to delve deeply into the technology. However, without sufficient context, even sophisticated biotech investors aren’t likely to appreciate the value of a company’s approach. Including an experienced IR perspective when developing corporate messaging will help to ensure that the information is well positioned for investors.
Emerging biotechs need to consider when, and how, to obtain more specialized investor relations support. The typical playbook for a biotech start-up is to partner with a general healthcare communications agency, or a public relations consultant, to provide communications support for the company’s launch out of the so-called “stealth” mode and during the early growth phase of the company. During this launch period, a biotech will transition from operating discreetly, to having a public persona with an active website, a media presence, and consistent public communications.
During this start-up period, and thereafter, it is vitally important to also include messaging designed for investors. Obtaining support from an experienced IR practitioner will help ensure that messaging is compelling and that the information provided highlights the investment opportunity. An IR expert will provide guidance on the appropriate level of scientific detail to communicate, the topics likely to be of the highest interest to investors, as well as areas where there may be skepticism. Furthermore, IR counsel may provide a perspective on specific investment firms, and individual investors, for a more tailored approach.
Developing an Investment Thesis
As a component of the corporate narrative, companies should develop an “Investment Thesis” that outlines the corporate value proposition. This framework should inform all communications materials (e.g., corporate slide deck, website, press releases, etc.) so that key investor messages are prominently reflected in all company communications.
Interestingly, we have observed that developing an investment thesis often is a vehicle to catalyze management’s alignment regarding corporate priorities and strategy. The internal team deliberations related leading to the development of the final investment thesis are tremendously valuable.
Building Relationships with Investors
In addition to developing effective messaging, emerging biotechs should also develop a thoughtful approach to investor targeting and outreach. Biotechs typically require multiple rounds of fundraising before reaching the public markets. Soon after launch, companies should identify relevant prospective new investors. Selection of target investors should consider the interest of investment funds in biotechs at a similar company stage and therapeutic category. Targeting should also leverage the existing relationships of management, board members and existing investors. Once an investor target list is developed, management should then begin the hard work of developing and maintaining long term relationships with these prospective investors. The relationships will prove to be highly valuable when additional capital is required to drive further value creation and advance the pipeline.
Kendall Investor Relations, LLC has extensive experience successfully helping emerging biotechs position their technology and reach investors. Our perspective is informed by substantial industry and capital markets leadership experience that includes senior roles in corporate development, commercial operations, finance and investor relations.