Using AI to Supercharge Biotech Investor Relations

Artificial Intelligence (AI) tools are driving substantial improvements in the productivity of investor relations (IR) efforts, especially in biotech, given our industry's complex and data-driven nature. These human-directed tools can improve productivity, streamline workloads, and enable IR teams to produce higher-quality communications and more effectively reach target stakeholders. As a result, expertise in using AI-based platforms and datasets is rapidly becoming a mandatory part of the IR skillset. Here, I'll provide an overview of how AI can help optimize communications, gather highly specific information, and effectively target prospective investors. 

It is important to note that while AI tools are powerful, the use of AI in IR is still maturing, and limitations remain. AI cannot yet develop a comprehensive strategic IR plan or draft impactful corporate messaging that fully captures a biotech's positioning and competitive advantages. Nor can AI autonomously and effectively communicate novel science or clinical data. A capable IR team must continue to guide communication strategy and execution. So, while AI provides useful tools to support IR efforts, implementation requires specialized human knowledge, creativity and judgment. Our jobs are safe for now!

Using AI to Develop Compelling Communication Materials

Generative AI tools, such as ChatGPT (Open AI), Gemini (Google), and Copilot (Microsoft), can help IR professionals develop and refine compelling investor communications materials. These tools can assist in drafting press releases, earnings call scripts, investor emails, document summaries, etc., streamlining content development, saving valuable time, and improving the clarity and quality of communications.

With thoughtful and specific prompts, AI can generate clear written language based on scientific data, clinical results, and corporate updates. For example, with a list of facts about the design or results from a clinical study, and guidance from the IR team and management, AI can create drafts that can be readily refined, saving time and often improving the quality of the final product.

One specific application is drafting management quotes for press releases. Many writers habitually use the same syntax and adjectives in their quotes, resulting in language devoid of impact. AI can help introduce fresh, more interesting prose.

AI-generated content works best when guided by highly specific AI prompts that provide clear context about the intended audience, speaker tone, desired sophistication of language, and length. Developing optimal prompts to drive generative AI requires nuance, experience, and practice. It is best practice to provide clear and specific prompts and add reference text (e.g., an example or template) to help guide the AI platform. Also, adding instructions regarding tone (e.g., "use more formal scientific language") will help optimize desired outputs. IR professionals would be well-served to explore the extensive tutorials available on the topic, including YouTube videos and OpenAI's Prompt Engineering Guide. 

A Word of Caution

Handling confidential corporate information with AI systems requires caution, and users must ensure compliance with legal and regulatory guidelines. Some IR platforms, such as Q4 and Notified, offer closed environments to support the use of AI for more secure material development. However, IR teams should proceed with care in using any platform where confidential information is shared. A deeper discussion of data security is beyond the scope of this article, and users should conduct thorough diligence on any tools under consideration and consult their legal and compliance groups.

In addition to confidentiality and legal considerations, it is essential to view AI tools as only providing support, as these tools do make mistakes and can incorporate erroneous information in generated materials. The IR team must review all outputs carefully and take ultimate responsibility for the content.

Using AI-Powered Databases to Inform and Guide Communications

Advanced AI-driven databases, such as AlphaSense, Bloomberg, and FactSet, empower IR professionals by providing rapid access to a wide range of data supporting company communications, investor targeting, and engagement. AI platforms help ensure that IR teams can most effectively use the vast quantity of available industry and competitor data, including precedent communications such as press releases, conference call transcripts, corporate presentations, and SEC documents, to develop IR materials and strategies. This information can help IR professionals and management teams understand how competitors have framed key issues, positioned their products and technologies, and communicated their financial performance and expectations. 

By leveraging a strong understanding of the biotech industry and the powerful AI tools available, we provide clients with an analysis of relevant communications and best practices. These analyses can extend across issues related to drug development, product commercialization, or corporate issues, including investor reactions to disclosures. Some recent examples using AI-powered databases include examining communications related to clinical results in a specific therapeutic area, FDA clinical holds, commercial guidance metrics, and entering a large pharma partnership.

Additionally, AI-powered databases can rapidly analyze competitor communications from peer companies by analyzing and summarizing transcripts, press releases, and investor communications. Several databases also have the capability to utilize AI algorithms to analyze sentiment in communications materials by evaluating management tone, word choice, and analyst questions. These powerful competitive intelligence capabilities can provide valuable insights into competitor communications and product positioning and help IR teams improve messaging. IR teams should also consider that investors increasingly use AI-powered summaries and sentiment analyses of corporate communications in their diligence process.

Powerful Tools to Enhance Investor Targeting

AI-powered databases can assist in investor targeting by analyzing detailed investor profiles and recent behavior and helping IR professionals identify and engage with those investors most likely to be interested in the company. These databases facilitate IR teams gathering data such as biotech assets under management, typical investment size, recent investment activity, therapeutic area focus, market cap focus, and typical investment holding periods. Databases can efficiently identify prospective investors to determine the holders of comparator biotech companies using recent 13F filing data and other disclosures (e.g., mutual fund holdings and 13G filings), providing a list of those with a demonstrated interest in biotech with a similar or perhaps more aspirational profile.

While AI-driven platforms provide new capabilities, IR teams should also continue to collect conventional, but still highly useful data on firms and individuals who have expressed interest in the company by signing up to receive company news or have listened to webcasts. Companies should also certainly carefully track management meeting requests. Some IR website hosting platforms, such as Q4 and Notified, provide other capabilities to identify prospective investors, including matching website engagement via IP address to investment firms. Other platforms, such as Nasdaq's IR Insight platform, offer investor targeting data that identifies investors who have recently met with comparable peer companies based on the analysis of information entered into their IR Insight database.

By leveraging AI-powered databases and complementary non-AI tools, IR teams can optimally identify prospective investors, understand why various firms may be viable targets, and more effectively execute their investor engagement plans.

Using AI to support investor targeting efforts is another example of how AI can streamline an IR workflow. Ultimately, however, it is the responsibility of the IR team to finalize, implement, and execute their investor engagement campaign. Further, while AI tools augment IR capabilities to identify and analyze investors, it is essential to layer on qualitative and subjective considerations such as investors’ willingness to meet, line of questions, tone, and even body language.

In summary, AI tools that are readily available today can improve productivity and enable the IR team to generate more impactful communications materials, and also more effectively reach target investors.

Potential Future Capabilities

While AI and AI-powered databases already provide tremendous utility, these technologies will continue to mature and improve. Looking ahead, AI may play a larger role in shaping overall IR strategies, including message development and execution, and may be capable of generating high-quality de novo scientific, clinical, and strategic messaging. We could also foresee AI tools becoming increasingly user-friendly and integrating more comprehensive investor targeting factors, such as management and investment firm relationships, to create an increasingly sophisticated and automated approach to identifying high-quality investor targets.

Partnering with Experts for IR Success

Leveraging AI in investor relations can be complex, especially given the nascent state and rapidly evolving nature of AI, as well as the underlying complexity of biotech communications. Working with experienced IR specialists who ensure they remain at the forefront in utilizing emerging technologies can help companies navigate this transformation and maximize AI’s benefits.

Kendall Investor Relations provides expert guidance with an exclusive focus on biotech, helping companies optimize their IR efforts through tailored communication solutions by leveraging available AI-driven tools and strategies.

We are excited to see the continued growth of AI and its application to IR. However, we will also ensure that AI operates as a tool under the control of an experienced IR practitioner. Please reach out to discuss how we can assist you.