MacDougall Musings

MacDougall’s Sara Michelmore, Managing Director, Investor Relations, recently shared her insights in a contributed PRWeek article about how life science and biotech companies can best navigate a turbulent market with purpose. Read below to learn how a strategic communications refresh can help convey your company’s story effectively to the financial community and build long-term value.

Onwards and Upwards: Navigating a Turbulent Market with Purpose

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Now is the time to go on the offense and focus on how you allocate capital to build long-term value, and best communicate that to the financial community, says MacDougall’s Sara Michelmore.

Due to the intense regulations needed to adhere to Food and Drug Administration compliance, the life sciences and biotechnology industries are particularly dependent on capital while they adhere to the necessary clinical trials needed prior to commercialization.

The past year has certainly been a tumultuous one for these industries, which depend on substantial, ongoing access to capital to exist at their most innovative, and risky, stages. Public companies have undoubtedly felt the pain in the form of significantly lower valuations and an increasingly challenging capital formation environment, prompting strategic shifts and difficult operational decisions. Private companies have been buffered from the worst of the sting but have also been forced to prioritize plans and pivot away from the well-trodden capital formation path that had been successfully utilized by the industry to raise funding over the last several years.

How do you move forward in this environment? At this point in the cycle, most companies have made their defensive “survival” adjustments and extended their cash runway. Now is the time to go on the offense and focus on how you allocate capital to build long-term value, and best communicate that to the financial community.

Communicate your evolving strategy

You have likely identified investment items that will require priority capital allocation to reach the next equity value inflection points. Companies need to be very focused on communicating the timing of key clinical milestones and executing on their delivery, but it is also important to communicate to the financial community early and often regarding why you made this choice. What does the outcome of the milestone mean and how is success defined? How is this different than anything else on the market? Why is this program or product your lead? Why did you choose this over something else in your pipeline? How does this upcoming milestone de-risk your development? Will this clinical strategy provide key supporting evidence for commercial differentiation in a highly competitive field?

Providing this context enables investors to understand how you, as managers, make capital allocation decisions and provides a helpful framework from which they can evaluate your progress. Even when resources feel constrained, companies should not neglect the work of building a durable balance sheet that supports long-term enterprise value creation. This includes building asset portfolios inclusive of intellectual property, facilities and other assets.

In-person engagement is key

Sometimes it can be discouraging to meet with investors who seem disengaged or negatively impacted by the markets in which they make their living. The hard reality is that investors still need to put capital to work even in difficult markets, and it is even more critical that companies spend time with investors now, particularly if shifts in company strategy or focus have occurred. This fall has also brought back the “in person” meeting, and it is a prime opportunity to engage investors face-to-face and build deeper relationships. We strongly believe spending in person time with the financial and investing community through the end of the year should be a priority for both public and private companies.

New year, new outlook

Worried you are already behind in preparing for 2023? Don’t stress! This is an excellent time to start planning for a fresh start. Revisit your story positioning and key messages with a focus on crisp communication of key value drivers, capital allocation strategy and long-term value-creation plan. This is also an opportune time to revisit external corporate materials to reflect new messaging, ensure consistency and update the look and feel. A strategic refresh can help convey your story effectively and signal progress and momentum to the financial community.

Sara Michelmore is MD of investor relations at MacDougall, where she uses her Wall Street and consulting experience, insights and relationships to advise clients on the strategic positioning and communication of their science and technology to the investment community.