Biotechs: Now is not the time to go quiet!

The current global health crisis notwithstanding, investors tend to look at small cap biotechs as largely idiosyncratic, meaning over time, your story will inform your stock price and not interest rates or macro-economic policies.

The current reality:

Investors and sell-side analysts are working from home. They remain highly active and looking for new investment opportunities. No one is traveling; conferences are all virtual and will likely remain so for the foreseeable future. News flow (aside from COVID-19 related) has been light and there is opportunity to tell your story. At some point, the investment community will find a new steady state and return to focusing on identifying individual biotech investment opportunities.

Ideas to expand your engagement:

Engage Current & Future Investors – With few exceptions, everyone is working from home.  There is a real opportunity to gain mind share. Portfolio Managers are looking for new ideas and will require updates from their internal analysts. There is a lot of pressure on mutual fund analysts to show they are able to add value to portfolios from home.

·      Reach out to your current investors. Set up conference or video calls after your quiet period.

·      Set up virtual NDRs (non-deal roadshows). Historically, brokers have set up most NDRs but with MIFID II (an updated legislative framework instituted by the European Union to regulate financial markets), they have become less helpful. Additionally, broker sales desks are arranged geographically and the obvious benefit to these virtual NDRs is there isn’t a need to stay in one geography. This is where effective Investor Relations (like Kendall IR) can add more value. Our investor contacts are across the globe so we can take advantage of time zones.

Deepen Your Sell-Side Coverage– research analysts want to stay engaged and generally feel pressure to stay visible and relevant.

·      Set up calls with your covering sell-side analysts. Even if you don’t have any “new” news, the analyst will likely welcome the opportunity to ask questions and will potentially publish a research note or keep your company top of mind when speaking to investors. They may even suggest a general call with their investors to tell your story.

·      Court new research coverage. Now is a great time to check in with analysts who cover comparable companies and may be interested in initiating coverage on your stock. 

·      Participate in a conference. Broker conferences are going virtual; however, you are still able to present, hold Q&A, and meet in 1X1s by video conference.

Last thoughts – Video and phone meetings can be awkward.  It will take a couple of tries to get into the groove on an investor/sell-side call. Practice getting the transitions right and be impactful in your message.

No one knows how long this could last. Your Board of Directors is going to want you to have a plan. Be innovative and continue to tell your story to Wall Street.

Please let me know if you need help with outreach. Sherri Spear, Kendall IR, [email protected]