"Often biotech executives struggle with how to distill their message in a digestible manner, because most of them come from scientific backgrounds and they are focused on how to make everything technically accurate versus how to storytell and make it relatable to the general public. In a post-COVID world, this will no longer work."
Given the explosion of interest in biotech from retail investors, what are the key factors for companies trying to effectively communicate with the general public?
Over the years, biotech companies were predominantly focused on delivering their message to a B2B audience. This industry started with very sophisticated investors who possess a deep understanding of the science and who really understand clinical development. Sophisticated investors and business development executives who are potentially looking to license in products have been traditionally the key audience and most companies in the sector have been laser focused on how to communicate the scientific/medical and technical part of their stories to those types of people. With the pandemic, an unprecedented number of retail accounts were opened, as people had more time to devote to investing. Furthermore, we have seen greater interest in the sector because of enthusiasm over COVID vaccine development. As a result, the character and size of the audience biotech companies communicate to has changed markedly, and it is not something companies are accustomed to. Often biotech executives struggle with how to distill their message in a digestible manner, because most of them come from scientific backgrounds and they are focused on how to make everything technically accurate versus how to storytell and make it relatable to the general public. In a post-COVID world, this will no longer work.
How do communication strategies differ depending on the stage of the company?
There are three types of companies. One category are early stage companies moving out of stealth into the capital raising of a Series A or B financing. That requires a specific type of communication tailored for early stage private investors. They are coming out of stealth and they have to understand what they should and should not reveal. In many of these cases, we see situations where intellectual property is still being considered in terms of how they ensure that they cover themselves. In those situations, companies are very secretive about indications and targets.
The second category of companies are those that are moving towards IPO. Here, they are a little further along, but they are further along because they are being pushed by the unprecedented interest from capital markets that we are seeing right now, as venture investors are pressing to get an exit. That is why we are seeing more and more of these companies moving into public markets. In this environment, pharma companies may be finding it more difficult and more expensive to in-license products. Moving towards a public footprint fundamentally changes the way a company thinks and communicates, because it is no longer a secret and you cannot hide behind undisclosed indications or targets. Moving into a public phase is not an easy transition and not every CEO frankly is cut out for it.
The third phase, where we find many of our clients in, is the later stage clinical development. Here, there are tricky, complex clinical trials and data readouts in late stage development, moving into commercialization. In those situations when the company is public, we now have many parties to communicate a message to. There are ESG requirements now to consider from a corporate reputation perspective, reporting requirements, and all of the needs around communication to multiple stakeholders around disease indications and advocacy healthcare providers, and patients are front and center.
Given the variety of areas in which biotech companies require clear communication, how does LaVoieHealthScience assist in implementing a strategy?
We look at it in a pyramid kind of approach. You cannot run your communications for investors sake only. There are many companies that still try to do that. They become public and they realize that they have obligations to their shareholders and that drives the communication. That way won’t scale long term. What you really need to do is build a foundation of key messaging and positioning aligned with key audiences. That may be pharmaceutical partners, government authorities, including the FDA, advocacy groups if you are in rare disease patient communities, health care providers, and all of that communication and relationship building builds up to creating value for the company. If you have the KOL's saying the right things about your product and what you are doing to fill a key critical medical need, it becomes inherent that investors are going to understand that. That builds value. We refer to this as message and market shaping in anticipation of your product hitting the market.
Biotech is a highly risky endeavor and often failure or ambiguous data is something companies must deal with. In your mind, what is the best way to handle these situations?
More than not, the results of clinical trials are not in your favor to be a homerun. The odds are against you. The number of times that we get the call after data readout and a client says, “It was a homerun. We hit all the endpoints p value of x, and we are off to the races,” is very rare. The reality is that most of the time clients call to say, "We did not meet the primary endpoint, but we have seen activity at this dose level in this subset of patients.” That is normally what happens and the challenge with that is from a communications and public market standpoint. Public markets respond to: Is endpoint achieved? yes or no, and what is the p value? That is how stocks trade. Therefore, even though you may have a great story about a subset of patients, it is very difficult to get that story out, especially when it is first reported. It takes the markets time to digest and understand the data and put it into perspective.