One of the toughest jobs for a biotech company to master is achieving and managing effective communications with investors and the public. The wrong move could send stocks down for no reason at all--or artificially boost prices and damage your reputation.
Douglas MacDougall (right) is the President of MacDougall Biomedical Communications, a Massachusetts-based communications firm. He's been involved in the biotech industry for over 20 years and has provided strategic communications counsel for companies that have had to deal with every kind of crisis imaginable. MacDougall's philosophy? Good communication is the core of building and maintaining a good reputation. MacDougall says there are three types of biotechs: a) companies with great reputations that need maintaining, (b) those that need to regain lost credibility or repair a damaged reputation, and (c) new companies that need to build a credible profile with investors and the public. FierceBiotech spoke with MacDougall to identify common communication mistakes biotechs make when dealing with investors and the media, and what you can do to avoid them. Here are his thoughts:
1. Not translating the real value proposition of your science. Biotech companies are often eager to talk to investors in great detail about their novel, groundbreaking science and technology. They mistakenly use complex slide shows, investor presentations, websites and press releases without a clear explanation of the potential that has been created by their science. While investors frequently have sophisticated scientific backgrounds, it is critical to quickly and succinctly define the problem that your product or technology is solving so that they can decide whether to take the deeper dive. In order to accomplish this, companies should create presentations that clearly articulate the differentiated solutions they provide upfront and save the technical complexity for publications and follow-up meetings.
2. Putting out too many press releases. "I have to remind my clients that communications can hurt them, and more doesn't really help them," says MacDougall. For instance, he explains, never announce that your company is filing an IND or IDE. " There are too many uncontrollable events that can delay the time between filing and first patient. People also anticipate that you're going to start your trial soon after a filing, and your stock and reputation will drop if that doesn't happen." Rather, he advises that companies simply issue a release when a trial has started. By doing so, investors will appreciate that your company only makes announcements when real milestones are reached, which in turn will build your company's reputation and long-term value.
3. Over-promising and hyping in advance of a binary event. Binary events--such as predicting a partnership by the end of the year, or the filing of an IND--are things that either will or won't happen. There's no in-between with a binary event. MacDougall advises companies to carefully manage expectations around milestones that can come back and bite you if they do not pan out.
4. Not having a publication strategy for scientific data. Companies often forget to communicate their science through peer-reviewed publications and or presentations after they've received their first funding. Maintaining a flow of published scientific data is the best way to build third-party validation for the quality of your science, fill the news voids--which can be quite long--between clinical trials, and build a foundation that will attract potential partners and customers. Also, when a company eventually publicizes positive clinical data--it is helpful to have the technology explained and validated in something other than a press release.