Selling the VisionEarly stage financial communications for life sciences
The situation
Crowded space
66
62
76
39
404
118
700+ companies in Canada and US
Looking at biotechs
1,400 biotechs in US 532 in Canada 1,570 in EU Growth sector in India, China and Brazil
Life sciences venture capital
31 VC firms in Canada (1:45) 85 VC firms in US (1:16) 220 VC firms in EU (1:7)
Canada - $583 million in financings ‘07 US - $10 billion in financings ‘08
Looking ahead to 2009-2010
“Dark Age Ahead for European Biotechs” “Canadian IPO Market Worst in 10 Years” “US Biotech Financing to Reach Record
Decade Low”
Expect “Darwinian change.”
- Mark Heesen, President, NVCA
Financing
Capital for the life sciences
R&D is capital-intensive Biotechs are ‘cash pigs’ Burn rate – rate of consumption of cash Time to failure = cash reserves + expected raises ÷ burn
rate
Seed capital Private equity Private equity,partnership
IPO
Discovery Pre-clinical Phase I Phase II
Applications
Private equity – seed to late stage financings Initial public offerings Follow-on/secondary financings Debt financings Mergers & acquisitions activity Government financings/grants Partnering
Communicating effectively
My ‘theoretical orientation’
This is about marketing At the end of the day it’s a sales pitch We are selling a stake in the future
financial benefit of intellectual property “Upside potential”
“Nothing happens until something gets sold.”
- Bob Metcalfe, founder, 3Com
Tools
Website Investor presentation – the ‘pitch document’ Collateral materials – the ‘leave-behind’
Goals
Hook the audience on your story
Spark a conversation Set the stage for your
investment bankers to close the deal
Principles
Know your audience Develop a compelling
story Choose the right
spokesperson Use all
available/suitable tools to tell your story
Create opportunities for your story to ‘echo’
Know your audience
You will be talking to: Investment bankers Fund managers Research analysts Financial media
In life sciences many will have PhDs in scientific or medical disciplines
Many will have had industry experience Often sit on advisory boards for portfolio companies
Tailor each presentation to suit the audience’s level of knowledge Be prepared to supplement presentation information
Build a compelling story
Start with the elevator pitch… if you are on an elevator with a potential investor how would you describe your opportunity in the time it takes the elevator to reach the ground floor?
Use broad strokes, not exhaustive detail Trim your presentation to 25 minutes or less Typical hooks
Unmet medical need – Genzyme’s portfolio Superior technology – drug-eluting stents First – Medtronic and the insulin pump ‘Cool’ factor – Hemosol’s artificial blood
Executive personality
Create the right public face Choose the right spokesperson/people Is the CEO, founder, president the right person to tell the
story? What about the Chief Scientific Officer? Remember that senior executives should be present – part of
the roadshow exercise is allowing investors to eyeball management
Invest heavily in speaker preparation – some people have natural charisma, the rest have to learn to be compelling
Think of building the ‘leader brand’ (see article on executive visibility on RosettaPR.com, ‘Perspectives’ section)
Use a variety of tools
We tend to gravitate to low tech presentations and text Consider animation and video – ‘show don’t tell’ Be creative – this is about selling! Make the presentation part of a web of story elements –
links to website, additional content etc. Help your audiences dig as deep as they want to into
your story
Make the story resonate
Create opportunities for your story to ‘echo’ Not powerful in themselves but reinforces main thrust Media coverage, interviews Investment and other conferences Website(s) Supplementary materials (e.g. white papers) Social networks
Typical presentation structure Snapshot – “ABC Company is…” Details – how it works Growth plan Market opportunity and size Financial projections Risks and uncertainties Comparables Valuation Use of proceeds Key people
Management Board of directors Advisors
Summary
Paul McIvor
416.516.7095
416.906.1276 C
179 Fern Avenue
Toronto, ON, Canada
M6R 1K2
Contact