A question I frequently get asked is this: As a development stage biotech, should I be engaging with a PR company or an IR company, and what is the difference?
Let’s start with the latter first. What is the difference between IR and PR?
Investor relations and public relations differ by virtue of their target audience, their purpose, and the scope of work that they cover. The reason a lot of development-stage biotechs confuse the two is that, early in the biotech business cycle, a lot of these functions appear to overlap.
Investor relations only covers a company’s communications (announcements, meetings, calls, and materials) with the investor community (VCs, crossover investors, public investors, bankers and analysts).
Public relations, on the other hand, can include the above groups of people, but is typically more broadly focused on patient groups, healthcare professionals, potential clinical trial participants, potential employees, potential partners, corporate neighbors, and the general public. It targets a wide group of people with large brush strokes (social media campaigns, regional press coverage etc.) that hope to reach some of the intended population.
Now, there is undoubtedly a time for biotechs to engage with the general public, but it is unlikely, in my personal view, to occur when a company is pre-revenue, or pre-drug approval. Sure, it’s nice to have your picture/logo in a newspaper or in a magazine, but how much is that really worth and what was the cost to obtain it? Moreover, for a company with no revenue and finite resources, is it really what you should be spending your investors’ money on?
The life of a development-stage biotech is one of almost continuous fundraising. To my mind then, active engagement with the investor community should take precedence over wider community outreach. The latter is hugely important when you have products for sale, but not when you only have cash to further your development pipeline for the next eighteen months or less. Moreover, do you really need a social media presence/campaign if all you are doing is retweeting photos of your office Christmas party or the headline of your last press release?
Now, there is value in a development stage biotech engaging with a PR company if you can identify a small, defined community that can be reached through coverage in specific publications or periodicals. The trouble as I have seen it is that the focus of PR campaigns for development stage biotechs gets lost or was never clearly defined in the first place, and money ends up being wasted.
One small defined community that development stage biotechs definitely need to engage with is the financial community, and this is covered with laser-like focus by investor relations professionals. There is no single publication that the buy-side and sell-side read, meaning no unambiguous group of journalists that can be targeted to write about you. As such, IR is about direct outreach (calls, emails, non-deal roadshows, investor conference meetings, conference presentations, conference calls, news releases, introductions, analyst and investor days) rather than a less focused approach via print or digital media.
Lastly, let me turn to the final difference I identified between IR and PR: materials. While a PR company might offer a development stage biotech services including press release writing, website development and the production of a corporate deck, their approach to all these materials tends to be, “What will get this company covered by journalists?”
By contrast, when an IR company is drafting your press releases and refining the messaging for your website and corporate deck, we are thinking, “What will get people to invest in this company?” These are two very different propositions. One, PR, is more fanciful, even academic. The other, IR, is a little colder and hard-nosed. This is important, though, because investors only write checks when investment cases are differentiated, compelling, and watertight.
Moreover, an IR company focuses on your corporate materials to make sure that the time you spend engaging the financial community (on calls, in meetings, at conferences) is not wasted, since these are the principal props you use before and in such meetings. Our aim is to make sure your value proposition as a potential investment is clearly defined, that you look and sound similar to your peer group, and that, importantly, you come across as a public-company-in-waiting, if that is the ultimate destination of your funding journey.
In summary, there are clear distinctions between IR and PR, and choosing which is right for you depends on your priorities. If you are a development stage biotech in need of initiating or improving your relations with Wall Street and its various constituents, we would love to talk to you. Contact us today.
Laurence Watts, Managing Director