Articulating the scientific value of assets: The linchpin to keeping investor cash flowing

The stakes and competition for funding and investor attention are extremely high. As the world and the industry emerges post pandemic, innovators are finding raising money to fund seminal research is growing increasingly challenging – and it’s likely to continue that way well into 2023. 

Funding nadir ahead, look out below

Fierce Biotech’s Annalee Armstrong reported in mid-2022 that venture capital (VC) biotech funding dropped 46% in the first quarter as firms began to guard against the emerging bear market and clear signs of recession on the economic horizon. Although oncology remained the leading interest area for VCs with $1.5 billion distributed over the first quarter of 2022. That, she explained, was “a far cry from the more than $4.5 billion raised during the same period a year ago.”*

One thing is being made abundantly clear as investors become increasingly cautious and careful where they place their capital funding bets. Although there is no such thing as a sure thing in pharma investment, pharma’s VC community is seeking surer things and more actionable information and the data they need to place their investments with confidence during times of economic and social uncertainty.

For today’s drug developers acquiring the financial backing necessary to reach pivotal development milestones hinges on how clearly intellectual property (IP) holders demonstrate the scientific value of their innovation and how well they articulate this story to investors. Adapting to this changing VC environment will likely continue to prompt IP owners to better direct their own capital allocations and spending towards activities that emphasize the value potential of their assets.

Moving assets forward with the strongest story

For an emerging biotech startup, it’s about focusing IR communications on why they should invest in their candidate, and how it competes with the standard of care and emerging therapeutic alternatives among other critical elements. As development continues the task becomes even more challenging to sustain investor interest and cash flow because there is a greater amount of relevant data and information that must be shared to sustain funding.

Articulating the unique advanced scientific narrative relative to IP is at the heart of creating a meaningful and lasting dialogue with investors. Imagine a company with three high-potential candidates in the pipeline. To avoid diluting the narrative and possibly appear less attractive to investment, perhaps a better IR strategy might be to focus the story around one asset, to focus investors’ attention firmly on the viability of the candidate regardless of the other two in the company’s portfolio.

It’s now more about prioritizing capital allocation, and how to leverage and articulate asset value going forward. For instance, if cash burn rates are exceeding cash flow at more than anticipated rates, it may indicate fundamental issues regarding the molecule’s commercial viability. 

Although anecdotal, many biotechs are openly discussing the pressures they face to take extraordinary measures to control spending and mitigate the impact of the pandemic on their spending and development plans. Everyone’s now acutely focused on the balance sheet and looking to understand more clearly which asset/clinical trials to prioritize and how to communicate value around them. This needs to be backed by a plan that delivers clear go/no go development decisions, a roadmap towards clear value inflection points and a communication approach that clearly conveys this. Companies that do this have the best chance of success in raising money to advance their businesses.

Focus the IR effort early to reach key opinion leaders

Focusing on communication and IR strategy early and shaping it to clearly position the value of the asset is key to obtaining steady funding and investment. Delivering this critical messaging to Key Opinion Leaders (KOLs) in the medical community joins a growing list of key stakeholders which underpins the essential IR performance needed here. At the heart of this dialogue are four things that must be communicated to KOLs and key financial stakeholders:

1.   Patient outcomes
2.   Risks and liabilities
3.   Essential data
4.   Commercial outcomes

What emerging biotech is learning is that the key to sustained timely financial support requires an IR strategy as robust as the science behind their IP. Articulating the key value proposition of a given asset properly to KOLs can also be enormously challenging, especially given the diversity and global nature of pharmaceutical reimbursement and finance.

Investor’s increasing appetite for a better vision of risk and reward

Emerging and leading biotech companies continue to feel the aftershocks of the pandemic. With vaccine development taking center stage, the investment community became somewhat divided in its priorities. But for emerging biotechs, investors’ divided attention only serves to highlight the need to communicate IP value to all stakeholders. 

Few startups are likely to come equipped with the skills or experience to support the kind of comprehensive IR and KOL engagement it needs to keep financing steady and reliable for the duration of a drug’s development journey. Knowing what should be done next is one thing but understanding the concrete steps that must be done at each pivotal point after that is an entirely different proposition. 

As an emerging biotech company, it may make good business sense to engage an external partner capable of providing the strategic expertise needed to achieve critical IR and KOL communications goals.

A clear scientific narrative can be a foundation for:

• Investor communications
• Pre-IPO readiness 
• Clinical documentation 
• External KOL engagement
• Academic publications
• Due diligence

Further, evidentiary assessment can guide evidence planning, assist in portfolio reviews, and support clinical development planning. 

Creating a scalable platform that is, from the onset, aligned with corporate and asset strategy, as well as key activities, can immediately generate value for emerging biotech. Wishing for the expertise and a clearer vision on ways to overcome your molecule-specific IR and KOL challenges? Learn more about Inizio Biotech here.

Inizio: solutions that maximize asset value at every opportunity

Inizio Biotech’s global reach and understanding mean we have experience in navigating the nuances of investor and medical community communications and the skills to help emerging biotechs with IR and commercialization strategy and planning.

We believe that every day is an opportunity to help you nurture and build toward the true value of your asset by connecting asset prioritization decisions with communications strategy in a rational and structured way. Providing best-in-class medical services and strategic IR guidance across your clinical development and commercialization journey, our biotech solutions guide, validate, and inspire the decisions that will maximize the value of your assets in the EU and US. Find out more: http://www.inizio.health/what-we-do/our-business-units/biotech/