John Woolford is a Managing Director on Westwicke's life sciences team. He has extensive experience in investor relations, as well as IPOs, capital raises, M&A, and other business development activities. He has a BS in microbiology from the University of Maryland at College Park and an MBA from the R.H. Smith School of Business.
At-the-market (ATM) offerings, a tool early-stage companies have used for years to quickly raise capital, have grown increasingly common among healthcare players, with biotech firms in particular embracing this funding method.
ATM financing provides young, publicly traded companies with a relatively agile, low-key, low-hassle, lower-cost way to sell newly issued shares to finance growth — without the need to stage a road show or even announce the sale. This works well for businesses like biotech firms that need to fund R&D and general operations before their products have received government approval for commercial sale.
Completing a successful IPO is a major milestone in the life of a company. Deciding to embark on the journey to public markets is an exciting time, but it’s essential to ensure that your company is ready. Once the process kicks off, there’s no time to go back and complete important tasks — like meeting with institutional investors and finalizing your company message — that should have been done prior to your organizational meeting. This is when you’ll discuss your offering process with management, counsel, and other advisors.
A false start can significantly damage your company’s credibility on the Street. So how do you know if your company is ready? We’ve compiled a list of six key questions to consider that will help you evaluate whether your company is ready for an IPO.
You are an executive at a development-stage life sciences company. You have just been through the intense and grueling process of completing your initial public offering. Congratulations. You must now look towards executing a strategic investor relations plan. Quickly, you are faced with a significant decision: Should our company host quarterly conference calls?
Ultimately, there are pros and cons associated with both options.
Recently, we hosted a luncheon discussion, led by the Healthcare Investment Banking group at Wells Fargo Securities, with executives from several life science companies. The primary topic was the outlook for Life Science Capital Markets in 2017. Geoffrey Goodman, Managing Director of Equity Capital Markets at Wells Fargo, and Filippo Petti, Vice President of Healthcare Investment Banking at Wells Fargo, led the discussion.
Sometimes, corporate leaders tell us that they are reluctant to meet with hedge funds. Such apprehension is fueled in many cases by concern that hedge funds may be looking into their company for the sole purpose of shorting their stock.
While we understand a preference to meet with long-only funds, we recommend that companies maintain a consistent dialogue with hedge funds.
I’ve seen pretty much everything during my career on Wall Street regarding investor relations. But there’s one thing I’ve never seen, and neither has anyone I know – a company that hasn’t run into unforeseen challenges, delays, or just bad news. Even the best-run companies have hiccups from time to time, whether it’s a missed quarter, bad clinical results, unexpected costs, or something else.
Providing investors with guidance is a key component of any IR program. It is a company’s main avenue to set expectations. Management credibility, an important factor in a company’s valuation, is significantly driven by delivering on these expectations.
When providing guidance, we recommend that you keep these important themes in mind:
Recently we assisted a client that was announcing an important corporate update (in this case clinical data) and vital context regarding future events. We decided the material was significant enough to warrant being presented in person, so that ruled out the option of just hosting a conference call.
The next decision was how to proceed. Many companies host Analyst Days, a half- or full-day presentation space in New York (typically). While Analyst Days are great, we had developed three key message points with the company, and these were crucial. Our definition of success was that these messages be clear, concise and delivered with impact. We worried that these messages might de diluted in a half day presentation.
Companies, especially those in the biotech sector, need to be strategic when preparing to target new shareholders. And biotech companies have to do a lot of targeting because developing new drugs and therapies is a long and very expensive process, necessitating frequent rounds of raising capital.
Management teams that go to potential shareholders without a strategic plan are at risk of returning with investors who aren’t an ideal fit — or with nothing at all.
Is it time to take your company public? Many executives dream of the day when their business begins trading shares on Wall Street, but an IPO is an expensive and grueling process that necessarily distracts you from your core business. And a failed attempt at an offering can damage your credibility for many years.
That’s why it’s vital to be sure you’re ready to go public before you begin the formal process. Here are seven signs that you’re not quite there yet: