2015 was a volatile year on Wall Street, but healthcare was a source of strength and stability for investors. While most of the major indices declined, healthcare stocks returned 5.3% last year, with several sub-sectors experiencing significant outperformance (see chart below). And 78 healthcare companies went public in 2015, the most of any sector.
The Westwicke Blog is designed to deliver information and insights into the ever-changing world of healthcare communications.
I recently was able to sit in on a “banker bake-off.” It was very interesting to sit on the side of the table with the management team and hear how the various banks “pitch” their strengths. It didn’t take long to identify how each bank brings something unique to the table.
One bank talked about its relationships with the buy-side accounts while another bank highlighted its research analysts’ expertise in the company’s therapeutic space, and yet a third bank spoke highly of its track record for successfully getting private companies public.
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:
It’s hard to believe I have already been working at Westwicke for 90 days. After a long career as a sell-side equity analyst, the last three months have truly given me a new perspective on how I view company management teams vs. how the Street views them.
For 25 years, I was paid to poke holes in stories — and believe me, in many cases it was easy to do and I would ask myself, Why can’t this management team just get it right? Now, looking from the inside out, I can more clearly see some of the reasons.
When shopping for a major purchase, say for a new home or car, many people wisely draft lists of must-have features and optional nice-to-have features.
Compiling a list of needs and wants is also valuable to companies searching for an investment bank, especially given how frequently they fail to evaluate a key feature: the banks’ institutional sales forces. During my 18 years on Wall Street, I can’t tell you how often I saw companies make the mistake of considering the right sales force a want-to-have feature, when they should have considered it a must-have.
Last year was a record for biotechnology IPOs, with some 82 companies raising a combined $5.5 billion. Not all IPOs are created equal, however. A good IPO is one that benefits all stakeholders and leaves the door open to future mutually beneficial collaboration.
What, then, are the secrets of successful IPOs?
Let’s start with one of the basics. The success of an IPO is judged first on whether or not participating investors make money on the transaction, and secondarily, on whether the listing company raises the funds it was seeking.
If one word alone could describe the J.P. Morgan 33rd Annual Healthcare Conference, that word, from my purview, would be productive. I met one-on-one with management teams from 44 companies, and nearly our entire team came together in San Francisco that week to take part in the conference and help clients fine-tune and deliver on their 2015 investor relations plans.
At Westwicke, we consider J.P. Morgan the “super bowl” of investor conferences. No, we don’t eat chicken wings and shout at the TV, but a lot of action happens at J.P. Morgan — this year even more than in the past. And just like in football, it pays to show up ready and prepared because, as we’ve discussed before on this blog, an elevator ride with the right person (and the right pitch) can make all the difference.
Last week, Histogenics became the 100th initial public offering (IPO) in the healthcare sector in 2014, with pharmaceutical and biotech companies leading the pack. Healthcare IPOs now account for close to 40 percent of all IPOs registered for the year, more than any other sector.
At Westwicke, the year has passed in a flash, with our investor relations, capital markets, and IPO advisory experts crossing multiple time zones regularly to meet with clients and attend conferences and road shows. We shared some of our experiences and key takeaways in our last blog post, “Lessons Learned in Healthcare IR from 2014.” Here, we’d like to reveal our most popular blog posts of the year — and share essential points that can help you plan for the year ahead.
There’s a saying in investor relations: “You date your investment bankers, but you marry your research analysts.” Essentially, this means that most sell-side analysts who cover your company will remain your partner for the long run. Investment bankers, on the other hand, work with a long list of companies and deal with jam-packed, demanding schedules. They don’t disappear after the initial public offering (IPO), but the time they can devote to your company diminishes.
The opposite happens for sell-side analysts: after the IPO, the time they spend interacting with your management team and learning about (and talking about) your company increases. Sell-side analysts are at every quarterly earnings release, at many investor conferences, and if they sponsor a non-deal road show, they should be by your side at those events, too. The most effective relationships with sell-side analysts are, in theory, like those of married couples: full of back-and-forth interaction and long-term.
In the months that follow the successful completion of an initial public offering (IPO), some companies have a hard time striking a balance between under- and over-communicating. This happens, in part, because the final week of the IPO road show is one of the most frenetic and adrenalin-pumping periods in the careers of any management team, and being back in the office after so much excitement can feel like a letdown.
To fill that void, some management teams react by getting right back out there (once the 25-day quiet period has expired) to tell their story to the same or new investors all over again. At Westwicke, we advise rethinking that strategy and taking a more balanced approach. Consider these tips and real-life scenarios from the field to help you determine the right mix.