In the last couple of weeks we have seen a couple of interesting movements between the corporate and investor relations world, a “new” arrival and an “old” departure.
Firstly, in Prima Biomed’s (ASX :PRR) most recent investment letter we quietly learned of Stuart Roberts’ departure from Prima Biomed as Head of Investor Relations, and the appointment of Trout Group to run PRR’s investor media relations. A very good firm, but probably not the ideal fit for a company of PRR’s market cap (they will mostly get juniors looking after them, with minimal Wall St clout). Still, it’s all about access to the “machine” and given that PRR basically underwhelms investors on both sides of the Pacific divide, it may turn out that hiring a heavy-hitter pays off.
I doubt it, but it’s possible. I’m sure, by the way, that even if Marc Voigt can’t make use of Stuart’s decent brain, someone else will…
Closer to home, according to her updated LinkedIn profile this weekend, Annabel Murphy has joined Benitec (ASX : BLT) as Head of Investor Relations and Corporate Communications. Whatever it is that Peter French thinks he needs to do to spice up market enthusiasm for his rather mediocre company, he obviously feels Annabel is going to accomplish it beyond the level of firepower he is getting from Buchan Communications on a corporate account basis. I like Annabel – she is smart (and very cute) but a sub-$50m market cap company doesn’t need to have an in-house head of IR/comms, any more than Prima needed to hire Stuart Roberts (who is also smart … and, er, cute too…).
However, there is some general basis for contemplation from ASX bioscience CEOs in the movement of these two individuals. A first thought is that maybe Australian IR service providers aren’t really up to snuff when it comes to biotech. I like the folks at Buchan and I am reliably informed that the folks at Monsoon Communications do an adequate job, but my personal opinion is that Australian communication firms do a great deal to propagate the unsophisticated and quasi-neophyte status with which US investors regard Australian biotech firms. So far they haven’t seemed to pick up on what is really industry best practice for communication, and while ASX continuous disclosure rules do their own little bit to make life difficult, in reality a whole lot of utter guff makes it out there – apparently with the tacit support of these firms.
The second thought is that you don’t actually need to be a NASDAQ-listed (or even a 144A/ADR) company to benefit from using a US investor relations firm. With the US still the largest global market for healthcare, it is the market in which Australian bioscience companies should want to be seen and heard – even domestic retail investors love to see coverage of their investee companies in US media. To be “seen and heard” requires media, publication and Wall Street relationships that Australian IR/PR firms just don’t have. By the way, you don’t have to go to one of the “big boys” like Trout or Stern, there are plenty of smaller highly respected boutiques in NYC and Boston that will give excellent time and attention to small-caps – like In-Site or MacDougall.
So … to this end, PRR and BLT probably both got it wrong. Although Peter picked up a great hire in Annabel, it’s pure hubris to think that for the money BLT is spending on in-house IR and communications that he is going to get something better than a high quality boutique firm on a contract basis. It was also sort of stupid for teeny/irrelevant PRR to think that a “major” is going to give them the time of day. I may be wrong, but it’s not usually the case in my experience.
But in taking a step back and looking at both of these situations, it is clear that ASX biosciences needs more than what home-grown IR/PR firms have to offer at the moment and, moreover, I think a little pressure to be a bit more sophisticated wouldn’t hurt. Frankly, for most of our ASX biosciences companies, it would be healthy for the CEO to experience the polished sneer of a US pharma IR firm the next time he or she is thinking about a press release for something irrelevant like a patent filing or a conference attendance.
Or not so polished!
Frankly, I think the average Wall St savvy firm would look at the detritus we push out on the ASX and just say fugheddaboudit…
Feature photo cred from my favourite spoof EDS commercial about cats being herded… it seemed sort of appropriate.