Investor Relations and ASX Biosciences : Part of the Problem

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.

3 thoughts on “Investor Relations and ASX Biosciences : Part of the Problem

  1. Just stumbled onto your blog and dont think anyone ever said it better about BLT, the IPO and its predicament. I wondered if you had any updated thoughts on PF’s departure. What does it imply? He left because the trial results are poor? He was pushed because they are good and he went forward with an IPO?

    Like

    • I don’t really. Honestly, despite a lot of the flack I get, I am not so interested in individual people’s predicaments. Companies are supposed to be more than just an individual.

      The BLT IPO was a disaster but I don’t think Peter French is a disaster. I hope he wasn’t pushed because my perception is that he was loyal and committee to BLT, even if possibly not the right CEO for the job.

      I suspect the BLT data isn’t stellar – it seems probably that the next few months will be very interesting.

      Thanks for the kind words and for reading.

      Like

  2. Some excellent points in here, and I’m speaking as someone with experience in the industry.

    It seems most Australian biotech/medtech companies naturally go to one of the two companies you mentioned. I’ve worked with companies who have used the services of both:

    Buchan – very overpriced and don’t know how the smaller caps can justify it. Are a better outfit with more firepower than Monsoon but for the price and promises they severely underdeliver. Seems a revolving door with turnover of staff and tasks being delegated to juniors. Plenty of boobs and not enough brains to back it up.

    Monsoon – more appropriately priced but you get what you pay for, as their investor network and knowledge of who is who in the market is inredibly poor. Their roadshow targets are, for the most part, time wasters and events they organise filled with the same types or oldies with nothing better to do. They were good on media largely due to Emma Power, who I’m told has just left.

    Definitely agree it is worth looking abroad to those who specialise in this and carry more weight on Wall St

    Like

Say something useful (or at least interesting)...

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s