|Donna L. LaVoie|
Are there differences in managing communications and strategic communications/IR across all industries? Are the basic skills that you would apply to other industries transferable to biotechnology?
The Chief Communications Officer’s job in any industry consists of several key elements including broad communications and horizon management, message shaping and stakeholder analysis, conference planning and attendance as well as engaging with media and investors, advocacy/professional societies and more. A survey of CCOs from different sectors would demonstrate many similarities in the function. That said, however, biotech communications are an exception.
All biotech companies require substantial capital to fund product development and are subject to Food and Drug Administration regulation. Obviously, companies in all industries need access to capital, but biotechs generally burn millions of dollars in research and development of a product over a five-to-ten-year timeframe, often without a successful product in the end. Capital is one of the key components to their success. Luckily, 2020 is a record peak year for initial public offerings with listings the highest in a ten-year span, other than 2015.
|This article is featured in O'Dwyer's Oct. '20 Healthcare & Medical PR Magazine (view PDF version)|
In biotech, general company positioning and branding are very important along with financial messaging for commercial companies that have FDA approved products on the market. For the majority that don’t, the emphasis is many times on cash position, level of R&D spending and pipeline progress. The financial metrics are often secondary to the inherent strengths of the company’s future product pipeline and the markets it will serve. So, the CCO’s expertise focuses on articulation of the company’s technology, people, problem and solution to the problem laddering up to the business model of the company and its clinical, regulatory and commercialization strategy.
For emerging companies—which many biotechs are—the CFO may handle communications, because much of the task relates to a company’s communications with the financial community. This evolves over time as the company moves into later stages of clinical development toward commercialization.
Often, the CEO or a top scientist may also be available for day-to-day communications about scientific, clinical or medical content. In effect, any of these individuals serve as the company’s chief spokesperson.
This isn’t typical of companies that have products on the market and in-house marketing functions. The job requires an integration of experience in investor relations, public relations, corporate communications and an understanding of the regulatory process with good relationships with media, investors and more. The role can also include interactions with other communications, marketing, and IR officers at pharmaceutical companies with which the company has partnerships. This can be tricky and often requires involvement of legal counsel and executive management.
When a biotech company matures and becomes an operating company, the communications functions usually split. At that point, the skills required are more traditional ones of most product companies with broader needs.
Many think that if communications officers possess the required marketing and financial skills, they can perform the function in any industry. However, the nuances of the complex communications strategies, messaging and tactics are different in biotech. This is because a biotech company’s story is event-driven, based on things such as a partnership with a pharmaceutical company, new platform technologies or the release of complex clinical data.
Almost everything is material to these companies, and the release of scientific and clinical information is tricky. It’s especially challenging in a Reg FD environment. When you don’t have earnings, there are many gray areas where the regulations aren’t specific. Many companies file 8Ks with the SEC whenever developments arise, even attaching copies of scientific or clinical presentations.
As with most companies these days, biotech’s webcast almost any group meeting that includes members of the financial community. This is sometimes viewed unfavorably by large pharmaceutical partners, whose primary interests are often focused on the release of data at a major medical meeting.
In the past, I’ve found our agency in the middle of this delicate balancing act. The pharmaceutical company is considering how the medical community will perceive the data and the biotech company, while having interests in medical peer review, wants to get the message out to the financial community to support the stock or to simply comply with Reg FD disclosure.
Companies also need to balance the need to communicate with the constraints of FDA oversight. Thus, an understanding of life sciences and biotech in addition to an understanding of the regulatory process are needed if you’re going to communicate successfully to the Street and keep your company out of trouble with the FDA and the SEC. Indeed, there’s a select group of institutional investors with MDs and PhDs on staff to sift through a company’s product pipeline, technology platform and clinical data. The COO must speak their language.
What’s clear is that biotech communications require unique attributes like an understanding of the regulatory process and an ability to articulate a scientific and clinical/commercial story. As biotechs continue to mature into development-stage companies with products entering the market, financial skills and/or broader strategic communications skills become more important. At this point, there are lessons to be learned from the larger biotech and pharmaceutical companies.
Donna L. LaVoie is President and CEO of LaVoieHealthScience.