Biotech IR Blog by Our CEO and Founder, Laurence Watts.
December 9, 2024
Avoid Kitchen Sink Investor Announcements
I can count more times than I care to mention the number of times I have had to caution a management team not to “put it all in one release.”
In fact, a long time ago I had a client who’s CEO was convinced that the more news that was packed into a single press release, the more impactful it was (and the more he expected his stock price to go up as a result).
Recently, recounting the above story to a colleague inspired this blog. Here then are some points for avoiding kitchen sink investor announcements and maximizing the impact each piece of news receives.
Remember – yes, you can save money by only having one release, but you make it more difficult for outsiders to follow and understand your investment story (which vastly outweighs the hundreds of dollars you saved in newswire fees).
Don’t Mix Non-Executive and Executive Announcements.
While it might be tempting to announce a new CMO at the same time as a new Board Director, they are very different roles (executive versus non-executive) and both deserve their own time to shine (meaning their own release). Also, combining C-suite announcements with Board appointments makes it look like you don’t know the difference between executive and oversight functions. Avoid this mistake.
Don’t Combine Data Announcements with Quarterly Financial Results.
Sometimes clinical trial results come out around the same time you file your 10Q and issue your quarterly financial results. Regardless, you should not combine the two releases into one.
Discussing clinical data for the first time in a financial release obfuscates the fact you had a trial readout, and typically means you include less data than you would have done in a standalone release.
If you’re holding a conference call and you want to discuss both your topline data results as well as your financial and corporate update, instead issue two separate releases a few minutes apart. Combining the two will mean the data will be less discoverable for new analysts taking up coverage, or for investors who are new to your story (since they will be scouring the news release section of your website looking for a standalone release).
Don’t Combine “Real” Announcements with “Perfunctory Announcements” Like Conference Attendance.
Similarly to the rationale above, don’t hide real news by mixing it with Reg-FD releases you put out regarding scientific or investor conference attendance. (Note that the latter are really meant to protect you in the event that you inadvertently announce something important at would otherwise be a private event). By webcasting the event and announcing the webcast, you protect yourself. These kinds of announcements also signal your availability at upcoming conferences and can lead to more meeting requests.
Thus, given the regulatory and signaling nature of such perfunctory news releases, do not muddy the waters by trying to combine them with any newsworthy announcement or material update on your company – be it data, a new hire, an out-licensing, or in fact anything that you actually want eyeballs on. As a general rule of thumb, unless you are putting out a press release every week (and biotechs typically don’t produce news that often since clinical trials are typically blinded and take time to run) don’t try and skimp on cost by combining releases. It’s a false economy and it makes you look like amateurs.