October 8, 2025

How Should Public Biotechs Respond to Retail Investor Inquiries?

One of the less appreciated services that IR agencies offer biotechs is shielding them from retail investors (a.k.a. individual or non-qualified investors). By having our name and contact details at the bottom of your news releases (as well as other public communications) direct access to you can remain more or less restricted.

Why do the management teams of public biotechs need to be protected from retail investors?

Well, at their best, retail investors are an especially inefficient use of company time.

At their worst – and usually at times when a biotech’s stock is on the ropes – retail inquiries can be downright abusive.  

It’s a jungle out there.

To add some color: over the years I’ve received death threats, been accused of fraud (in league with my clients, of course) and been called every manner of name under the sun. You would be surprised at the vitriol some retail investors unleash when they have lost a few hundred or a few thousand dollars on an ill-thought-out stock investment (and have the anonymity provided by a free Gmail account).

I say “ill-thought-out” because the average individual who cannot afford to potentially lose (or mark down a position by) a few hundred or few thousand dollars has absolutely no business investing in biotech. We are the riskiest investment within the riskiest part of the investment spectrum, with  approximately 90% of all drugs (and thus biotechs) failing.

It’s not the place to park your life savings or play with money you can’t afford to lose.

Nevertheless, a large number of retail investors do just that.

Now, if you’ve ever skimmed the message boards on StockTwits or Yahoo Finance, you’ll have seen the genesis of the problem. On these pages unfounded rumors and accusations intertwine, unmoderated, with name-calling, pump-and-dump strategies, and downright lies.

Some might call it free speech (or financial entertainment) but really it’s the same bullying and bragging you see all over the internet – with the caveat that some of that “free speech” looks uncannily like the kind of gossip and conflicted investment advice that would get registered brokers into trouble.

I mention all of this to set the scene. This is the environment that a number of retail investors get accustomed to, and as such it should come as no surprise when that lack of decorum overflows the message boards on to email and into your inbox.

Before I continue, let me be clear – not all retail investors are like those I have described. The trouble is, of course, that those are the only ones you tend to hear from. More mature and balanced retail investors likely have better things to do with their lives or had a reasonable expectation of how much risk they were taking in the first place.

What do “crazy” retail investor emails look like?

The typical retail investor email goes as follows:

• The stock is down (note: they never email when the stock is up).
• The stock being down is your fault for not putting out a press release about something/anything.
• You and the entire management team are therefore incompetent/corrupt.
• Then there is usually a demand for action (to mitigate their loss, one assumes).

The pitfalls of engaging with retail investors.

As spirited as some of these emails are, they pose a quandary for biotechs and their IR partners for the following reasons:

• First, there is seldom any way to independently verify that a retail investor is actually a shareholder (unlike institutions).
• Second, if a retail investor is seeking investment advice (which they more or less always are) they should be contacting their broker, not you.
• Third, selective disclosure is illegal – meaning you frequently can’t answer half the questions being posed if the answers aren’t already in the public domain (and if they are in the public domain, why are you even being asked?).
• Fourth, anything you say in reply by email will undoubtedly find its way on to the aforementioned message boards, including your name and email address.
• Fifth, even if requested, you cannot share your covering analysts’ research because i) it is proprietary to the bank that issued it and ii) you appropriate the investment advice in doing so.
• And sixth, there is no point identifying factual errors or inconsistencies in the retail emails/complaints you receive, because such emails are typically sent just to vent and/or scold and for this purpose, facts just get in the way.

You don’t have to engage.

How then should public biotechs deal with retail investor inquiries?

Biotechs and their IR firms would do best to remember that the minimum disclosure required by the SEC is fulfilled through a company’s regulatory filings. These filings are accessible to anyone online through EDGAR (the Electronic Data Gathering, Analysis, and Retrieval system) and are almost always linked from a company’s IR website.

As such, any additional engagement a company provides above this minimum requirement is at the company’s sole discretion (whether it be the issuing of a press release, granting a one-on-one investor meeting, webcasting a presentation at an investor conference, or holding a conference call to discuss a material business update or quarterly results).

Retail investors are an important constituency. However, unless you’re planning on your next round being crowdsourced, you won’t be able to raise capital utilizing them. This is why most biotechs choose instead to invest management’s time engaging with institutional shareholders, since they can participate in follow-on financings, and their open-market purchases can materially affect your stock price.

Policies for dealing with inbound retail inquiries.

You basically have three options:

• Respond to everyone, regardless of how disrespectful inquiries are.
• Respond to no one.
• Or respond only to reasonable and respectful requests.

Over the years, I have come to view only the last of these three as appropriate. It seems a reasonable stance – after all, you wouldn’t reward an abusive or obnoxious hedge fund with your time, would you? The same should be true for inappropriate retail inquiries.

Importantly, if you receive an abusive email from a disgruntled retail investor, don’t confirm your email by replying. Additionally, companies and IR agencies can set spam filters to block or quarantine emails from domains or accounts with poor reputations and may also scan content for offensive or inappropriate language.

Remember – no one has a right to a reply. Your SEC filings have already met your minimum standard of disclosure. Allocate your time and energy wisely.