Session 1-A: Mastering the Biotech Funding Game: Trends and Strategies

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Moderator: Audrey E. Greenberg, CPA, MBA

Founder & CEO, AG Capital Advisors

Pre-panel Q&A

Question: In light of the current market conditions, what changes have you observed in investor preferences and risk appetites within the life sciences sector, and how can companies better position themselves to attract investment?

Answer: “In today’s cautious funding environment, investors are gravitating toward companies with validated science (i.e. Phase 2 and later), capital efficiency, and near-term milestones for both private and public companies. Early-stage ventures face more scrutiny, while crossover and public investors seek potential first or best-in-class assets with a clear path to value creation. Strong investor relations and communications are more essential in these markets. For public and later-stage private companies, this means consistent messaging, transparency, and engaging a broad base of shareholders. Private companies should establish a clear narrative early and build trusted relationships ahead of financing events. Across the board, strategic, high-touch IR helps companies stand out and attract capital amid tighter investor appetites.”— Lee M. Stern, MBA

“To say that the current market landscape for Life Sciences is challenging would be an understatement.  The Sector has underperformed broader indices YTD, Volatility is near all-time highs and the Funding environment is as difficult as it has been in years. On an increasing basis, Investors (from mutual funds on down to Sector Funds) are gravitating toward companies with more mature assets and later stage clinical programs that offer near-term milestones with the requisite capital runway to fund well through the primary readouts often being required before any serious consideration of investment.  Should the current environment continue (and at the moment, we struggle to see any tangible reason why it won’t) – companies will need to make hard decisions regarding prioritizing programs and capital expenditures while exploring non-dilutive and sometimes strategic alternatives wherever appropriate.”— Peter M. Fry

“We have seen a marked shift towards best-in-class products over technology platforms with a clear preference for clear-cut, definitive clinical data.  In part due to relative underperformance, generalist investors are largely sitting on the sidelines leaving a small group of specialist investors driving most transactions.  More than ever, investors are preferring larger well-funded companies, experienced teams with a track-record, and a clear use of proceeds to generate value-creating data. They are being disciplined and discerning, and not blindly supporting existing portfolio companies. Companies should take a hard look at their programs and decide which should be prioritized to deliver value while extending cash runway. They should be focused on building an experienced team inside and outside of the company, and setting realistic expectations and exceeding them. Companies must be perpetually looking to expand their shareholder base while at the same time be open-minded and creative, accessing capital through strategic transactions. ”— David Kellman