In an environment full of possible acquisitions and partnership deals, biotech companies are making sure to communicate their potential value.
From rumors of pharmaceutical acquisitions to questions over cash, biotechnology companies are facing increasing pressure to communicate their economic position, as well as the depth of their drugs and therapy pipeline.
Now, say industry insiders, is the time for biotechs with late-stage therapies and acquisition, merger, or partnership potential to discuss the strength of the company story and the progress that their products are making, including the way to meet an unmet need or lower medical costs.
“I think it's better to let people know how you're dealing with challenges than to pretend that there's nothing there,” says Jeff Rona, chief business officer for GlobeImmune, a privately held biopharmaceutical company that is developing therapies to treat hepatitis C and pancreatic cancer.
“The capital sources have a lot more noise around them and they're much more focused on things other than [GlobeImmune],” he adds. “And so you need to fight through that noise.”
The Boulder, CO-based company hired Russo Partners in summer 2008 to prepare for the release of data for its targeted immunotherapies at the American Association for the Study of Liver Diseases conference last November.
The firm, in the development of the company's long-term communications strategy, also worked with the company on a messaging workshop for its executives and key speakers, and for all company announcements.
Rona says that getting stories in well-respected industry publications is one way to break through the clutter. GlobeImmune was featured in a February cover story for BioWorld about how the company has fared in the economic downturn.
“In the case of a company like GlobeImmune, it's critical for the company to clearly articulate what it has, how it works, and how it's different,” says David Schull, president of the New York-based firm. “Once you do that, you have to help these big pharmaceutical companies to see how this would fit in their pipeline. And that's the driving force of communications for GlobeImmune.”
A Shift in Messaging
While the main messages haven't changed since the market took a turn for the worse in September, there has been a slight shift in the type of story that GlobeImmune is trying to tell.
“I think what we have definitely done is focused more on how we're developing those products and how lean an organization we've run from the beginning,” Rona says. “I think the major message continues. It's more a question of letting people know how much we're achieving with how little resources because that's something that people do focus on right now.”
Rona notes that over the past two years GlobeImmune developed partnerships with the National Cancer Institute, Memorial Sloan-Kettering Cancer Center, and the University of Pennsylvania to run its clinical trials at these institutions for little cost more than “brainpower and time,” he says.
The team has woven this concept into the company's overall story, he says. That story focuses on the fact it has been fiscally careful and thoughtful in the way it has managed its business and product development.
“[PR can] help communicate the value of this technology to a prospective partner,” says Russo, adding that a company and its therapies should be positioned into “something that a pharmaceutical company would want to have in its pipeline of developing products.”
Overall, the tightened credit markets have created problems for the biotech industry, which is heavily reliant on the capital market. Taking a product to market can cost upward of $1 billion over a 10- to 12-year span, says Jeff Joseph, VP of communication for the Biotechnology Industry Organization (BIO).
“It becomes all the more important for them to be able to tell their story in this environment,” he says. “At a time when credit is tight, any way to showcase the company, showcase the research, is critical.”
Other critical aspects of a company's communications strategy might include ways to reach licensing or partnership opportunities with other biotechs or pharmaceutical companies, Joseph says. While acquisitions and mergers have been the big healthcare business stories in recent months, the concept of partnerships has steadily gathered steam.
Proteon Therapeutics, a private company developing products to treat patients with kidney and vascular diseases, announced in March that it had raised $38 million in Series B equity financing and signed an agreement with Novartis that could be worth upward of $550 million.
If Proteon's lead product, PRT-201, completes a Phase 2 clinical study successfully, Novartis will be granted an exclusive option to acquire the company.
The Waltham, MA-based company has been working with Fleishman-Hillard since 2006 and has targeted its communications efforts at potential partners and investors, which include the pharmaceutical community, says Tim Noyes, president and CEO of Proteon Therapeutics.
The agency, hired to support the company's corporate communications function, has helped with announcements like financing or clinical data milestones, says Jan Rasmussen, SVP for Fleishman.
Since September 2008, Proteon Therapeutics has announced a Food and Drug Administration (FDA) fast track designation and non-clinical results, as well as its financing and Novartis agreement.
“I think... our exposure in the investment side of the world led us to hook up with MPM [Capital], and that led us to [partner] with Novartis,” he says. “So, [communications] certainly paid off in that regard.”
While the financing and partnerships deals have secured enough cash for the company to operate through 2012, Noyes says that the company will maintain its PR effort. He adds, “We won't pull back.”
Issues facing Biotech
Big Pharma mergers and acquisitions
Pfizer announced it would acquire Wyeth for $68 billion and Roche secured its acquisition of Genentech, prompting a trend as companies look to expand their pipelines by acquiring smaller pharmaceutical or biotechnology companies
Instead of pharmas looking to acquire biotechs, many are arranging partnership deals to co-develop therapies or market already-approved therapies. Some of the larger biotechs have expanded agreements with other biotechs, like Biogen did with Dyax earlier this year
The hot topic in the biotech industry now is how the smaller companies will operate, pay employees, and continue to innovate. These are big questions in the industry because nearly half (45%) of the publicly traded companies have cash on hand for only one year
Obama's support for generic biologic drugs
As part of his recent budget proposal, President Barack Obama announced his support for a regulatory pathway for follow-on biologics to reduce healthcare costs. Approval for biosimilars could impact companies that have brand-name therapies
This story appears in print as "Getting the message out"