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Aug 1, 2009 (Vol. 29, No. 14)

Perspective on PR: Building an Effective Communication Program

Down Markets Often Provide Promising Opportunities for Visibility via PR and IR

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    Tony Russo, Ph.D.

    Over my 25 years in public and investor relations, I have seen many bull and bear markets. I witnessed the great bull leading up to the crash of ’87, the recovery of ’88, the exceptionally strong biotech markets beginning in ’95, and the extreme bull market of ’99, followed by the lackluster years of the current decade.
    Through the good times as well as the bad, there has always been one dictum among companies in the biotech sector: spend money on public and investor relations when times are good and conserve cash when the times are hard.

    This strategy makes sense on a basic level. Cash-strapped biotech companies need to watch their money, and PR and IR are seen as nonessential. But what can be more fundamental to raising money than maintaining a strong profile and leadership image in a given sector? 

    As the Bill Gates quote goes, “If I had one dollar left, I’d spend it on PR.”

    The history of biotech financing has taught us that one never knows how or when there might be an opportunity to raise additional funding. Raising money whenever possible is always a wise move, even if the opportunity looks expensive at the time.

    Look at the second quarter of 2009. Who would have thought in January that the companies with a market cap below $200 million would be the strongest performing group in biotech. Visibility is one factor that impacts a company’s ability to raise capital. 

    Based on our two decades of experience, we can say that it’s not a smart move to conserve resources in the one area that can maximize a company’s value and help raise money through challenging times. Rather, setting aside resources that can be directed at greater visibility and turning up the volume for important clinical and development milestones is usually a wise move and one that can pay handsome returns.

    Two things tend to happen in challenging financial markets: companies conserve resources and the competitive landscape fades. In this environment, the news that is released receives greater attention. In bull markets, this trend is reversed.


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