Nordic Life Science 1
Most smaller companies have websites in both Swed
ish and English, check; but unfortunately the international element often ends there, not counting attempts at partnering. Make an effort to strengthen the board of directors with at least one non-Swedish board member – it provides new and different perspectives as well as new contacts. Another important measure is to focus on attracting international investors into the company, preferably with experience from the relevant segment. With such partners of a certain owner size, the company may get a stamp of quality that can often facilitate initiation ofinternational partner business discussions, etc. Be sure to choose a financial advisor who can really help you in this respect. Given the foreseen future difficulties in obtaining financing, it is each company’s obligation to consider whether there are opportunities for industry consolidation – size is important and provides often greater business opportunities. Of course, there are often difficulties in achieving consolidation, but increased size often gives strength. Most managements and board members believe that they are doing the company and its shareholders a favor by securing a rights issue with guaranteed subscription, often up to 100%. In companies without strong owners who can issue subscription commitments, you easily end up in the situation that the guarantee consortium owns between 10–35% of the company after the rights issue – and these are short-term investors; thus a period of 64 NORDICLIFESCIENCE.ORG share price pressure is for certain. The company certainly makes sure that the company receives the funds needed, and thus protects itself from liability, but by this sort of action the company more or less “ignores” the share price development, the company’s most important currency. Such a betrayal of the shareholders could be avoided. For example, you could instead consider to do as follows; raise maybe half the capital required through a rights issue – there may be less need, if any, for a guarantee consortia. At the same time, if possible, take up a 2-5 year loan/ convertible loan from one of the players working in that market. The need for capital is thus covered, the share price is not exposed to severe selling pressure, and management and the board manage the operational and financial risks in the company. Of course, the loan increases the financial risk in a biotech normally having a negative cash flow, but it is usually manageable as opposed to a fiercely pressured share price. The latter is difficult to manage and can have implications far into the future. Importantly, over time, there is a continuous adaptation of activity and communication based on how reality develops. Such an approach to communication to the stock market provides, if handled correctly and consistently, investor dreams and confidence, higher share price (better currency), and greater opportunities to develop as a company. After the above is communicated, you can add details such as medical needs, market and pipeline and research. You have hopefully already caught the interest of investors. Most board members and managements in Swedish biotech companies have a scientific background. This is good, but few have experience in sales and marketing. As a scientist, you prefer not to say anything until you have proof. This characterizes much of PR and communication from Swedish biotech companies. As a listed company, you cannot promise future events. Nothing prevents you, however, from communicating a realistic picture of what the vision of the company will look like in a number of years if all goes well, i.e. where you want to reach in the long run. This does not refer to the often “short & dry” vision sentence that is found in the annual report, but a more concrete description and vision of where you want to reach. Naturally then communicate the strategy that the company is working with in order to reach the stated vision. Compare, for example, with the communication from companies with an Anglo-Saxon (or sometimes Danish) background. Here, representatives are not afraid to describe concretely what the company’s vision may mean a couple of years ahead under the assumption that all is going well – and it is appreciated by investors who often know about “biotech risk”. The board has hiring of the CEO as one of its three main tasks. The communication aspects appear to be underestimated. Swedish companies often appear to be terrified of painting with a big brush and conveying dreams to investors. Instead of painting a vision of where you want to go AND the strategy of getting there, many hasten over a one sentence vision statement and go straight to the pipe