Let us start by congratulating Stern IR clients, Atea Pharmaceuticals and Goldfinch Bio, who were named among Fierce Biotech’s 2020 Fierce 15, and Tmunity Therapeutics, who was named to the Endpoints 11!! And of course to Stern IR’s newest public client, C4 Therapeutics, which priced its IPO last night above the range and upsized!
IR is a Competitive Advantage – Their Words, Not Ours!
Earlier this week, IHS Markit published the results of a new survey making a point we’ve long known to be true: good investor relations can be a competitive advantage for public companies – similar to great products, talent, science or operations.
Key findings of their analysis are as follows:
- Highly effective IR maximizes valuation by supporting a premium of 15% and lowering volatility by 5%, as
measured by Beta. In contrast, ineffective IR leads to a discounted valuation of 10% or more.
- Valuation has a direct impact on a company’s access to – and cost of – capital, contributing to sustainable
business growth, particularly vs. lesser competitors.
- Taken together, these factors provide companies with a significant competitive advantage over time,
enabling them to invest in growth for the future.
Additionally, IHS Markit argues that measuring IR is critical to success. As we often say, IR is best measured by more than just the stock price or total number of meetings. IR must be accountable for managing external expectations and delivering updates with credibility and transparency; for making effective use of senior leadership’s time; and for coordinating high quality meetings with the right targets. A good reminder as we enter the fourth quarter of 2020 (how?!) and start to develop 2021 IR plans and goals in earnest.
The SPAC Boom Continues!:
As biotech IPOs continue to price at break-neck speed, so too do SPACs: in 2014, SPACs were 3% of the IPO market. N0w, according to NASDAQ’s head of capital markets, they accounted for almost 35% of new listings!
Over the last two weeks, we saw new SPACs emerge from two leading VC firms: MPM Capital announced Turmeric Acquisition, looking to raise $100M to invest in innovative companies with “new modalities” and 5AM Ventures announced 5:01 Acquisition, looking to raise $80M. And, earlier this morning, Cormorant announced plans to raise a $100M SPAC of its own, Helix Acquisition, which will focus on companies that meet five key criteria: rigorous science; already generated data for the specific candidate or platform; a clear path to more data and to regulators; a management team that can follow the path and “develop and commercialize,” and an attractive valuation.
Additionally, two familiar names launched SPACs of their own: Brett Saunders, formerly Chairman and CEO of Allergan, priced one of the largest SPACs to-date, raking in $400M for Vesper Healthcare. Vesper will look for assets in familiar Saunders territory, including: medical aesthetics, eye care, longevity and wellness. And Alex Denner – the managing partner at Sarissa Capital and architect of several successful activist attacks – filed to raise $175M for Sarissa Capital Acquisition, which will focus on healthcare and biopharma, with a particular emphasis on cell and gene therapy.
The markets remained relatively stable this week with the NASDAQ, DJI, and S&P 500 gaining 6%, 1% and 1% respectively. The VIX dropped 6% this week, sitting at 26.70 as of market close on 10/1.
Turning to biotech, the NBI, XBI and BTK all gained this week, and closed on Thursday up 5%, 4% and 4%, respectively.
Just as SPACs had a red hot week, so too did the IPO, follow-on and private markets:
- We saw three IPOs price, including Stern IR client C4 Therapeutics ($182M), Orphazyme ($84M uplisting to
NASDAQ) and Pulmonx Corporation ($190M).
- We saw three follow-ons price, including Stern IR Client LogicBio ($42M), Beam Therapeutics ($118M), and
Cardiff Oncology ($88M); and
- We saw several private deals close, including AZ Therapies ($34M, Series C), Dewpoint ($77M, Series B), Galecto
($64M, Undisclosed), Flame ($100M, Undisclosed), Invetx ($26M, Series A), Olema Oncology ($85M, Series C)
and Sonoma ($30M, Series A Extension).
- Additionally, Stern IR client Allena Pharmaceuticals announced a $25M convertible debt financing agreement