With the J.P. Morgan Healthcare Conference quickly approaching (again), it is now time to start your planning for one of the most important healthcare events of the year. It is not too early to secure your meeting and sleeping space, refresh your messaging for your meetings with investors, analysts, bankers and strategists, and start the outreach to lock in your schedule with the folks you want to spend time with. As you well know, most people involved with healthcare will attend this event and being more organized than the next guy may be the reason you achieve your strategic goals for attending this important event. The J.P. Morgan event is so important, in fact, that I asked our team for their best advice in preparing for the show.
The Westwicke Blog is designed to deliver information and insights into the ever-changing world of investor relations and the capital markets, with a specific focus on the healthcare industry.
While the window for IPOs has been closed for most of this year, there have been signs of hope recently, with several transactions being priced. However, some bankers we speak to think it may not be until early 2017 that the overall market for life sciences companies really comes back.
Although disappointing for management teams that are trying to responsibly conserve their cash until better days, we think the wait could actually be a good thing for many companies. The extra time allows you to better polish your story and message, and build critical new relationships with potential investors. We think the remainder of 2016 is a pivotal time to be busily prepping ahead of a potential upturn in the market.
So you thought you were on the fast track to go public. You selected underwriters, increased investor outreach, prepared the organization, and probably attended a few conferences. But suddenly the markets turned, volatility came back, and the IPO window closed!
This is exactly the scenario that many companies have been facing this year. The NASDAQ Index is down 1.6% and the NASDAQ Biotechnology Index is down 20.8% year to date — not exactly ideal conditions to take your company public. However, sentiment has been improving recently, and the Volatility Index is at lower levels. The IPO window may indeed reopen soon, and if your goal is to go public when it does, we encourage you to use this time proactively.
Anyone who pays attention to Wall Street knows that 2016 has gotten off to a bruising start. The Dow is off nearly 7 percent since the beginning of the year, and more than 10 percent since peaking last May. The S&P 500 and NASDAQ Composite Index have seen similar declines since their peaks.
That’s a tough environment in which to go public. And, indeed, not a single company did so in January, the first month in more than four years that lacked an IPO. Right now, investors just aren’t sure how to value new offerings while the broader market continues its correction.
The 2016 J.P. Morgan Healthcare Conference has concluded, and while the market backdrop for this year’s event was noticeably less positive than it has been in recent years, the conference was nevertheless rich with important lessons. We polled our team on what struck them most about the event, and what guidance they’d offer to companies attending future conferences. We found their responses illuminating, and we think you will, too. Enjoy.
2015 was a volatile year on Wall Street, but healthcare was a source of strength and stability for investors. While most of the major indices declined, healthcare stocks returned 5.3% last year, with several sub-sectors experiencing significant outperformance (see chart below). And 78 healthcare companies went public in 2015, the most of any sector.
I recently was able to sit in on a “banker bake-off.” It was very interesting to sit on the side of the table with the management team and hear how the various banks “pitch” their strengths. It didn’t take long to identify how each bank brings something unique to the table.
One bank talked about its relationships with the buy-side accounts while another bank highlighted its research analysts’ expertise in the company’s therapeutic space, and yet a third bank spoke highly of its track record for successfully getting private companies public.
Is it time to take your company public? Many executives dream of the day when their business begins trading shares on Wall Street, but an IPO is an expensive and grueling process that necessarily distracts you from your core business. And a failed attempt at an offering can damage your credibility for many years.
That’s why it’s vital to be sure you’re ready to go public before you begin the formal process. Here are seven signs that you’re not quite there yet:
It’s hard to believe I have already been working at Westwicke Partners for 90 days. After a long career as a sell-side equity analyst, the last three months have truly given me a new perspective on how I view company management teams vs. how the Street views them.
For 25 years, I was paid to poke holes in stories — and believe me, in many cases it was easy to do and I would ask myself, Why can’t this management team just get it right? Now, looking from the inside out, I can more clearly see some of the reasons.
When shopping for a major purchase, say for a new home or car, many people wisely draft lists of must-have features and optional nice-to-have features.
Compiling a list of needs and wants is also valuable to companies searching for an investment bank, especially given how frequently they fail to evaluate a key feature: the banks’ institutional sales forces. During my 18 years on Wall Street, I can’t tell you how often I saw companies make the mistake of considering the right sales force a want-to-have feature, when they should have considered it a must-have.