There are several self-perpetuating myths and attitudes in the Biotech sector; only some are supported by our Investor Perception Survey and Interviews that were conducted across the range of the investment community.
What long-standing beliefs did the survey undermine?
- Time Horizon. There is a myth in both UK Biotech management teams and with some investors, that UK investors don’t invest in the sector or aren’t comfortable with the sector because their time horizon is too short. For example, an investment manager at an extremely long-term sector specialist investor was concerned that “investment cycles of less than five year in Europe have contributed to leakage of UK assets to the US where the investors tend to be more patient”. This belief by UK management in the Biotech sector that investors are only focused on quick returns leads to the common complaint by management in the sector that many investors don’t back their companies because of these short-term horizons. But, the survey did not support this.
- Management teams. The second fact debunked by this survey is that the investment community see relatively few Life Science management teams. In fact, 42% of those surveyed see over 50 management teams a year, around 1 a week. Even some generalist fund managers see a significant number of Biotech management teams each year.
What long-standing belief did the survey support?
- Management is key, but communication is poor. The Biotech industry needs to recognise and respond to the oft-repeated complaint that management in the UK sector is poor. While this survey does not delve into individual management case studies, it nonetheless confirms that managements’ ability to communicate to the investment community is poor.
What is meant by poor presentations? One interviewee said, for instance, that there is a “supposition that the investors are knowledgeable so management are very quick to go into deep detail with an investment case. Even with specialist investors, management don’t frame a presentation in investment ready language and structure”.
The survey leads us to the obvious and depressing conclusion: UK Biotech management teams are hindering their ability to raise funding by their lack of communication skills and ability to demonstrate effective management skills.
This should be a shot across the bows of the Biotech management community – whilst some do communicate their business and their technology well, most, according to the investment community, do not. If we are receiving this response from investors with some knowledge and expertise in the Biotech industry, the response from more generalist investors would probably be even more pronounced.
Want to learn more undermined and supported beliefs in the Biotech sector? Purchase our Investor Perception Survey and get:
The full 28 page report and analysis
The complete raw data set from the research, fully searchable and customisable for your own analysis (provided as Excel or CSV file)
A PDF synthesis and table of investor quotes and thoughts drawn from the in depth interviews and matched against key themes
Why purchase the report?
Gain access to a unique and powerful dataset of investor intelligence
See what sub-sectors and therapeutic areas are hot in the investor community
Understand where healthcare investors are allocating their resource and efforts in 2017
Learn what is truly motivating and driving healthcare investors in 2017
Understand what healthcare investors think makes a good, investable company and why
Still not convinced? Check out the report summary...