Managing the “healthcare research” desk in this market can be tough
With the U.S. economy experiencing its biggest pullback in nearly 60 years … any notion of investing is being put to the test. Trust and confidence has been eroded for investors.
All I hear is moaning about the lack of access to the market. VC’s cry their investing model is broken, can’t raise new funds, lack exits or are breaking up. Most asset managers continue to lament the elevated metrics of risk; but, still say … I am sitting on a lot of cash just waiting … for … some sign … but when asked to define the … what or event … they say, they just don’t know!
So what is the answer, it is about – back to basics … research coverage of emerging companies’ stock is still the starting point where the “eventuality” of an investment decision begins.
CEO’s need to stop living in the past, take “personal” control of their investment research, access to differentiate from their comparables to better align with investor sentiment.
The short version includes: insight into risks to the scientific platform, transparency of clinical initiatives and benchmarks that differentiate comparables. Some funds want defined outcome scenarios and probabilities related to platforms, trials, operations and sustainability. Governance issues (how independent is the board) is a new question seeking definition. One of the biggest issues of most funds is the capitalization breakdown of the – fully diluted – share count number by specifically breaking out the “overhang” of warrants, options and preferred shares. Ranking the institutional holders is one way of “divining” the future of financing and would they step-up. The newest and “most” valuable metric is the management, director and officer holdings – a “true skin in the game” number.
