Finn Partners Inc.

04/21/2025 | News release | Distributed by Public on 04/21/2025 02:38

Riding the Waves: Why SMID Healthcare Companies Must Communicate in Tumultuous Markets

News and Insights

Riding the Waves: Why SMID Healthcare Companies Must Communicate in Tumultuous Markets

April 21, 2025

Small- and mid-cap (SMID) health-sector companies often face the most intense pressure in market volatility. These are the companies pushing boundaries in science-developing first-in-class treatments, pursuing novel mechanisms, and tackling rare and underserved diseases. Their promise is real, but so are the risks-heightening the need to inform and assure investors. In uncertain markets, investor sentiment sours; these companies are often the first to feel the chill.

With the BBC Biotech Index down nearly 40% since the start of the year and some calling this downturn even worse than the 2008 financial crisis, SMID-cap healthcare companies are under significant pressure. Many are tempted to retreat-delay updates, stay silent, or ride it out. After all, no news is better than bad news, right? Wrong!

Silence Breeds Uncertainty

Without clear, consistent communication, investors speculate-and rarely in a favorable light. Questions swirl:

  • Are clinical trials off track?
  • Is the company running out of capital?
  • Did regulatory plans hit a snag?
  • Has leadership lost its confidence?

In biotech, perception becomes the investor's reality and influences valuation. When companies go dark, even temporarily, confidence erodes-and with it, investor support.

Strategic Communication Isn't Optional-It's Essential

In choppy waters, communication becomes your life raft. It's not just about staying afloat-it's about conveying stability, leadership, and progress even when the path forward is complex. C-suite leaders and IR professionals must recognize that communications is not just a tactical function; it's a strategic asset that creates street-savvy advocates.

Here's what thoughtful communication accomplishes in volatile times:

  1. Preserve Confidence.
    Transparency earns credibility. Even when news isn't perfect, updates grounded in facts and delivered confidently reassure stakeholders that leadership has its hands on the operational wheel.
  2. Control the Narrative.
    If you don't tell your story, someone else will-and likely not to your advantage. Proactive communications allow you to frame your milestones, setbacks, and progress in a way that reinforces your company's mission and value.
  3. Highlight Strength in Adversity.
    Challenges are inevitable. How you navigate them speaks volumes. Showcasing operational discipline, scientific progress, or risk management in tough times is a powerful message to investors and potential partners.
  4. Attract the Right Investors.
    Savvy, long-term investors don't flee from volatility-they seek quality, conviction, and clarity companies. Consistent communication draws them in.
  5. Reinforce Trust.
    Trust isn't built in bull markets-it's earned during downturns. Open communication, even when the message is nuanced, builds lasting credibility.
  6. Ensure Progress Isn't Lost in the Noise.
    A clinical milestone, strategic hire, or scientific publication can be a beacon in a foggy market-but only if shared.

A Call to Action for Biopharma Leaders

To the C-suite: Communications isn't an afterthought. It's a critical lever of your leadership. Your stakeholders-investors, analysts, partners, and even your employees-are looking to you for innovation, vision, resilience, and transparency.

To communications and IR teams: Now is the time to elevate your counsel and guide leadership in embracing visibility. Map out a proactive communications calendar. Engage media, analysts, and investors with clarity and consistency.

The Bottom Line

In healthcare, storms come and go. But companies that lean into communication-those that stay steady, vocal, and strategic-are the ones that emerge stronger. Silence in uncertain times doesn't protect you. It is isolating. Strategic communication, on the other hand, positions companies to weather the storm-and lead when the clouds clear.

POSTED BY: David Carey