The Situation

A company built upon a traditional pharmaceutical business model featuring a nationwide proprietary salesforce selling approved drugs in oncology and pain management had not yet turned profitable. An activist investor pushed for a return of over $500 million from product divestitures. A new CEO was hired; the company paid a special one-time cash dividend and changed to a licensing business model featuring royalties, milestone revenue and materials sales, along with early stage R&D investments.

LHA’s Solution

• Maximized disclosure in light of large pharma partners controlling the level of detail on licensed programs; product prescription data and sales forecasting supported by considerable competitive intelligence and research.
• Positioned four significant acquisitions within strategic context.
• Held five Analyst Days in New York and one in Chicago.
• Arranged conference calls and receptions at medical conferences, all utilizing key opinion leaders.
• Adopted “Fully Funded Shots on Goal” tagline with regular updates.
• Highlighted pipeline with significant detail on website including by therapeutic area, by partner and by stage of development, as well as a detailed table on royalty rates and future product launches by year.

LHA’s Results

Following the implementation of the IR program, quarterly conference call participation grew at a slow but steady pace, analyst coverage increased from zero to six, the company’s market cap increased from ~$180 million to ~$1.6 billion, and the shareholder mix migrated from arbitrage to biotech with over 200 current institutional holders.