Investor Relations plays a key role in an organization. It enables smooth communication between the firm’s management and its investors. This task is the responsibility of an investor relations manager. He or she releases information, manages crisis, provides feedback to management, and handles meetings and inquiries. Rather than focusing on the company’s customers or the public in general, these advisors of lifesci professionals take care of the firm’s financial community.
Public listed companies are required to have a dedicated department whose responsibility is to handle relations with investors. This requirement is a product of the Sarbanes-Oxley Act of 2002 on financial reporting. In this article, we will be discussing the objectives and responsibilities of an investor relations manager in biotech investor outreach.
The main objective of the investor relations department in a biotech firm is to assist its investors to make informed decisions when investing in the firm. This is done by providing current and potential investors with financial statements and up-to-date information about the operations of the company.
The documents and information provided may include qualitative information such as the business model and strategic direction of the firm, as well as quantitative financials such as quarterly and annual reports. This information is shared through events such as shareholder meetings and press releases, and also through the firm’s website. This leads to the stability of the organization’s stock process if the IR department does its job correctly. The company will also be able to attract potential investors because it portrays a positive image.
Other than sharing information with the outside world, the IR department also forwards feedback from the company’s investors to the management. This department also advises management on ways to preserve the firm’s relationship with its shareholders during times of crisis, therefore, helping in mitigating any damages to stock prices.
Typical responsibilities of an investor relations department
The main responsibilities of a biotech investor relations department include:
- Investor event preparation
- Interacting with equity research analysts
- Information collection and preparation
- Research modeling and financial model creation
- Presentation and visualization of data
- Data analysis
These duties provide the backbone and support for information needed by the staff in the department and equity analysts who interact directly with the company’s management and shareholders.
Data analysis as mentioned above is one of the duties of the IR department. It refers to the interpretation of the firm’s data that can affect investors. This data ranges from internally sourced data from the quarterly financial statement of the firm to third-party-analyst prepared industry trends. In some cases, this department carries out financial valuation and financial model creation to evaluate the firm’s stock price. By doing this, the IR department turns data into information that can be used by the management and the company’s shareholders in making decisions.
Investor relations play a pivotal role in driving a biotechnology company to success. When done correctly, it can boost current shareholders confidence in the company and attract potential ones. For this reason, biotech companies should do everything possible to develop this department.