SCANNING THE HORIZON: THE BUSINESS AND REGULATORY INTELLIGENCE GATHERING SYSTEM
Business intelligence gathering and regulatory intelligence gathering differ sharply, and require distinct capabilities and
skills. Business intelligence focuses on market behavior, competitor actions, and threats such as the encroachment of offshore
companies. Its practitioners are typically industry and business generalists. Regulatory intelligence focuses on the actions
and intentions of regulators, and their likely effects on the company. Its practitioners are highly focused specialists, with
extensive experience in the regulatory arena. Despite these differences, however, the two systems should be integrated to
provide comprehensive, nuanced business, or regulatory scenarios.
Business intelligence gathering is relatively well understood and the skills and processes required to institute it are familiar.
This is, however, not the case for regulatory intelligence gathering. Knowing how to monitor and analyze US Food and Drug
Administration (FDA), European Medicines Agency Home (EMEA), Japanese Ministry of Health, Labor, and Welfare rulings, and
International Conference on Harmonisation (ICH) guidelines is a craft that requires great familiarity and strong working relationships
with the relevant regulatory bodies. Companies that lack the subtle ability to correctly interpret communications and guidance
from regulators often fall victim to hearing what they wish a regulatory agency had said rather than what the agency really
meant. Such wishful thinking and selective hearing has more than once been responsible for overly optimistic press releases
or investor guidance that was entirely unwarranted and which, in the long run, created reputation-damaging volatility in a
company's valuation. Just as much as superior business intelligence, the ability to read accurately the regulatory tealeaves
confers significant competitive advantage.
The combined business and regulatory intelligence system should include, in addition to business and industry experts, a first-rate
scientific officer and seasoned regulatory affairs professionals, who really understand where the regulatory chips are likely
to fall. The system should also include feedback mechanisms to alert leadership to competitive, scientific, medical, operational,
or regulatory problems. An integrated business and regulatory intelligence gathering system gives the company the ability
to outflank the competition, pre-empt problems, maintain an efficient and realistic commercialization plan, and absorb regulatory
information—favorable or unfavorable—and translate it into opportunities.
STAYING ALIVE: THE INVESTOR RELATIONS SYSTEM
In large, publicly traded companies, investor relations means dealing with analysts, overseeing US Securities and Exchange
Commissions (SEC) filings and annual reports, and satisfying shareholders. In start-up and emerging biotechs, however, it
means far more: securing the significant, regular infusions of funding that are the lifeblood of the company. Further, the
CEO, other top officers, and sometimes board members must be actively involved in interactions with venture capitalists (VCs),
potential alliance partners, and other investors. In a landscape where biotechs are competing for funding with many other
investment opportunities that routinely come the way of VCs, the failure to maintain a systematic, intellectually honest,
investment-savvy approach to potential investors can be disastrous.
Simply trying to dazzle investors with science and limitless market possibilities no longer suffices. The investor relations
system must be able to provide compelling answers to the questions that today's investor will ask about risk-adjusted value,
investment horizons, commercialization strategy, intellectual property, the reimbursement environment, company culture, business
and operating systems, supply strategy, and more. Not to mention the science, which is a potential minefield for biotechs
that assume potential investors won't understand the science underlying the opportunity or be able to analyze it adequately.
Being able to answer all of those questions requires not simply occasional intensive efforts devoted to developing investment
pitches, but a dedicated system that keeps the evolving investment rationale fresh. There is perhaps no better way to maintain
the marriage of business and science than to be able at every stage of the company's lifecycle to answer this question in
the most detailed way: "Why should an investor give me money now?"