Russo Partners recently sat with the three leaders of Oppenheimer & Co.’s healthcare investment banking team: Stuart Barich, managing director, who focuses on biotechnology and specialty pharma companies; Kee Colen, managing director, who handles medical device companies; and Josh Muntner, executive director, who also focuses on biotechnology and specialty pharma.
With decades of experience in healthcare financing, the Oppenheimer trio delivered their 2009 “down economy” advice in the form of three tips — much to the delight of our stick-with-three-message healthcare PR counselors.
1. Don’t wait until the last minute to develop and implement your financing strategy.
It is not uncommon for a company considering a future financing to wait until there is less than one year of cash before shopping around for investment banking services. It is understandable in this economic environment that a company requiring funding will wait for financing conditions to improve. However, it is a wrong-headed approach. Predicting when the market environment will turn is fraught with uncertainty. Therefore, build your banking relationships when you have more than one year of cash on hand and you are in a position of strength rather than desperation. You may have more flexibility on the terms of the deal.
2. Focus, focus, focus — Investors want to see focus as well as progress.
Platform companies, for the most part, are struggling to acquire funding today. The company focused on a lead product with a detailed plan and timeline for development is more likely to get funded. Money is scarce, at least for the time being, so investors want their investments to be directed toward a limited number of projects. Such focus limits company burn rates and prolongs the time before the company needs to dip into the financing well again.
3. Public companies should broaden their investor targets.
Historically, companies entering the public markets graduated from their venture investors who sold their shares as institutions and individual investors acquired positions through an IPO, a secondary offering or on the public markets. Today, public biotechnology companies should look back to their pre-quoted years and invite venture investors back as investors. Valuations of biotechnology and other healthcare companies are at historic lows. Valuations are attractive for VCs to build stakes in these companies. Therefore, public companies should consider VC participation in their financings.
Here’s information about the Oppenheimer trio:
Stuart Barich joined Oppenheimer in 2005 as a managing director focusing on biotechnology and specialty pharmaceuticals. He has participated in the successful completion of more than 150 transactions during his career covering a broad spectrum of equity and mergers and acquisitions. Prior to joining Oppenheimer, he spent five years at Leerink Swann, where he completed 45 transactions for life science companies. Prior to joining Leerink, he directed the healthcare banking efforts at Oscar Gruss & Son and Auerbach. Stuart began his career as a corporate finance associate with Paine Webber. He earned a B.S. in electrical engineering from the University of Rochester and an M.B.A. with honors from Columbia Business School.
Kee Colen has provided investment banking services to emerging growth and middle market companies for 20 years and has been with Oppenheimer and its predecessors since 1990. He has worked with a wide variety of healthcare and life science companies, including those in the biotechnology, specialty pharmaceutical, healthcare services and medical device sectors. Transactional experience includes over 125 closed transactions, including IPOs, follow-on public offerings, PIPEs, registered directs, private placements of equity, mezzanine and debt capital, M&A advisory services, fairness 0pinions, valuations and restructurings. Kee has a B.S. in finance from Northern Illinois University, where he graduated magna cum laude, and an M.B.A. from Indiana University.
Prior to joining Oppenheimer, Josh Muntner worked with CIBC World Markets. His recent experience includes a variety of completed transactions, including IPOs, follow-on offerings, private financings and M&A and financial advisory assignments. Before this, Josh worked in the healthcare investment banking group at Prudential Vector Healthcare in New York. Josh received a B.F.A. from Carnegie Mellon University and an M.B.A. from the Anderson School at UCLA.
