As the Summer draws to an end, our industry seems to be preparing for a new Spring. Many of our clients are preparing for BPE, Biotechnica and other conferences with a greater sense of optimism. We’ve also seen a significant uplift in confidence levels in the investor community and so expect to see many more companies resume their fundraising activities.

You’ll see from this newsletter that we at Northbank have continued to be busy supporting our growing client base with a range of communications solutions. What’s less obvious is the tremendous amount of ‘back room’ effort that we’ve invested in since our merger last year. We’ve completely overhauled our ‘Standard Operating Procedures’ to help us ensure that we’re delivering work of the highest quality to our customers. And we’ve produced and distributed ‘Welcome Packs’ to all our existing and new customers. These clearly set out our commitments to each client, charging structure and general terms of business to ensure transparency in the way we conduct our business on behalf of our customers. These are two of a number of initiatives that we’re working on to continually improve our customer care. If you have thoughts on how we can be even better, please share them with me.

This newsletter highlights a number of areas in which we can help science-based companies grow through better communications. If you’d like to discuss how we might help you, please feel free to call or email me. Whatever you do, I wish you every success in making the most of what looks to be a long-awaited upturn in our market.

Sue Charles, CEO

In many ways the last 12 months has shown the demarcation we have long sought in the European Life Sciences sector. There are companies that have a reasonable chance of building sustainable, successful business models and those that do not, and the differences are becoming more apparent. We believe that this demarcation will apply to both private and public companies. It is for this reason that we anticipate a somewhat turbulent time for the industry in H2/03 through H1/04 as the cash crunch continues to hit home. In the US there are now at least 10 companies that have filed for an IPO but we doubt that the European window will open in 2003.

Global markets are up, and share volumes have increased, indicating a strengthening in investor enthusiasm over the last couple of months in comparison to the past two years. The life science sector globally has benefited from an increase in confidence, driven by positive product news and a good earnings season. Reports in the financial press of increased day trading suggest that biotechnology may be benefiting from an influx of retail money. The danger is that this return of sentiment may have created a mini bubble, driving the sector up indiscriminately. We continue to believe that investors should evaluate companies by assessing

The return of positive sentiment, plus the high level of consolidation in European Life Sciences, is creating a sense of excitement within the sector. The universe of 26 stocks that we monitor have gained on average 13% in the past month and are trading at around 80% of their 52 week highs. Sentiment alone is not driving the sector, however. The drivers appear to be good reported earnings in the small group of profitable companies and the increase in M&A, both public and private. The fact that US companies are buying up European companies suggest that Europe does have interesting technology and products, but it is also a reminder that such companies often have lowly valuations compared to their US peers. At least the acquirer has the chance of investing appropriately in the key programmes and providing the correct development expertise. Often the struggling, and therefore target, companies have one or two programmes that are of interest, but these can be hidden within a “portfolio” of projects that has little chance of success overall.

The biotech industry, particularly in Europe, appears too complacent since the boom year of 2000 and we believe that significant change is required. However our prognosis is not all doom and gloom. We believe that the industry in its current form needs to undergo something of a rebirth with fewer leaner companies surviving. These companies are likely to be stronger, better financed and able to attract more capable management in order to deliver on the promise of biotechnology. Those remaining should have a reasonable chance of developing into sustainable companies.

Once again we are coming up to the ever-popular BioPartnering Europe (BPE) event in London between 12-14 October. In its eleventh year, BPE sees over 100 leading biopharmaceutical and diagnostics companies presenting in the events open-house forum, all vying to maximise the value from partnering discussions..

Northbank has attended the event for many years and helped many clients maximise their investment. This year Northbank will be working with several client companies – including Vernalis (British Biotech), Arakis, atugen, Morphochem and Ipsat, providing communication programmes that help attract as many relevant partners as possible, retaining their interest long enough to make contact and prompt follow up.

To help out participants at BPE we have produced “Northbank’s recommendations for a successful BioPartnering communication strategy”. Click here to download. If we can help you in any way please contact James Parkinson to discuss your goals and needs. We look forward to seeing you there.

Since July Northbank has... been appointed by Sigma Aldrich to provide European PR support… been hired by Inpharmatica to work on the copywriting and design of its private placement memorandum and investor presentation... been appointed by Fluent Europe to develop its new website... been hired by NuPharm Laboratories to develop its new brochure... been hired by Vision RT to provide PR support surrounding the ASTRO conference... been appointed by Finnish company Ipsat to develop its corporate and business development presentation.