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The key industry areas that will experience downstream pressures in the wake of the coronavirus pandemic.
The fallout from the unprecedented global spread of COVID-19 is only starting to be felt in the life science sector-and without a quick resolution to the crisis, headwinds into the second and third quarters of 2020, and beyond, are likely to be significant. The following are four key areas that will need thoughtful contingency planning from both an operational and communications perspective. Now is the time for companies to consider formalizing their Issues Management Team (IMT) and developing a concrete plan, addressing various levels of crisis/issues to prepare for success.
#1. Funding challenges
With the economy and markets now solidly in bear market territory, funding and liquidity is increasingly top-of-mind with both up-and-coming biotech and established players. Stock market woes are making money tight, and the traditional channels such as face-to-face conferences are grinding to a halt, with the domino effect of industry conference cancellations and postponements. At the same time, company travel restrictions and work-from-home mandates are making roadshows untenable. According to NVCA/Pitchbook, investors have raised more than $210 billion since 2016 and there is ample dry powder in the market to put to work, although there will be a focus on biotech and drug discovery deemed as “essential businesses” versus lifestyle- focused medicines. In this new landscape, companies that are able to pivot to new ways of telling their differentiated story, accepting delays caused by the pandemic, providing transparency, and using unique digital communications in the form of virtual presentations and investor outreach will come out ahead.
#2. Regulatory and commercialization delays
The health system’s overwhelming focus on addressing the coronavirus pandemic and capacity strains put on medical professionals, hospitals, and health systems could result in delays in the completion of clinical trials, not to mention recruitment. Focus on combatting the pandemic will also limit key FDA interactions for many companies and potential missed milestones could result in development timelines being pushed out. It is important to get in front of these disruptions and communicate clearly to your key stakeholder audiences and having a framework in place will jump-start your efforts. Many companies have provided updates to investors, clinical site directors, patient groups, and consumers. Those not taking the chance to reset expectations on their product plans are missing both an opportunity for a pass for a potential delay and reenforcing company reputation.
#3. Manufacturing and supply chain disruptions
A lopsided portion of active pharmaceutical ingredients (APIs) used in drug manufacturing and components in med tech products and devices are now contracted with China and other Asian countries hard-hit by the coronavirus pandemic. Manufacturing and supply chain disruptions are a very real threat to our industry and have to be addressed clearly to instill confidence. It is somewhat unclear about the direct impact of supply chain delays to the bottom line, although many commercial stage companies have reported that it won’t have a material impact on financial results. It has been reported that some companies’ China operations are slowly returning to normality and manufacturing alternatives are being sought in India and the European Union.
#4. Cancellation of medical meetings
Just as industry and investor conferences are being canceled and postponed, so are medical meetings. In the absence of these meetings, it will be incumbent upon companies to develop alternative and compelling virtual or digital means to present their data. Digitally presenting your data and summarizing your poster presentation is one creative way of addressing this and posting to your website. Company executives of all levels must now come prepared to present their data in a new online channel, with perhaps a different set of attendees than the coveted oral presentation at a major medical meeting provides. Be prepared for those presentations to be shared in social media channels. There could not be a more important time to open your digital and social channels, with clear policies in place.
Donna L. LaVoie is President and CEO of LaVoieHealthScience