23 February 2019 - As a biotech consultant, I’ve heard many CEO’s tell me that a “drumbeat of news” is critical to sustain investors’ interest during the never-ending fundraising process – but I’ve never been convinced how much it moves the needle.

Of course, investors care about pivotal trial results or a new approval. But many small firms (and some larger drug makers) issue press releases at the drop of a hat: “We published a preclinical paper! We’re presenting at a conference! We appointed a new advisor!” I’m not saying these news nuggets aren’t important to disclose. But from a financial standpoint, do they have any impact?

One relatively common news item is when companies announce the receipt of breakthrough therapy designation (BTD) from FDA. In terms of importance, BTD is sort of a “tweener.” It certainly increases the speed and intensity of regulatory interactions, and perhaps it improves the odds of approval (although that’s hard to demonstrate). But from an investor’s standpoint, one might imagine the impact of BTD on the fundamental financial reality of the company would be pretty negligible.

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