Combatting Wall Street’s Psychology of Negativity: How Life Sciences Companies Can Portray Strength through Communications

Much like 2024, 2025 started out with a cautiously optimistic JP Morgan Healthcare Conference and the consensus that IPOs and M&As are poised to come back strong and reshape the landscape. After all, Pharma needs to replenish its drug pipelines and Private Equity is looking for exits. This was the narrative in the hallways of the St. Francis and from the numerous articles on the subject. The overall outlook remains hopeful but selective. However, markets need certainty and today, there is much uncertainty.

But while we may be in unchartered waters, there is a path to success. At a recent New England Healthcare Executive Network (NEHEN) meeting with five industry experts on “Reopening the Capital Markets: What it Means for Life Sciences IPOs and M&A,” what we heard was a realistic viewpoint that offered optimistic ground in which to plant your stake. Rebecca Stevenson, Head of Healthcare Investment Banking at HSBC, likened this uncertainty to the Market’s Psychology of Negativity that is keeping generalist investors on the sidelines – for now. Eric J. Dimise, PhD, Sector Lead of Healthcare & Life Sciences Capital Markets at NYSE, tempered this negativity by telling the audience that for the past number of new administrations, we have seen the S&P 500 close out more than one percent down each February of an inaugural year. This February was no different. In addition, we are still recovering from Covid-19 and of course, SPACs, which mitigated future growth. We continue to right-size our industry.

The battle cry for companies who either want to go public or be acquired is to prioritize a strong management team with a proven track record, demonstrate a clear pathway to commercialization and execute against milestones. Panelists also emphasized the need to tell your story and build your brand before you go into the quiet period.

Companies must recognize that communication is the foundation of Reputational Pull™ – the magnetic force that attracts investors, top-tier talent, and strategic partners. Firms that proactively craft and control their narratives will not only stand out in a crowded market but will also gain a competitive edge in an industry where trust and credibility drive long-term success.

So how does this work?

1) The Market is Watching: Investor and Shareholder Confidence is Key

Investors are more selective than ever, requiring clear, data-driven narratives that demonstrate growth potential, pipeline strength, and financial discipline. The firms that communicate these elements effectively will succeed.

2) IPO Success Hinges on More Than Science—It’s About the Story

With pre-IPO scrutiny more intense than ever, companies must ensure that their leadership teams are prepared to articulate their vision effectively. This means honing messaging across investor presentations, regulatory filings, and media interactions. The ability to simplify complex science into a digestible investment thesis can make the difference between a successful debut and a lackluster market reception.

3) M&A Activity Will Intensify—And So Will the Need for Strategic Messaging

Companies involved in M&A—whether as acquirers or targets—must control the narrative from day one. Proactive messaging around strategic rationale, integration plans, and value creation is essential for maintaining investor confidence and avoiding speculation. Silence or ambiguity can lead to reputational damage. Firms that engage stakeholders early, clearly, and consistently will have a distinct advantage in navigating the complexities of dealmaking.

4) The Media Landscape is Evolving—Companies Must Own Their Narrative

In today’s fast-paced information environment, life sciences firms need to engage with the media proactively, ensuring that journalists, analysts, and the broader public understand their business, science, and market potential. Misinformation, regulatory uncertainties, and market speculation can all impact a company’s valuation and credibility.

A strong communications plan requires thought leadership, executive visibility, and clear, jargon-free storytelling. Whether through interviews, industry conferences, or digital content, companies that shape their own narratives rather than letting the market do it for them will build stronger brand equity and investor confidence.

5) Attracting Investors, Talent, and Strategic Partners

Reputation is currency in life sciences—companies with a track record of transparent, proactive engagement are more likely to form partnerships with leading pharmaceutical firms, secure licensing agreements and capital, and attract high-caliber executives. Strategic communication fosters trust, which in turn fuels sustained growth, industry leadership, and long-term value creation.

6) Building a Communications-First Culture for Long-Term Success

The most successful life sciences companies in 2025 will be master communicators. Whether engaging investors, shareholders, the media or other stakeholders, the ability to convey a compelling and consistent message will separate market leaders from the rest. In a world where perception is as powerful as reality, strong communication is not just an advantage—it’s a necessity.

Terri Clevenger is Head of Integrated Communications at Waterhouse. To get in touch with Terri Clevenger, email tclevenger@waterhousebrands.com.