Singed by tech flame-out, PR firms like look of biotech

"It's a question of where the money's coming from, and following the money," said Jason Throckmorton, a co-founder and partner with LaunchSquad. "We recognize that with government expenditures increasing post Sept. 11 in the biotech arena, there will be an influx of capital."

Indeed, the first — and so far only — biotech the company worked with is Anacor Pharmaceuticals, an early-stage company developing antibiotics to counter diseases such as anthrax. It has received more money from the Department of Defense than any biotech to date. Working on a project basis, LaunchSquad successfully pitched Anacor to various business and biotech trade publications.

The firm will begin a formal marketing effort to attract new biotech clients when it inaugurates the practice in December.

Other public relations firms see similar promise.

Applied Communications, also based in San Francisco, has just scored "the industry leader in biotech in the Bay Area," as a client, said Dan Enright, vice president of marketing and business development. He would not, however, specify the company because of a non-disclosure agreement.

It's the first biotech client for Applied, but the firm plans to exploit the win to attract others.

Likewise, San Francisco-based public and investor relations firm the Blueshirt Group won medical device company Kyphon just after the company went public in May, and is now actively pitching other medical device companies. "It made sense for us to strategically diversify into health-care because it is generally counter-cyclical to technology," said Alex Wellins, a founding partner with The Blueshirt Group. To tap the new market, The Blueshirt Group first hired David Schummers, a former health-care and medical device analyst with investment firm US Bancorp Piper Jaffray. "Working with these types of companies is very different from tech," said Wellins. "There are a lot of scientists and MDs, and you really have to have someone who can talk the talk."

Even firms with existing health-care or biotech practices have been beefing them up of late. The San Francisco office of Fleishman-Hillard recently hired former USA Today science writer Doug Levy, biochemistry Ph.D. Julie Morrow and, in September, snagged former Deltagen and Genentech communications executive Paul Laland to lead the team. And they plan to add more.

"The bottom line is that the bar of competency for people in a PR agency has been raised tremendously," said Laland. "When companies decide to spend money on agencies, they're going to want to have people with true experience."

Apparently it's already paying off, however. Since Laland came on board two months ago, the team has scored at least five new clients or projects, though he wouldn't specify names due to confidentiality arrangements.

But is there risk in becoming overly reliant on health-care or biotech companies, just as many public relations firms did to their detriment during the Internet gold-rush?

"I would say there's an inherent risk to focusing solely on biotech, semiconductors or anything. That's where we've seen a lot of other firms get into trouble," said LaunchSquad's Throckmorton. "For us, we've been successful in technology, so by going to biotech we're only going to become more diverse."

James Temple covers advertising and public relations for the San Francisco Business Times.

© 2002 American City Business Journals Inc.