13th Annual Global Investment HealthCare Conference

OneMedRadio interviewed David Strupp, Managing Director of Healthcare Investment Banking at Rodman & Renshaw. Rodman & Renshaw holds its 13^th annual Global Investment Healthcare conference this September at the Waldorf=Astoria in New York. From September 11^th through September 13^th, emerging healthcare companies will be given the chance to present their services and technologies to investors.

Considered to be bankers for the growth industry, Rodman and Renshaw goes beyond the life science industries. Below Strupp discusses the company’s platform and their acquisition of Hudson Securities earlier this year.

Brett Johnson: Good day. This is Brett Johnson in New York City with OneMedRadio. Today, I’m with David Strupp who is the managing director of healthcare investment banking at Rodman and Renshaw, a New York-based investment bank with a heavy emphasis in the healthcare and biotech fields and hosting their 13^th annual healthcare conference on September 11^th to the 13^th in New York. The event has become one of the largest investment conferences in the world with over 500 companies and 4000 attendees. Thanks for joining us today, David.

David Strupp: Thank you, Brett.

BJ: So can you tell us a little bit about the conference from the healthcare perspective and how it’s evolved and what you expect to be happening here at the Waldorf?

DS: Certainly. So this is obviously a very important event for Rodman and Renshaw. We do this conference once each year at approximately this time of the year and as you said, this is our 13^th annual event. It is in fact one of the largest healthcare conferences in the United States probably after the JP Morgan conference. This year, we have over 200 healthcare companies presenting. That’s consistent with the approximate number of healthcare companies we had presenting last year despite the fact that we have compressed the conference to two days versus last year’s three-day conference. The overall number of companies is 522 and that’s down from 600 last year, but again, the number of healthcare folks is consistent.

BJ: Can you talk a little bit about the composition of the firms in terms of whether they’re biotech device firms and other firms?

DS: Sure. So, the vast majority of the presenting companies will be biotech pharmaceutical related companies. When I say vast majority, 76% of the presenting companies would fall into that bucket. Approximately 16% are medical device companies and then what I’ll call other, whether it be diagnostics or healthcare services or HCIT. But that’s the approximate makeup. And then from a size perspective, again most of the companies are $500 million and under from a market cap perspective. We have a larger component of private companies this year than we have in the past. There’s approximately 30 private companies presenting in our conference and a handful of ex-US companies as well. There’s a healthy set of Chinese pharmaceutical companies as well as Israeli life sciences companies.

BJ: Can you describe a little bit about the format and some of the programs that are going on? As I understand, there are six tracks, but then there’s also some panel discussions?

DS: That’s correct. So there’ll be numerous side-by-side presentation rooms where the companies will be given the opportunity to present in a 20, 25-minute window before we cycle on to the next company. This will be happening again simultaneously throughout the day on each of the two days of the conference. At around the lunch hour on the first day, we also have a panel discussion that is called Your Genome on an IPad: Medicine is about to Get Personal, is the formal title of the presentation. We’re very excited about it. It’s a topical area of life sciences right now. We have a number of terrific panelists. In fact, the tagline, the thousand-dollar genome is the name of a book. So the author of that book Kevin Davies is going to be on that panel. The panel itself is being led by one of our senior research analysts, Elemor Piros. And then we have numerous companies including Jay Flatley the present CEO of Illumina on the panel and a handful of others. So we’re quite excited about that.

BJ: You also have some big-name speakers I understand and some world-class entertainment. Who do you have lined up for the speaking, the keynote speeches?

DS: So we have everyone from Al Gore and a number of other politically oriented speeches during the day. We also have Mary J. Blige doing the entertainment on Monday evening at the Met, which should be a real treat.

BJ: Well you guys have been famous for your output in terms of the entertainment so hopefully that will be great again. Can you talk a little bit about Rodman and Renshaw itself and how it’s evolving as a banking organization serving emerging companies?

DS: Sure. The firm was founded over a decade ago and at its early inception, the firm was focused reasonably narrowly on the life sciences industry and on one particular product set, and that for the most part was pipes. The firm has grown substantially over that period of time in numerous regards. One, it’s no longer just life sciences. We really consider ourselves to be bankers to the growth industries. Life sciences is still a very important part of what we do as represented by the fact that almost half of the companies presenting at the conference are life sciences related companies. But we’ve branched out into a number of industry verticals beyond just healthcare to diversify our revenues and client reach.

In addition to that, we’ve also broadened our investment banking platform in numerous regards. We no longer think of ourselves as a company focused on private placements for public companies, but rather we think of ourselves as growth investment bankers that want to be able to provide investment banking services irrespective of at what point in their life cycle they are. So if you’re a private company all the way up to the ultimate sale, we want to be involved and believe that we can deliver top notch investment banking services for whatever that might be whether it’s private placement for a private company to an IPO to any flavor of public financing vehicle and MNA. So it’s now really become a diversified growth focused investment bank that has a full team of investment bankers that have the ability to deliver on that mission.

One other thing I would point out is that we’ve made a reasonably important acquisition the first part of this year. We acquired Hudson Securities that double the size of our organization with most of the new employees that we brought on board coming in, in the form of trading, sales trading and sales people to substantially expand the size of our brokerage efforts.

BJ: Can you talk a bit about Hudson Securities? How big of a firm was that, where were they located, and what was their focus?

DS: Sure. So Hudson Securities had a lot of the pieces that we at Rodman did not and conversely one area that they did not focus on was investment banking. So Hudson was almost exclusively a sales and trading organization with the vast majority of their employees focused in those efforts. Based in New Jersey, but with offices throughout the United States. We, actually are integrating that New Jersey office into our New York headquarters, but again, vastly expanding our sales and trading capabilities. So adding numerous sales traders, sales people, market traders to expand our footprint. From a revenue perspective, they were doing approximately $30 to $40 million of trading and trading related business.

BJ: How many brokers and sales people will be added to the team?

DS: In total, we brought on board almost 125 new employees, again most of which were somehow related to the brokerage operations. Obviously, you’ve got back office and compliance and other administrative functions, but the vast majority of that new set of employees that have joined our firm are in the sales and sales trading areas.

BJ: Interesting. So that will certainly give you some more horsepower in terms of being able to do more private placements as well as public offerings and everything, I assume?

DS: Absolutely. I mean we’ve added 34 sales traders and in terms of institutional salesmen, almost quadrupling the size of our institutional sales force. So we’re thrilled about it. It’s going to allow us to provide better and more after-market support to our clients. It’s going to allow us to I think be better positioned to do other pieces of — to better service our clients with products like the IPOs and fully handwritten follow-on offerings, just by virtue of an expanded sales force that has a broader reach to the institutional audience.

BJ: Great. In terms of the IPOs, have you guys been able to get any of those things done recently?

DS: It’s certainly been a challenging environment. When you say recently I think of this past summer and this past summer we’ve seen a lot of volatility in the market. That being said, the first transaction that I executed on the Rodman platform having joined the firm in June of 2010 was actually a traditional IPO for a company called Ventress, and that transaction was done actually just at the tail end of last year. But it is an important focus of our healthcare team and we continue to go out and talk to our clients about getting involved selectively in traditional IPOs. Where while I think the immediate outlook for IPOs is somewhat dim, I think taking somewhat of a longer — the IPO process can take up to six months. So while we’re seeing volatility today, I still remain optimistic that we’ll start to see IPOs once again getting back in the Q come the later part of Q3 and into the end of the year.

BJ: So in terms of the other financing strategies, what do you see happening now with regard to ways that companies can get capital?

DS: I think that one broader trend that’s taken place not necessarily, you know, in time that’s counted in weeks or months but really in years, is that there’s been an increasing focus by life sciences companies and growth companies in general on financing through the private vehicles that are available to publicly traded companies. So what started out as pipes, we’re starting to see more and more companies using other vehicles as well, register directs, what are called confidentially marketed public offerings or CMEOs.

All of these are variations on the theme, the general theme being companies using shelf registrations, pulling down off of those shelf registrations into privately marketed transaction such that they’re not at the whim of the market on any one particular day or week. You have the ability to go out in a discreet sense market your story to targeted institutional investors, try to negotiate transaction terms, and ultimately close and price the transaction before the broader markets are aware of what you’re doing. I think bringing that forward to the current day is going to become that much more important as we’re dealing with volatile markets that on any one particular day can be up or down a few percentage points. I think companies would be better served by staying somewhat in stealth mode when they’re raising capital.

BJ: Interesting. So can you tell us a little bit about your background and how you got involved at Rodman?

DS: I’ve been focused exclusively on healthcare investment banking over the past 18 years. I started out my career at larger firms. My first decade or so on Wall Street was spent at firms like UBS and what was then used to be called Smith Barney, now Citigroup before getting the entrepreneurial bug and deciding that I wanted to go off and help run and grow the healthcare effort at Think Equity Partners and I did that back in 2002. Ran that effort for five years and grew the team from pretty much nonexistent to what was a real force in the life sciences space up until the time that our team left in 2007 and went off to Canaccord Adams.

So I’ve been focused almost exclusively on life sciences, been involved in pretty much every sort of transaction you can conceive of over that stretch of time, but have a particular interest in serving small cap growth oriented life sciences companies. Along those lines, I decided to join the Rodman platform in June of 2010 because I couldn’t think of a better platform to do exactly that. It had a terrific stable of research analysts focused across the breadth of life sciences industry. We’ve only grown that effort since I’ve been on board so we now have six senior research analysts, four of which are biotechnology analysts, one of which is a specialty pharmaceutical analyst and one of which is a medical device analyst. So a strong team, it’s a team that has been working together for numerous years and a firm that has financed almost the entire life sciences industry at one point or another during their life cycle. So it’s a terrific team to join and one that I thought fit my focus particularly well.

BJ: Well it sounds very exciting and it sounds like they’re building a real force in the healthcare and life science sector at Rodman, and certainly building their investment banking in a broader range of services. Thanks so much for joining us today, David.

DS: Well, thank you for letting me tell you more about what we’re doing at Rodman and Renshaw and telling you about our upcoming conference in September 11^th to 13^th. We’re excited about it. It’s a big event for us and we think this is going to be the best event that we’ve put on to date so again, thank you for giving me the time to talk to about it.

BJ: Terrific. So that was David Strupp, Managing Director of Healthcare Investment Banking at Rodman and Renshaw, a New York-based firm with a very big emphasis in the healthcare and biotechnology field. This is Brett Johnson for OneMedRadio signing off from New York City. Have a great day.