JP Morgan Healthcare Conference Offers a Glimpse of What's to Come in Biotech

Daniel Banas |

It’s no secret that this year has been a rough one for the markets, but even in the most tumultuous times, one sector that always seems promising in recent years is healthcare. This is particularly true when it comes to biotech, a field that has benefited dramatically from increasingly rapid technological advancements and a growing need for medical treatments in the US.

That’s why, despite an uncharacteristic drop in the value of biotech stocks last year, investors, analysts, bankers and tech junkies alike would do well to check out one of the JP Morgan Healthcare Conference on Monday, Jan. 11 in San Francisco. With industry giants like Pfizer (PFE), Novartis (NVS) and Johnson & Johnson (JNJ) frequently in attendance, the JP Morgan Healthcare Conference is undoubtedly one of the biggest biotech events of the year. This year, the conference will be capitalizing on the momentum of a record-breaking year of deals and fomenting industry pressure throughout 2015.

“A Giant Deal-Making Party”

In the past, more than 300 companies have turned out for the conference, eager to get a sense of which companies in health and diagnostics could be primed for major breakthroughs in 2016. Taking place at the Westin St. Francis Hotel on the lip of Union Square, is the industry’s oldest and largest gathering of biotech companies and investors. This year, they will also listen closely for emerging trends in other rapidly shifting sectors such as digital health and diagnostics.

In many cases, deals are made and even finalized before the conference ends. “Deals are done in the middle of Union Square; talks get underway in the line at Starbucks (SBUX),” says Laura Vitez, a life sciences analyst for Thomson Reuters who has been a regular attendee of the conference since the 1990s. “It's just a giant deal-making party.”

A Promising, Yet Volatile Industry

Biotech IPOs have been on a bit of a tear over the past three years, with more than 167 initial public offerings - more than in the past 13 years combines. That said, it’s largely been feast or famine, with a few breakouts succeeding in a huge way...and many others left struggling for table scraps. Making matters even more challenging, in 2015, the sector seemed to hit a wall, as both the number and value of those debuts dropped - from 71 IPOs raising $5.2 billion in 2014 to 59 raising $4.9 billion in 2015.

Of course, for the biotech true believers, that’s all the more reason to check out this year’s offerings at the JP Morgan Healthcare Conference. “The IPO window has not closed, it has narrowed a bit,” says Vitez. “That could end up driving prices down for [mergers and acquisitions], which is good for pharma but bad for biotech. So you sort of kill the goose that lays the golden egg."

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
JNJ Johnson & Johnson 111.96 0.58 0.52 6,167,740
SBUX Starbucks Corporation 57.21 -1.30 -2.22 16,869,957
PFE Pfizer Inc. 31.63 0.17 0.54 19,007,839
NVS Novartis AG 68.17 0.42 0.62 2,474,290

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