Sentiments Likely To Be Overheard At #JPM16

Posted January 8th, 2016 in Uncategorized

It’s that time of the year again.  As part of the annual pilgrimage, acolytes of the healthcare investment community are about to descend upon the Union Square area of San Francisco.

As part of the ritual of the 34th Annual JP Morgan Healthcare Conference, I’m sure many of us will walk seven times counterclockwise around the St Francis, in a frenzied state looking for co-investors, pharma execs, and companies alike. To add to the experience, it looks like we’ll be doing much of it in the rain this year.

I’m sure there will be much debating about the vigor of the biopharma industry and the forecast for 2016, especially after the beating this week. But taking a longer term view than this week or this month’s stock tickers, 2016 is following on the back of five strong years in biotech (here). The NASDAQ Biotech Index is still hovering around its all time JPM high even after this week’s sell-off; last year it was 3200 during the JPM meeting. Will be interesting to see what the year brings.

In 2014 and 2015, I threw together a couple attempts at humor with “Top 10 Little White Lies” and “Things I Expect To Hear at #JPM15”, respectively.  Third time is a charm, so I’ll give it one more go here.

Here are a handful of comments capturing the sentiment I expect to overhear next week:

  • “Hey, we’re not ‘crossover’ investors… we simply invest in great companies… private or public…” Likely said by bona fide crossover investors after communicating that they won’t be adding new positions to their private biotech portfolios any time soon in 2016.
  • “I didn’t realize that you guys already filed your S-1, too…” There’s a huge IPO queue later in January (at least 30 with active public S-1s), so it will be like watching pigs move through a snake. The snake being the public investors, in this analogy only, obviously.
  • “Club IPOs with just insiders are a much better way to go…” This one is likely overheard when listening to aforementioned “crossover” investors discuss the merits of going public in this market vs when there were lots of oversubscribed offerings cutting back on allocations.
  • “Mr Skhreli, you have the right to remain silent, anything you say will likely be used against the biopharma industry…” We might not hear this per se, but hopefully he’s sidelined and quiet in 2016. Doubtful we’ll see him on the reception circuit at JPM.
  • “I just had my blood alcohol level tested via a Theranos Nanotainer tube, and it says I’m perfectly fine to invest…” Ah yes, Theranos, revolutionizing healthcare thru its blood(bath). Diagnostics is a tough enough business without this extra drama.
  • “Can you believe that gene therapy didn’t work perfectly in every single patient on the first try?” This totally changes the valuation model – from many billions down to just billions. Keep fighting the good fight, gene therapy folks. Expectations are very high, especially on the part of patients.
  • “Immuno-Oncology is so yesterday’s story. The new, new thing to invest in is called Tumor Immunology…” There’s lots of spin out there in this very hot space. Everybody has rebranded their cancer program as I/O-related. But stripping away the hype, it’s good to see T-cells and B-cells working in exciting new combinations to kill cancer.
  • “We’re sort of like Third Rock Ventures…” Overheard from VC’s trying to explain their strategy to others, reverting to analogies to convey the promise and the dream. Kudos to TRV for crushing it.
  • “I’m surprised Stan didn’t get ISIS to change their name instead.”  Indeed! Especially since Stan Crooke has probably spent far more, and fought far harder, than those crazy jihadists have on building the ISIS brand over the past two decades. (Thankfully so, as many recent RNA successes in the field benefited from it)
  • “The Street’s Adam Feuerstein… he’s got such a gentle, sensitive, velvet-glove way of writing about biotech.” Ok, we won’t hear this, definitely. But at least he’s fun to read and calls it like he sees it – makes for provocative commentary, including his bearish 2016 predictions piece
  • “We definitely would have merged with that Irish company, regardless of the tax treatment.” Lots of R&D synergies and redundancies, I’m sure. And now one company can offer Botox, Viagra, and ADHD amphetamines with a single co-pay – a real score for the #JPM16 attendee demographic.  
  • “This time is definitely different, I read it on Bruce’s blog yesterday…”  For the record, I said that it “may be.”  And, on second thought, after yesterday’s (and this whole week’s) beating in the biotech markets… well… only time will tell.

Enjoy the conference.

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