Five Things to Watch for at the J.P. Morgan Healthcare Conference

January 12, 2016


San Francisco’s population is swelling, but the rising wave of people, much like the bay at high tide, will ebb.

The flow of people into the city, specifically Union Square, is an effect of the 34th Annual J.P. Morgan (JPM) Healthcare Conference (JPM is a FleishmanHillard client), happening this week in San Francisco as it does every year. If you haven’t heard of it, think of JPM as the WrestleMania of the healthcare industry. The strongest healthcare companies in the world gather in front of a hungry (sometimes friendly, sometimes not) audience – investors, entrepreneurs, non-profits and journalists – and make their case for why their business is fundamentally poised for growth.

To my knowledge, healthcare executives don’t wear championship belts and investors don’t yell their names while companies are on stage (although that could make it interesting!). The moves those execs make at the conference result not in bodily harm but stock prices skyrocketing and millions of dollars in funding for the next breakthrough medicine or diagnostic.

Each year, the stakes and expectations for JPM get higher, and this year is no exception. We’re coming off a 2015 with massive, global financial performance from the biotech and pharma sectors, a fever pitch over drug pricing, and M&A activities that exceeded expectations. Oh, and don’t forget we’re approaching a U.S. presidential election that will likely have dramatic impact on how we pay for and receive care.

Here are five themes FleishmanHillard will be watching (and already are seeing) during JPM:

  1. How will biotech and pharma stocks perform this week? Will the presentations and messages executives deliver publicly and behind closed doors quell the broader worries investors had at the end of 2015 that sent stocks tumbling? The year is already off to a fast start, with many companies announcing deals in just the past 24 hours. Some, like Adam Feuerstein, aren’t convinced, contending “the five-year party which saw biotech stocks outperform the broader markets comes to an end in 2016.”
  1. How optimistic are companies about new drug approvals in 2016? In 2015, FDA approved 45 new drugs, the largest one-year tally since 1996 and four more than in 2014. Perhaps more importantly, can they really demonstrate that the medicines have value to society that justifies their high prices?
  1. Speaking of pricing…will any company take a firm stand on pricing and back that up with action? Last year, Martin Shkreli, the now infamous CEO of Turing Pharmaceuticals, along with price increases from Valeant, created enough negative news with his pricing decisions that it spread to the entire industry, creating a dislike of pharmaceutical and biotech companies that’s as bad as we’ve ever seen. Meg Tirrell of CNBC has already asked multiple CEOs how they plan to address pricing, but to date the messages range wildly from “It’s not a problem” to general statements on the need to keep showing “value.”
  1. Is this the year of companies using genetic sequencing to predict diseases before they happen? It could be, when you have Bill Gates and Jeff Bezos partnering with Illumina to launch GRAIL. The goal is to develop a simple blood test that could detect any cancer early. It’s an interesting contrast to an announcement Juno Therapeutics made this morning, acquiring AbVitro for its ability to sequence single cells that could lead to new cancer treatments.
  1. President Obama delivers his final State of the Union address on Tuesday night. Will he make any mention of the myriad healthcare issues still facing the US? Or how about the Moonshot program announced today, and one that Vice President Biden supports? If he does, will it spill over into JPM, and what will companies – particularly drug makers and organizations delivering care – say?

Watch out for more business wrestling ahead. As they say in sports (and in business, too), let’s get ready to rumble!