What Surprised Me — And Didn't — At J.P. Morgan 2016
By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL
Unfortunately, a minor mechanical issue involving one of my flights caused me to arrive a day late for the 34th Annual J.P. Morgan Healthcare Conference (JPM) in San Francisco (January 11-14). While missing Monday at one of biopharma’s biggest annual events (Twitter hashtag #JPM16) translates to a huge lost opportunity (i.e., not being able to attend 16 of 108 scheduled presentations/breakout sessions), when it comes to JPM, one day does not a conference make. Despite having one less day to work with, and splitting time between JPM, the 2016 Biotech Showcase (BTS), and the Redefining Early Stage Investments (RESI) conference, San Francisco + JPM in January always seems to provide for a few surprises.
For example, since JPM serves as a magnet for life science executives, there is always the possibility to cross paths with a high percentage of industry thought leaders at the event’s host hotel, the Westin St. Francis. In fact, on Tuesday I ran into Bruce Cozadd, CEO of Jazz Pharmaceuticals, who shared that JPM serves as a great barometer for assessing how a company is doing (i.e., presenting in a bigger room earlier in the week is good).
Given the confluence of peripheral events capitalizing on JPM’s draw, there is also the likelihood of seeing a well-known executive just walking down the street or, perhaps, giving CPR to someone in need. Yes, I was surprised to hear that, on Tuesday, January 11, Jonathan Bush, CEO and cofounder of aetnahealth, noticed a man lying on the sidewalk unresponsive, and administered CPR until paramedics arrived. “It was like the U.S. healthcare system,” he is quoted as saying. “Everybody was standing there, nobody was helping.”
During my trip I also was surprised to arrive at the conclusion that San Francisco and the biopharmaceutical industry are similar in an odd way — they are both struggling with their images. The city, once the epicenter of the counter-culture movement and known for its tolerance, seems to have lapsed into apathy and actually may be moving more toward intolerance (e.g., see the city’s growing homeless problem). Similarly, the biopharma industry needs to do more than just say that it’s patient-centric — today’s buzzword. Instead, it needs to develop a plan to address the public’s growing negative perception of the industry due to drug pricing and high-profile embarrassments like the Martin Shkreli debacle.
I was even surprised when, occasionally, a top executive would seemingly deviate from their well-rehearsed speech to … well quite frankly, talk more. For instance, I felt Lilly’s CEO John Lechleiter was going off script when he noted that “generics don’t come from the tooth fairy,” but from investments made by branded pharmaceutical companies.
Just What I Expected
In many ways, JPM was exactly what I expected. A multitude of men in cuff links and designer suits? Check. PowerPoint presentations that ranged from dry to insightful? Check. Pfizer, for a second year in a row, not participating in the JPM breakout Q&A session? Check. Actually, that last one was a bit surprising to me. I assumed last year the drug giant didn’t participate because it was embroiled in an attempted takeover of AstraZeneca. Perhaps the M&A talks with Allergan this year were the cause of their nonparticipation at this event. Still, I noticed Shire’s acquisition of Baxalta did not preclude its involvement in the breakout Q&A.
Speaking of breakout Q&As, I don’t think I’ve ever seen one as packed as Valeant’s this year. While there are a number of reasons for why it was so well attended (e.g., recent stock price plunge, hospitalization of the company CEO, interim-CEO taking the reins), I wonder if the political drug pricing “hot potato” that has come to rest at Valeant in the form of a federal investigation represents a prequel of what’s to come for the rest of biopharma. Namely, — price controls. Time will tell.
My Picks For Companies To Watch
After any JPM annual meeting it’s hard not to come away with a list of companies you want to keep your eye on. For me, those companies were Stryker, AbbVie, and BD (Becton Dickson). Stryker (NYSE: SYK) sees 3D printing and robotics as company growth engines and is focused on launching 3D printed implants, which may eliminate the need for orthobiologics in the future. If proven, CEO Kevin Lobo believes this could be a transformative development for the device industry. The buzz around AbbVie (NYSE: ABBV) seems to reside in how its Hep C franchise will fair with the coming branded competition from Merck, competition from biosimilar manufacturers, and Humira’s looming patent expiration. And finally, at BD (NYSE: BDX), the company is setting its sights on China as a huge growth market for its biopsy- and fusion-related products. In addition, BD is considering jettisoning its noncore respiratory business and is now emphasizing exciting new areas such as nanotechnologies and diagnostics.
In summary, for me it was difficult to encapsulate my thoughts from JPM this year. After all, there was a stock market dive, I had one less day than planned, and I was trying to capture some insights at two other highly valuable events (i.e., RESI and BTS) taking place at the same time as JPM. I actually feel dizzy from my reflection. Suffice it to say that JPM in San Fran in January is like Vegas — unless you go there, you simply can’t comprehend the enormity that this event has become for our industry.