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The Big Week for Investor Visibility, JP Morgan

  • Henry McCusker

There are 337 (276 public and 61 private) lifescience companies presenting starting Monday, 1/11 and running through Thursday, 1/14. Link: JPMHealthcareConference-Agenda1.7

Public company presentations are usually web-cast enabling non-participants to view presentations with breakout sessions immediately following their presentations. These web-casts will be available for 3 months after the conference: ; so click on the web-cast link (no need for a user name and password but will be prompted an email address). As related to current economic times, registration of attendees was limited by JP Morgan to a total of about 3,500 versus 6,000 in the past years.

Bottom Line: 2010 should be a good year for healthcare companies … despite a very difficult year for the US economy; but, biotech companies still managed to raise nearly $50 B in 2009, the 2nd highest year total in the industry’s history.

  • Many new technologies have been gestating and are now ready to hatch as IRBs and trial initiations and advancements are encouraging,
  • There are 328 publicly traded biotech’s at the end of 9/09 with an aggregate market cap of $352 B, 51 companies have market caps greater than $1 B, 36 companies have market caps between $500 and $999 million and 136 public biotech companies that have a market cap below $100 M (Burrill),
  • Pharma faces serious prospect of patents expiration and a declining number of new blockbusters over the next few years,
  • Biotech has as a history of hit-or-miss programs; but, many offer a risk reduction capacity for Pharma,
  • Yet, there were 147 pending NDAs under review since 2009, up from 86 in 2008; the highest number since 1995; let’s see how FY2010 stacks-up,
  • In 2010, pharmaceutical firms are more likely to ramp-up partnering with smaller biotech firms on drug development. Partnerships pay development firms millions up front with milestone and back-end payments and royalties; a worthwhile investment for sustainability and viability,
  • Pharma’s development isn’t about a lack of money, but a failure to exploit innovation as the R&D model is dramatically changing,
  • Financing and partnering deals collectively brought in over $13 B for US companies as of Q3/09, with over $4 B through financings and $9 B in partnering capital. This 147% increase in capital raised compared to the Q3/08 total clearly shows that the financial climate for biotechs is improving (Burrill),
  • Understand, the biotech industry is about to undergo a major transition based on Obama’s proposal for healthcare reform that could significantly impact the industry,
  • Despite current market uncertainties; I see momentum gaining in 2010,
  • My prognosis is biotech stocks who are truly addressing the innovation challenge will have an outstanding 2010,
  • The stem cell small-caps should appreciate as more trials evolve and will be the best place to make money in 2010 as pipeline demand is strong for biotech and their pipelines.