(BioWorld Today Via Acquire Media NewsEdge) J.P. Morgan Preview

Despite the dismal state of the economy in 2008 and predictions that 2009 will be as bad if not worse, the biotech industry isn't expecting a doom-and-gloom atmosphere at the 27th annual J.P. Morgan Healthcare Conference, which kicks-off Monday.

Upward of 5,000 attendees are expected to turn out for the 337 scheduled company presentations as well as for the frenzy of one-on-one meetings with potential investors and partners that take place in every hotel suite, coffee shop, restaurant and hallway within a five-block radius of San Francisco's Westin St. Francis.

The J.P. Morgan conference is widely viewed as a barometer of biotech industry sentiment for the coming year.

In past years, the event has been "like a cocktail party, and the intoxicant is cash rather than alcohol - people are buzzed on the talk of deals," said Anadys Pharmaceuticals Inc.'s president and CEO, Steve Worland.

This year, Worland said he expects a more businesslike environment, although not doom and gloom.

Jack Florio, senior vice president with Brinson Patrick Securities Corp., agreed, predicting an emphasis on "better and more realistic plans" to make it through the next six to 18 months.

Michael Gaito, managing director and head of West Coast life sciences investment banking for J.P. Morgan Securities Inc., said the conference always generates "a great deal of optimism" as the first major event of the year, especially for investors starting over with blissfully clean fund performance slates. But this year, he expects a more "cautious optimism" as investors and companies watch the economy, the equity markets, the FDA under the new administration and strategic deal activity for signs of recovery in the biotech financing market.

More Partnering Activity Expected

Competition for a coveted presenting slot at the J.P. Morgan conference is always fierce, and Gaito said this year was no different. Companies seemed to think that if buy-side investors attend any conferences in 2009, this will be it - making it even "more critical" to snag a presentation slot, Gaito said.

For companies that aren't invited to present, opportunities have cropped up at a number of coinciding events like The Biotech Showcase, hosted by EBD Group and Demy-Colton Life Science Advisors. The showcase features presentations and one-on-one meeting opportunities for private biotechs, which make up a much smaller portion of the J.P. Morgan agenda.

But even companies with no presentation plans often trek to the J.P. Morgan conference to set up their own one-on-one meetings with the plethora of investors, bankers, analysts, venture capitalists and prospective partners in town for the event.

Bruce Steel, chief business officer of Anaphore Inc., said he has attended the conference for seven or eight years, although never with a company actually presenting.

"In a very short timeframe, you can have 20 or so in-person meetings with the top investors and biopharmaceutical companies in the industry," he explained, although he noted that the downside of the conference is that it's so busy, it can be hard to stand out from the crowd.

Some folks are predicting that the event may be somewhat less busy this year than in previous years.

An informal BioWorld survey of public and investor relations firms indicated that fewer biotechs may attend the conference this year, due to factors ranging from decreased travel budgets to the ever-increasing difficulty in getting an invite to the exclusive event. Some executives invited to attend in past years found themselves booted off the V.I.P. list this year, according to one investor relations expert.

Decreased budgets and industry consolidation also may affect the turnout of bankers and analysts from competing banks, which historically haven taken advantage of J.P. Morgan's draw by hosting their own one-on-one meetings in nearby hotel suites.

Investor attendance may be down as well, given the departure of generalist investors from the biotech space and the recent implosion of several hedge funds.

Another investor relations expert noted that it has been more difficult to interest buy-side investors in biotech meetings - even with companies that would have drawn interest in past years. A biotech may have a Phase III product, but investors want to know what regulatory hurdles the product may face and how the company will pay for a sales force without turning to the capital markets for at least 18 months.

Private companies may not have it any easier. Although most biotech venture capitalists don't have far to travel to the conference, Wende Hutton, general partner with Canaan Partners, predicted that the bar may be higher this year for one-on-one meetings.

But despite predictions of decreased attendance, companies still are managing to fill their dance cards with meetings, and the massive crowds at the Westin St. Francis will probably push fire code limits once again.

Florio noted that a lot of the value of the event is "opportunistic" - gained from networking in the hallways and at the various receptions.

The changing economic environment has presented new opportunities as well: Worland said Anadys has attracted new interest from venture capitalists looking for short-term data events in smaller-cap public companies, as well as continued interest from specialists in the hepatitis C space.

And even if investor meetings are harder to come by, partnering meetings are more than picking up the slack.

Gaito said the big pharmas are bringing the same number of business development folks they've brought to the conference in the past, "so we know they are open for business."

He added that big biotechs and big specialty pharmas also are attending the event in full force, filling their calendars with meetings with the many small-cap and private biotechs looking to out-license assets as a means of obtaining financing.

Hutton agreed that the conference will provide a platform for pharma to cull through a great deal of opportunity, but she said the real barometer to watch will be the progress of the partnering discussions three to four months from now. n

?

?

Copyright ? 2009 Thomson BioWorld, All Rights Reserved.

[ Back To TMCnet.com's Homepage ]

Discussions: